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Business Abroad

India: Like Silicon Valley, but there are the cows Add to ...

Thanks to the magic of Skype, we have a double header of experts to offer advice on doing business in India.

From Canada is Doug Steiner, an entrepreneur and a consultant with Scotia Capital Inc. in Toronto. And from India is Mangal Shetty, owner of MarketsNext Inc., a consultancy and advisory firm in Bangalore, India, and one of Doug Steiner’s business partners.

Here are their thoughts on outside entrepreneurs arriving in India and trying to make a buck:

Why do business in India?

Mr. Steiner: At the beginning it’s a bit of a leap of faith, but what we found was the quality of people, technical competence, business acumen and legal structure that they have in India are very conducive to getting a business done properly – especially in Bangalore. There are many companies, such as IBM, Microsoft and Thomson Reuters, that have thousands of employees and large technical operations in Bangalore. Mangal Shetty and his company showed us a technical competence beyond anything we could find in Canada and they were able to produce technology for us at a fraction of the price [it would cost]at home.

Where can you find short term office space in Bangalore?

Mr. Shetty: Very often we have entrepreneurs from other countries coming to Bangalore in India who are trying to set up a business. There are many business centres that they can use which work out economically where you can rent facilities for a week, a few days or just use the conference rooms on demand per use.

What’s the etiquette for business lunches and dinners in India?

Mr. Steiner: It’s the same as here. It depends on who’s trying to sell who what. If you’re trying to get money from an Indian company, you’d be expected to pay. When we first met Mr. Mangal and his firm, I don’t think he had enough money to buy us lunch, so we went Dutch. The restaurants are as varied as you would find here. There’s French, Japanese ... a lot of Indian food ... and all kinds of quality.

Mr. Shetty: Typically, as hosts, we would like to pay and we normally do when we invite people. People speak English in most of the restaurants so there’s no issue there.

What about cost?

Mr. Shetty: If you go to the five stars you’ve got to pay the five star rates, which are as high, if not higher, than some of the five stars abroad. But you can also go to the lower end which has pretty good food. I remember taking Doug and his team to a place where we had a quality meal for $10 a head.

How’s the shopping?

Mr. Steiner: If you want to spend a lot of money they make beautiful Indian rugs. A lot of people with our firm took advantage of that and their new friends at Mr. Mangal’s company helped them with haggling. Part of the culture in India is that there are no price tags on anything. It’s much easier if you have an Indian partner to help you or to do the haggling for you.

What about negotiating business deals?

Mr. Steiner: Indians are very westernized, particularly in the technology industries. There are many places in Bangalore that, when you look out the window, you could be in Mississauga or Silicon Valley, except for cows in the parking lot – cows are wandering all over the place. But the business structure, acumen and delivery systems are almost identical; the way you negotiate is almost identical. There are issues with corruption, but those are things you have to handle at a local level and make sure you stay within the laws of our country when you’re dealing with people.

Mr. Shetty: When you deal with government, that’s when you start to get the stink of it, but with private enterprises I really don’t see corruption coming in.

If somebody asks you for a bribe, what’s the best way to handle it?

Mr. Mangal: Try not to be engaged in a cash bribe. Try to make it more subtle, take people out for dinners, maybe buy them something rather than pay them something.

Mr. Steiner: I’ve never been involved with any corruption or had payments be part of the business dealings I’ve done in India. I think there’s enough quality firms who want to do business globally that you can do business with. But Mr. Mangal’s right. I’ve met government officials who get paid almost nothing and drive around in [a]Mercedes. It’s a fact of life to get things done in India in the infrastructure – if you want to get a road built or if you want to get anything where the government will give you a license – that it’s very difficult to get anything done without paying somebody something or taking somebody out for a meal, because government employees are paid so little compared to their private counterparts. But typically, in a business to business relationship between a Canadian company and an Indian company, it’s just straight up. Quite honestly, I wouldn’t do business any other way.

Do you have any tips on building good business relationships?

Mr. Shetty: If Canadian entrepreneurs have the resources, it’s good to invest slightly disproportionately more in the beginning – maybe spend more time, come more often, if you want to build a long-term relationship. Indians like to see people more often in face-to-face meetings rather than on Skype. Engagement at an intellectual level goes well with Indian businesses.

Mr. Steiner: When we started our business relationship here we actually moved some engineers to Bangalore and they worked in Mr. Mangal’s business with him while they were doing business with us, so it wasn’t just a supplier/outsource relationship. We had people on the ground there.

What did you discover about India that you didn’t expect?

Mr. Steiner: How much I liked the country. People won’t go to India because they think it’s dirty and there are lots of people there. And it’s dirty and there are lots of people there. But the thing about the country is how nice the people are, how willing they are to help you and how spiritual the country is. I recently took my whole family with me, just so they could experience what I had in India. It’s more than a business experience.

What were the toughest challenges?

Mr. Steiner: The spiciness of the food and keeping up with the pace. I’d say this is generally true for all of Asia where there are these booming economies. Be prepared to work very hard while you’re there because these guys really want to succeed. It’s a true inspiration for an entrepreneur to see how tough these people are working.

What’s your advice to other entrepreneurs?

Mr. Steiner: This is not a crazy place; this is not another planet. Everything’s there. People have BlackBerrys, the telecommunications infrastructure is exactly the same as here. Don’t be afraid to go there and do some business.

Mr. Shetty: Don’t drink while eating spicy food. You won’t be able to handle it.

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