Unlocking Opportunities in India: Why Where You Start Matters
The New Zealand–India Free Trade Agreement creates an exciting opportunity to deepen the relationship between New Zealand and India and to foster new partnerships between businesses, investors and communities in both countries. As more New Zealand organisations begin exploring the opportunities this creates, one lesson from our own experience may be useful.
Yesterday I had the privilege of presenting at a New Zealand–India business networking event hosted by the Consulate General of India in Auckland and the Wiri Business Association. The conversations throughout the morning reflected both the enthusiasm for the opportunities ahead and the genuine desire to build enduring relationships with India.
Since establishing operations in India in 2014, we've learned a great deal—but we've also learned just how much there is still to learn. One lesson, however, has consistently shaped the way we think about building partnerships and establishing a presence in India.
Success in India doesn't begin with choosing India. It begins with choosing where in India to start.
After more than a decade of working across India, one of the biggest lessons we've learned is that it is a mistake to think of India as a single market.
It isn't.
India is one nation, but commercially it is many markets.
Like the European Union, India comprises large and diverse regional economies. It has 28 states and 8 union territories, 22 official languages, and hundreds of regional languages and dialects. Each state has its own business culture, industrial strengths, workforce, infrastructure and commercial opportunities.
Tamil Nadu has developed one of the world's great engineering and manufacturing ecosystems.
Karnataka is recognised globally for technology and innovation.
Gujarat has become a major industrial and export powerhouse.
Maharashtra is India's financial and commercial centre.
Uttar Pradesh alone has a population of around 240 million people—larger than almost every country on earth.
Tamil Nadu has around 80 million people, similar in size to Germany.
These are not simply administrative regions.
They are substantial economies in their own right.
This is why I encourage businesses to stop asking:
"How do we enter India?"
Instead ask:
"Which part of India is right for our business?"
However, even that isn't the first question.
Before choosing a city, a state, or a distributor, a business should first have complete clarity about its own Unique Value Proposition.
What problem do you solve?
Why would a customer choose you?
What makes you different?
What value do you create?
Only once that is understood can you begin evaluating where your proposition is most likely to succeed.
At that point, strategic frameworks become extremely valuable.
Porter's Five Forces helps determine whether your value proposition can compete successfully by assessing the competitive landscape.
PESTLE analysis then helps compare different regions by considering political, economic, social, technological, legal and environmental factors.
Rather than analysing India as a single market, these frameworks allow businesses to compare individual states and identify where they have the greatest probability of success.
When Malabou established operations in India in 2014, we chose Coimbatore in Tamil Nadu.
That wasn't because it was the best city in India.
It was because it was the best location for our business.
We already had trusted relationships in South India, but equally important was the region itself. Coimbatore offered a world-class engineering and manufacturing ecosystem, deep expertise in metal casting and precision machining, excellent logistics through three major seaports, and a highly educated engineering workforce with strong English proficiency.
Another business may have reached a completely different conclusion.
And that is precisely the point.
There is no single "best" place to establish a presence in India.
There is only the place that is best aligned with your business strategy.
Equally important is recognising that successful business in India is built on relationships as much as transactions. Finding the right region helps you find the right people, and over time those relationships become one of your greatest competitive advantages.
In our experience, trust is not something that develops after business begins—it is often the foundation upon which successful business is built.
Over the coming months I'll be sharing practical insights from more than a decade of working in India, exploring topics such as regional market selection, manufacturing ecosystems, supply chains, partner identification, cultural considerations and strategic decision-making.
While many of these articles will use India as the example, the underlying principles apply equally to any organisation considering international growth.
Good international expansion is not driven by ambition alone.
It is driven by informed decisions, trusted relationships and a genuine commitment to understanding the markets in which we choose to work.
India offers extraordinary opportunities.
Understanding its diversity—and investing in relationships—is one of the keys to unlocking those opportunities.
Don't ask how to enter India.
Ask where in India you should start.
Learn more at www.malabou.com.au