It is very refreshing to see Indian missions overseas finally taking active steps to encourage Indian enterprises to explore new opportunities. I read the Vantage point piece that was published in India Business Law Journal last month and thought it was great. I do feel, however, that the author completely underplays Brazil as an investment destination. It is one of the biggest sugar producers in the world and by default one of the largest confectionery producers.
Having said that, there is no doubt that trade between many Latin American countries and India has risen. Panama, Curacao and Brazil have always been major players in the trading world.
The rest of Latin America now seems to be following suit and opening up their economies to the world. This is not only limited to big-ticket products but also FMCG goods.
Given their infallible spirit for doing business, many Indian companies will pull out all the stops to overcome difficult working conditions in order to flourish in a new market. But in most cases, it is not the challenges of geographical proximity, legal and regulatory labyrinths and competition that deter a business. Having experienced it first hand, it is the thornier issues of language, local work ethics, red tape and unwritten protocols to list a few, that can make or break business dealings in a new environment.
Embassies and other diplomatic missions can offer assistance in this regard. These institutions can play a more proactive role in guiding first-time entrants into new jurisdictions by setting up units to help their country nationals with more local, relevant knowledge, for example. Rather than handing over a general directory and local trade magazine (which are useless) to paid members of these missions, ambassadors and their colleagues should educate and assist new investors and traders on the nuances of doing business in a particular country.
On a more practical note, they could offer to find translators, set up meetings with local businesses and service providers, relay details about regulatory hazards, help with trade leads and share facts about import and export trade regulations and the existing socio-politico environment. In addition, a seal of trust from a local mission would greatly enhance the credibility and reliability of a new entrant in the market.
An in-house lawyer at an embassy who understands and appreciates the foreign direct investment framework, bureaucratic procedures, barriers to trade and the actual nitty gritty of setting up shop should share this information with new investors. I stress the word “actual” for the sole reason that there are discrepancies between what is prescribed by the government and how it is actually done. People don’t necessarily work by the book.
Mr R Viswanathan makes some very valid points in his article and has probably convinced many Indian entrepreneurs to look beyond the US, Europe and Africa as target markets. But the stark reality stands – it is not that easy! Missions and embassies could succeed in making this task a little easier if they were more people-centric. Admittedly, doing business successfully does not depend solely on adequate guidance, but also on the willingness of investors to step out of their comfort zones. First movers prepared to take the plunge will no doubt generate vast returns.
Global Energy Food Industries