European businesses eyeing India’s green growth

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A burgeoning middle class and expanding green industries make India an attractive proposition for expanding European firms. However, understanding local business culture and laws is the difference between success and failure, Poul Jensen, director of the European Business and Technology Centre in India, told EURACTIV in an interview.

Even in challenging economic times, India has turned in impressive GDP growth of 6.5% – and some sectors promise even stronger returns for businesses brave enough to tackle the Indian market, says Jensen.

"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," he says.

Jensen heads up the EU-funded centre, operated by Eurochambres, which advises European businesses on how to navigate the early stages of expansion to India.

Its core focus is on biotechnology, energy, the environment and transport – all areas which will have a major effect on how the world's second most populous nation handles climate change. "These are four so-called 'sunrise sections' with unbelievable growth potential," says Jensen.

The EBTC provides market intelligence and cultural training, but can also offer SMEs a cheap way of setting up shop in large Indian cities.

"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," Jensen says.

He has also helped European companies to link up with Indian partners, although he stresses that business relationships do not always work the way Europeans expect.

"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," he says.

Cultural differences can be a barrier to business success – "we simply think different, we have different mindsets" – while the overburdened Indian legal system means many laws are effectively unenforceable.

Nonetheless, Jensen believes having a local partner can help European firms tap into a growing market. "The trick is to find the right partners – people who are pursuing a common agenda," he says.

To read the interview in full, please click here

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