Local links vital to succeed in India

Along with China, India has received significant attention of late as an emerging global trade and commerce giant.

With its burgeoning middle class and major infrastructure developments, India is considered a key future business destination for Australia.

State opposition spokesman for Asian economic development, Simon O’Brien, who recently travelled to India to meet industry and government representatives, says India presents a host of opportunities for Western Australian businesses.

“India is a nation of small business and is very much open for business, but you need a local presence and systems in place to take advantage,” Mr O’Brien told WA Business News.

Mr O’Brien met with India’s minister for mines, Shri Sis Ram Ola, who outlined India’s particular interest in WA’s expertise in the mining industry.

“We are seen as a world leader in mining and India is keen to utilise WA’s mining information technology capabilities and engineering expertise, as well as our experience in land rehabilitation and land rights issues,” he said.

India is a significant miner of iron ore in its own right, and also has substantial untapped reserves of gas and iron ore, which provide its mining sector great scope for future expansion.

Clough Engineering is one WA company operating successfully in India. It has a $250 million contract to transport gas from offshore platforms to the Indian mainland.

India’s massive population makes land shortage a major issue, and for that reason it is interested in WA’s post-mining land rehabilitation techniques.

“India also sees similarities with Indigenous land ownership issues, as some Indian people have occupied potential mining areas for hundreds of years,” Mr O’Brien said.

“They are interested in our legislative approach to land ownership, and want to make sure that outcomes consider the interests of all parties involved.”

Apart from the demand for WA mining know-how, the large and expanding consumer class presents opportunities across all sectors of industry, including agriculture and education. 

“Western Australian apples are bulk imported to India and there is potential to substantially grow the WA bulk apple export market,” Mr O’Brien said.

In education, the Indian Merchants Chamber is keen to pursue opportunities to run WA-style TAFE trades courses in India, and Mr O’Brien believes Challenger TAFE, which has links with the sub-continent, is well placed to take advantage of this opportunity.

But establishing business ties in any foreign country, presents its own set of challenges.

India has an inherently protectionist system and also operates in a highly regulated business environment.

Considerable work has been done over the past decade to open up India for foreign investment but it remains a challenging place to do business.

The high level of regulation contributes to delays and cost pressures, and the protectionist culture can make it difficult for foreign investment to gain a toehold in the Indian market.

A local presence is also critical to business success in India, and with cost constraints an issue for small business looking to move into India, this is not an easy obstacle to overcome.