Poul V. Jensen is director of the European Business and Technology Centre, India.
He was speaking to Gary Finnegan.
To read a shortened version of this interview, please click here.
What is the role of the European Business and Technology Centre (EBTC) in India?
The EBTC is an EU initiative which helps SMEs connect with local partners in India and overcome some of the challenges they face in expanding into Indian markets. The overarching impetus is to develop new technologies to tackle climate change, so we have a particular focus on biotechnology, energy, environment and transport. These are four so-called 'sunrise sections' with unbelievable growth potential.
How has India weathered the challenging economic climate?
Even in a time of global recession, India is still growing by between 6.5% and 7%. And, of course, some sectors have much higher growth than that. If you consider transport and energy, the growth is much higher because these are facilitators of growth.
We are helping companies overcome market access issues and are particularly focused on business and research. Our task is to connect European firms with partners in India. Ultimately, the EBTC – which has 16 consortium partners – will be self-sustainable.
We are also an intelligence hub, producing reports and providing information to companies in the areas where we have expertise. Trade facilitation is also part of what we do.
Is it more difficult for small and medium-sized enterprises (SMEs) to break into Indian markets?
SMEs who want to come to India need a degree of hand-holding and that's where we can help by providing office space, contacts and information on the market. That can help lower the cost of market entry – something that can be a barrier to SMEs expanding into India.
India is a huge, diverse market which is often viewed from the outside as somewhat mystically or exotic. It's easy to be blown away by the scale of it, and companies also find that the European mindset doesn't fit with the way business works in Indian cities. For one thing, you have to be there. Face-to-face meetings are very important, but coming to India, hiring people and renting an office can be risky. We want to make the first step easier for companies and research groups.
Do you work closely with national agencies and embassies from European countries?
We have close-knit ties to the member-state missions so there's no need to reinvent the wheel. Although we can also serve as a harbour for companies from smaller states who have very little presence in the Indian market.
How big is the cultural gulf between Europe and India?
There is a major cultural challenge to breaking into India. We simply think different – we have different mindsets and we were brought up differently. Even for things as simple as going to the bank to make lodgements, it can be surprising to Europeans to have people looking over their shoulder out of curiosity.
Many people have travelled to India and found it to be a fantastic destination for a holiday, but running a business is very different. Being the boss of a firm with predominantly Indian staff is different – it takes a lot more micromanagement. In my view, this is partly a result of India's education system relying on learning by rote. It can take several more steps to get something done. This difference can be overcome but you must be aware that you're no longer in your own culture.
Are there legal differences which make India unattractive?
There is a large grey area in Indian business culture. Europeans are, perhaps, more direct. We are also used to due diligence and corporate governance structures which can result in our companies being overtaken by other non-Indian companies for whom the cultural gap is not as big.
The legal system is British so it is recognisable in terms of its underlying principles and structure. In practice, however, court cases can take eight to 12 years because the system is overburdened. And, with cases so unlikely to be resolved quickly, business partners sometimes behave accordingly. The rules on IPR are okay but enforcement is patchy.
In your experience, is it generally easier to work with a local partner or does that come with its own risks?
It is generally advisable to have some kind of partner in India. But you need to find the right partners who are pursuing a common agenda.
India has great potential but are there bottlenecks to future expansion?
It is a country with massive growth – the middle class continues to grow. Of course, this also puts a strain on everything. There is just not enough energy; there are huge waste, water and air quality issues, and transport infrastructure is under pressure. People want their own cars but this is causing pollution and traffic congestion. And the challenge of feeding one billion people is immense. Right now, India can feed itself and export but demand is rising.
