Doing business in India

Journal of Third World Studies, Fall 2000 by White, David L

Bullis, Douglas. Selling to India's Consumer Market. Westport, CT: Quorum Books, 1997. 289 pp.

Bullis, Bullis. Doing Business in Today's India. Westport, CT: Quorum Books, 1998. 320 pp.

The India of 1999 is far different from the India of 1989. Cities in India are boom towns with foreign businessmen paying more for hotel rooms than in New York while trying to capture a potential 375 million customers. Star TV and Channel V are watched more than MTV and TNT. Upscale magazines touting exotic vacations, designer clothing, and objects for a new group of India's super-rich abound. Newspapers are filled with stories about India's growing economic and military power, especially after the explosion of 5 nuclear devices in May 1998. Sometime in the next century, India's population will become the largest in the world, a phenomenon which makes businessmen all over the world salivate at the thought of all those consumers each buying just one pair of shoes. Contributing to India's attractiveness was her decision in 1991 to scrap the Nehruvian socialism she followed since independence in 1947 and open her markets to the world. Since then, India's economy has grown at an average rate of 5.8% each year, producing a middle class which numbers approximately 300 million. She has developed the third largest investor base in the world with the amount of private equity moving from $150 million in 1993 to $800 million in 1995! Apparently, even rural India is experiencing growth with the split between urban and rural purchases of packaged goods changing from 72-28% in 1984 to 45-55% in 1996. To help American businessmen who might want to participate in this growing Indian economy, Douglas Bullis has drawn upon his six years residence in the Indian subcontinent, personal interviews, and internet sources to produce two books addressed to the businessman interested in getting into the Indian market. The books assess four areas of concern. The first of these is an analysis of the Indian business climate today. While describing inflation and monetary policies, the manufacturing sector, the consumer market, advertising, and the legal system among many other topics (more about this later) in Chapter 2 of Doing Business, Bullis also assesses investment prospects from 1996 to the year 2000. He says here that while one can expects-6% growth per year for the next 5 years, mass poverty will persist and inflation will be difficult to control. Bullis believes that a poor regulatory framework is hindering infrastructure development to the point where increasing shortfalls in power and a deteriorating highway system are likely. Selling also describes the structure of India's consumer market in its five chapters by assessing areas such as, the probable pace of reforms, economic vested interests, Middle Class attitudes, demographics, the 1991-95 retail revolution, patent law, consumer credit, and distribution and sales.

Bullis also gives the interested reader a number of useful techniques that should help the western businessman who is unfamiliar with India and its customs and traditions to maintain good relations with his Indian business partners and employees and to understand the rules and regulations of investing in India. Three chapters of Doing Business are "Management Matters" where the reader is exposed to the psychology of the Indian male, face saving in typical management situations, and managing strikes, job hopping, and crime; "How to Invest in India," which explains India's export processing zones, the kinds of Indian companies, and the Indian tax system; and "Doing Daily Business" describes how to make contacts, create a protective paper trail, understand Indian last names, greetings and business etiquette and a myriad other topics. Selling doesn't directly describe useful techniques, but instead presents case studies on the color TV market, the electronics market, white goods (consumer durables), auto parts, designer coffee, and Suzuki motorcycles, among others, and then lets the reader-draw the appropriate conclusions.

The third area of concern addressed by the books is the continuing problems facing the Indian and non-Indian businessman today. Among these are the problems of poverty and lack of infrastructure development mentioned above. In addition, Bullis points to the nearing bankruptcy of many Indian state governments, continuing vested interests that will make total economic reform difficult, and the size and diversity of the Indian market. Fourthly, the books also contain a number of addresses, e-mail addresses, and web sites interspersed throughout the text and in appendices to both books.

While Doing Business and Selling both contain a wealth of information for the prospective investor in India, this information is not well organized. There is much here of interest to the businessman, but accessing this information is difficult. For instance, one of the chapters in Doing Business contains six major sub-headings, one of which is further broken into 16 smaller headings, some of which consist of a single paragraph. Two of the sub-headings appear to deal with the same kind of information as one is titled "Finance and Banking" while another is titled "Financial Sector Prospects." As a result, the general topic under consideration tends to get lost in all the sub-headings and specific information presented so that it is difficult for the reader to see any logical order or to understand the point being made. Indeed, there are points where the author fails to draw needed conclusions. At one point, Bullis claims that there are three major conditions that affect business operations in India. First he describes the psychology of the Indian male by claiming that the young male is made the center of the universe within the Indian family, but then is treated to a dose of reality leading to the male's withdrawal from the material world into the spiritual. But Bullis fails to connect this phenomenon (if true) with the business world. How does this tendency to withdraw effect commerce and industry in India? If this is true, why aren't there even more sanyasis in India? The second condition Bullis cites is the existence of four methods for obtaining/reaching a conclusion (reason, intuition, insight, and mysticism), but again Bullis gives no explanation or connection to Indian business. I might have missed something here, but I cannot find the third condition since the next subject is a discussion of contracts. (Is a contract a condition?)