My India 5 “Catch that train”
When I look around me in the Amsterdam subway, I see that my age is “a bit” above that of the other passengers in the train. But when in “Connaught Place” subway station of New Delhi the doors of the train sway open and the masses poor out, it really looks like it’s school closing time.
The average age in India will be around 29 years in 2020 and up to 2025 another 300 million Indians will be born. In order to add sufficient jobs in the near future, India’s economy should show a growth of around nine percent. That was the case till 2008. But to attract the necessary volumes of investment needed for robust growth, further reforms are crucial, as is the recovery of the global economic situation. Because India wants to continue to count on its partners.
The Netherlands is an important economic partner of India. In the twelve
months up to April 2013 the Netherlands received 20% of all Indian exports to
Europe. The Dutch do not themselves consume all of these goods. We re-export a
large part to our neighbours. For the Netherlands these figures confirm that
Indians - like us by the way- really regard the Netherlands as the “Gateway to
Europe”. And that is good news for our ports and airports. For India it means
that we deliver what India needs most: foreign exchange.
But there is more: Indian companies not only consider the Netherlands as a good centre for their European distribution network, but also as a perfect country to establish a European branch. Sometimes this is achieved by take-overs (Dutch Steel, Vredestein Tyres), sometimes by greenfield establishments. India has already become the fifth largest source of Foreign Direct Investment (FDI) in the Netherlands.
And here we have perfect reciprocity: because vice versa the Netherlands is the fifth largest FDI source for India. It means for India again that we deliver what it needs most: foreign exchange and investments.
But Indians see another added value: recently the Netherlands ranked fourth on the list of the world’s most innovative economies. The coming years India will have to solve problems on a scale unseen in history. The country is eager to attract innovative solutions, experience, know how. Netherlands’ large corporations are active in India in R&D: most Dutch multinationals have R&D centres with in some cases as much as 1500 researchers.
But the knowledge and experience in the Netherlands are often to be found in
Small and Medium Sized companies. The problem is how to get them interested.
Doing business is quite different in India. When, recently, at the occasion of
the ten years anniversary of Eperium Business Solutions India, I had said in my
speech that all business in India starts from personal relations. The Dutch
co-founder of the company approached me afterwards and said: ”that’s hundred
percent correct; and more than that: it was at the wedding of my Indian partner
that we decided to put up a branch in India to outsource part of our work.”
He confirmed that it hadn’t been easy all the time, but that their activities in India had now become crucial for the sustainability of the company, that once they were producing in India they had discovered Indian market opportunities and eventually even had used their Indian activities as a platform to expand to other continents.
So successfully doing business in India is not a matter of “I export to you
or you to me”. Nor is it a question of one-way traffic of experience,
entrepreneurship or know how. And not necessarily: ”I outsource to you”. In some
cases Dutch corporations first outsourced routine activities to India and then,
gradually, even part of their critical business processes. Their relation to the
Indian company thus evolved from outsourcing- to a strategic partnership,
crucial for the survival of the company.
And also here, in outsourcing, the effect on the Indian and the Netherlands economy is mutual, because Indian companies as Tata Consultancy services, Tech Mahindra and Mindtree have in the meantime set up businesses in the Netherlands.
So now it’s up to Dutch SME to catch that train.