India - Market Entry Strategy India - Market Entry Strategy
Strategic planning, due diligence, consistent follow-up, and, perhaps most important, patience and commitment are prerequisites for successful businesses in India. This market necessitates efforts that address differing regional opportunities, standards, languages, cultural differences, and levels of economic development. Gaining access to India's markets requires careful analysis of consumer preferences, existing sales channels, and changes in distribution and marketing practices, all of which are continually evolving.
Finding Partners and Agents
New-to-market companies must address issues of sales channels, distribution and marketing practices, pricing and labeling, and protection of intellectual property. These issues can often be effectively addressed through an Indian partner or agent. Relationships and personal meetings with potential agents are extremely important. Due diligence is strongly recommended to ensure that partners are credible and reliable.
Market Entry Considerations
There are many foreign companies eyeing opportunities in India. For entry into the Indian market, it is essential to identify the target market and find good partners who know the local market well and are completely acquainted with procedural issues. Foreign investors should also explore various market options in India that could include forming subsidiary relationships or joint ventures with an India-based company.
Some of the important points for market entry in India are: understanding the diverse market and strategies toward specific regions and income groups (i.e., target segments); crafting offerings according to the target group in order to gain early acceptance; considering the large informal sector in your planning; approaching the market consistently; obtaining mandatory licenses and approvals; and understanding that import procedures are one of the key issues for first-time exports to India. Proper documentation and understanding of the Indian import procedures will help to ensure smooth entry of products into the Indian market.
Geographic Diversity
As stated, U.S. companies, particularly small and medium-sized enterprises, should consider approaching India’s markets on a regional level. Good localized information is a key to success in such a large and diverse country. The U.S. Commercial Service offices in New Delhi, Mumbai, Chennai, Ahmedabad, Bengaluru, Hyderabad, and Kolkata provide valuable local information and advice, and are well connected with local business and economic leaders. Multiple agents are often required to serve the various geographic markets in the country.
Border Countries
India shares borders to the northwest with Pakistan, to the north with China, Nepal, and Bhutan, and to the east with Bangladesh and Myanmar. To the west lies the Arabian Sea, to the east the Bay of Bengal, and to the south the Indian Ocean. Sri Lanka lies off the southeastern coast, and the Maldives off the southwestern coast.
Indo-Pacific Vision
The U.S. Government has indicated its intention to increase engagement in the fast-growing Asian region and has called for an all-of-government approach. This Indo-Pacific Strategy includes The Digital Connectivity and Cybersecurity Partnership (DCCP), Asia Enhancing Development and Growth through Energy (Asia EDGE), and the Infrastructure Transaction and Assistance Network (ITAN). In addition, the Department of Commerce has initiated the Access Asia strategic outreach program. It was developed to address the U.S. Government’s trade deficit priority. Launched in March 2018, the program hosted 25 outreach events in cities across the United States. Access Asia’s data-driven initiative connects U.S. companies to sector specific, actionable opportunities in key Asian markets. In May 2019, a second part of this program was launched called Access Asia 2.0 for events in Asia to introduce U.S. exporters to specific Asian markets.