The opportunities are well recognized and the current state of government to government relations has never been better. Following the momentum gained through the “Year of India in Canada last year”, Canada is clearly poised to much more business with India. Crucial to Canada’s success will be ramping up the presence of Canadian firms in India.
The 5th annual India Forum at the Telfer School of Management held on March 8, 2012 was dedicated to addressing the opportunities and challenges in establishing a presence in India. The Forum was well attended by over 100 representatives of the business, government and academic communities who also gained insight into the current investment climate in India and the significant developments occurring in the Indo-Canadian trade and investment corridor. This year’s India Forum was held in collaboration with the Indo Canadian Ottawa Business Chamber (ICOBC) and the Ministry of Economic Development and Innovation (MEDI) of Ontario and featured six sponsors and two marketing partners.
Among the highlights of the event were presentations and discussions with Mrs. Narinder Chauhan, Indian Deputy High Commissioner, Peter Hall, Export Development Canada’s Chief Economist, Don Stephenson, Canada’s Chief Negotiator for the proposed Canada – India Comprehensive Economic Partnership Agreement, and Rana Sarkar, the President of the Canada India Business Council.
The Forum served to underscore that establishing an ongoing presence in the Indian market requires a significant commitment from Canadian firms. This commitment also needs to be undertaken through careful analysis and calibration to ensure the right decisions are made on a variety of issues both before and after making the initial investment.
Canadian executives at this year’s event were able to gain insight into many aspects of the challenges and rewards of establishing a presence in India. Topics addressed included the various modes of entry into the market, cultural factors to be mindful of in setting up in the market and the risks inherent in establishing a presence and how to how to mitigate them. The panels and workshops involved seasoned experts including senior executives from firms such as Toon Boom and Dragonwave who have successfully navigated the challenges in setting up in the market as well representatives from marketing, legal, tax and insurance intermediary organizations.
On the investment side, there are a plethora of opportunities for Canada in such sectors as ICT/Telecom, Infrastructure and Automotive to name a few. As the economy continues its shift towards services, Canadian firms need to establish a footing in the market to take advantage of the growth and effectively compete for new and evolving opportunities. As noted at the Forum, overall foreign direct Investment in India as a percentage of GDP is now at a similar level to that in China. Clearly, Canadian companies need to pick up the pace and engage with increased commitment to be positioned to succeed.
During this year’s panel and roundtable discussions, participants discussed and debated issues such as how to establish effective relationships in India, deal with the level and reliability of infrastructure, choose the right location within the diverse Indian market and the financing options available to Canadian firms and their Indian subsidiaries in the market.
Panelists’ also discussed how to position their firms in the Indian market and the advantages of profiling their firm as a Canadian or an Indian firm or a combination of both in the market. Tax and legal issues related to establishing a presence were also addressed with a reference to the advantages and disadvantages of the various options in terms of modes of entry. Cultural factors also featured prominently in the discussions and the importance of Canadian executives taking the steps to study and be sensitive to Indian cultural characteristics including the spirituality of Indians, the time needed to develop relationships and trust and the pride of Indians. The discussions also addressed ways in which to mitigate some of the risks in dealing in the market including those related to credit, infrastructure and intellectual property. Government and private sector organizations that can play a supporting role in dealing with these issues were also highlighted at the event. In fact, the need to draw on a network of advisors and partners was considered paramount in order to gain market intelligence, plan an investment strategy and negotiate and implement contracts.
During the Forum the background to the Comprehensive Economic Partnership Agreement (CEPA) negotiations was also presented. The CEPA negotiations which were launched in November 2010 were supported by a joint study that concluded that free trade with India could boost Canada’s economy by $6 to $15 billion, increase bilateral trade with India by 50 % and directly benefit a wide range of Canadian sectors. During the discussions, it was indeed noteworthy to hear that that the proposed agreement is being given very high priority by the Canadian government. Further, the two sides have already engaged in four rounds of discussions with another session planned for April of this year. Canada has publicly indicated that it is seeking to conclude the CEPA in 2013.
With the encouraging prospects for closer ties, the reality for Canadian firms who are turning their attention to India is that they have to work harder and smarter given the intense competition from international and local firms. Canadian executives need an increased commitment to the market, a more flexible agenda, an orientation to building long lasting relationships and trust. They also need to be better informed and to fully appreciate that an ongoing presence in the market is crucial. As well, they need to be well prepared for tough negotiation in the face of sometimes aggressive moves by their Indian counterparts and competitors.
The Telfer School remains committed to supporting Canadian firms in this strategic market and to help as they take up the challenge of establishing a presence in the dynamic market. In addition to its ongoing recruitment program in India, Telfer is taking various steps to position itself and Canadian executives for the Indian market. As outlined by Francois Julien, the Dean of the Telfer School of Management, these steps include building “India content” into its courses such as a new undergraduate course on doing business in India, participating on the Board of the Canada – India Business Council , launching an executive online “doing business in India” program, convening the ongoing Telfer India Forum and developing important relationships with counterpart management institutes in India. All of these initiatives are designed to position the Telfer School and Canadian firms for enhanced collaboration with India in the future.
Marvin Hough is an Executive in Residence at the Telfer School of Management and a Canada-India Business Council Director. He spent four years in India as a Canadian Trade Commissioner and many years at EDC working on the India market. He leads arrangements for the annual India Forum, teaches an undergraduate course on doing business in India and has developed the Telfer Focus India executive training program (www.telfer.uOttawa.ca/executiveprograms).
Photo (left to right): Pradeep Merchant, Mrs. Narinder Chauhan and Marvin Hough.