Entering the market finally

Entering the Indian market finally

After studying the potential of the Indian market and determining an entry strategy, the final stages of actually setting up a base in India will include:

Partner Search

If setting up a joint venture or developing an agency/franchise relationship, it will be necessary to:

Find a partner who meets your objectives

Find a partner with the requisite skills

Perform a credit check of the proposed partner

Negotiate the details of the contract

Arrive at a Memorandum of Understanding (MOU)

Finalize the joint venture/agency/franchise agreement

Government Sanctions

Before actually setting up operations, various central and state governmental approvals must be obtained. The approval granting authorities in the Central Government are:

The Reserve Bank of India (RBI).
Foreign Investment Promotion Board (FIPB).

Registration Once the project has been approved, it has to be registered with the Registrar of Companies (ROC). If forming a joint venture or subsidiary, the company must be incorporated and obtain a certificate to commence business. If setting up an office, registration is required with the appropriate regional ROC.

Other Approvals

Once the entry plan has been cleared by the Central Government and registered appropriately, actually setting up will require various State clearances, viz. building planning, land use, environmental clearance, power clearance, etc.

Conclusion

Many overseas companies -- large and small -- have made successful entries into the market since India began its liberalization process in 1991. Yet, some have also attempted and failed. There is no doubt that the potential is vast. India's total market is 950 million and the middle class is huge and growing. Both the central and state governments are aggressively seeking foreign investment -- adding incentive on incentive to encourage overseas companies to set up shop. On the surface in fact, India looks like an investment dream come true. But, in reality, the challenges are equally vast. Those that will succeed in tapping this great nation's potential will do so through careful research and a well-designed plan.