Feature: Full of Indian promise

Sport Business News

From 'Hippie Trail' destination to 2010 Commonwealth Games host, decades of reforms have moved India gloriously high up the ranks of desirable locations in which to conduct business.

Rachael Church–Sanders, editorial director of MEI, takes a look at what is behind the boom and how overseas event suppliers can potentially source a piece of the action. In 2007, analysts at investment bank Goldman Sachs predicted that India would overtake Italy, France and the UK to become the world's fifth largest economy within 10 years if it kept up its then pace of expansion. By 2050, India's economy could be larger even than America's and second only to China, the bank bullishly predicted before the worldwide recession set in. Global gloom aside, India's economy is still growing by 5% per year, making it an extremely attractive proposition for the overseas business community. Furthermore, regulatory liberalisation has triggered the growth of a rapidly expanding middle class in India – currently numbering 400m and growing. Half of the middle class population is aged under 25 years–an attractive demographic for sponsors – and the whole country is technologically–savvy with internet cafes in particular experiencing a roaring trade. Growth in India's mobile phone sector, from a humble start in the mid–1990s, has really picked up pace in recent years, aided by higher subscriber volumes, lower tariffs and falling handset prices. Home to a clutch of global operators working with local companies, India had around 290m mobile subscribers by mid–2008. And that market is growing at an annual rate of over 50%. "Even the beggars have mobile phones, " confirmed Avtar Panesar, vice president of international operations at legendary Bollywood movie company Yash Raj Films (YRF), one of India's success stories. YRF was set up by Indian film mogul Yash Chopra in 1970, who, by then, already had 20 years of film–making under his belt. Since its inception, YRF has made over 40 movies including Bollywood's longest–running film–'Dilwale Dulhania Le Jayenge' (loosely translated as 'The Brave Heart will Take the Bride')–which has been showing regularly to packed–out audiences for over 14 years. A distributor of Indian movies produced by other companies as well as its own, YRF also has its own iTunes–friendly music label–YRF Music – and proprietary in–house post–production facilities. It also has internal divisions for television, design cell, equipment, marketing, internet and new media, licensing and merchandising. In 2004, US–based movie business magazine the Hollywood Reporter placed YRF at number 27 in a survey of 'Biggest Film Distribution Houses' in the world, declaring it to be India's biggest movie production company. Bollywood success storySo, why has India been so successful in the movie industry? Panesar took up the story: "Apart from great locations, one of the things India offers is fantastic, hard–working crews at a fraction of the cost in other countries. People in the country are very friendly, receptive and can communicate well. Even the rickshaw drivers can speak English. India is certainly not referred to as a third world country anymore. "The success of Bollywood – the informal term popularly used for the Mumbai–based Hindi language film industry in India, which is only a fraction of the successful India movie industry as a whole–has certainly raised the profile of the country globally. Bollywood movies have a feelgood factor loved by audiences throughout the world. Panesar outlined the essential ingredients for a Bollywood hit: "Human stories, thousands of people falling in love, big casts, glitzy, glamorous outfits, lavish houses. Basically, Bollywood is about Indian soul packaged in a Western style. "Indian audiences according to Panesar however have become more receptive to other genres of film over the past few years. "Ten years ago, they only wanted to watch three hour films in which there had to be a good guy. Now there can be an anti–hero, or even a film not following the traditional ingredients I outlined earlier. " A decade ago, Indian audiences would not have considered watching a film such as 'Slumdog Millionaire', the 2008 British movie directed by Danny Boyle, whereas now, not only would they go and see it, "but they would embrace the recognition for the country", said Panesar. Set and filmed in India, 'Slumdog Millionaire' tells the story of a young man from the slums of Mumbai who appears on the Indian version of popular gameshow 'Who Wants to Be a Millionaire? ' and exceeds people's expectations, arousing the suspicions of the game show host and of law enforcement officials. "I'm a firm believer that if a film such as this does well, then it does well for the whole of India, " added Panesar. That sentiment was echoed by Mike Hooper, chief executive of the Commonwealth Games Federation. "What has 'Slumdog Millionaire' done for India? The film itself has been very well–received in India. Many countries in the world have similar levels of poverty, so it's not just India. The film industry is on a high over here. India is vibrant and diverse and the movie business typifies that. "Sports–mad populationHappily for Hooper, India is not only a country that is movies–mad, but sports–mad too. He has divided his time between Delhi and London since October 2007 (overseeing the successful 2009 Pune Youth Commonwealth Games and the build up to the 2010 New Delhi Commonwealth Games), and has already witnessed positive change in the country. He explained: "We are already seeing the benefits of Delhi being awarded the Games back in 2003. There have been massive developments in all areas of infrastructure–from the airport through to roads, water supplies and the competition venues. Like the Olympic Games, the Commonwealth Games can act as a catalyst for change–and this time the beneficiaries are India and Delhi. "Hooper's commute time between the airport and his accommodation has halved since he first started living in Delhi. "I have witnessed the changing face of Delhi and the opportunities created for locals. The impact of the Commonwealth Games will last for many years to come. Not only are the Games creating a bricks and mortar legacy but they are promoting India. There is negativity at the moment due to the recent terrorist attacks, but as the Games get nearer, that will start to change. "The Youth Commonwealth Games event held in Pune in 2009 was very positive for India. "Until then, the country had been bereft of any high quality sporting infrastructure, " said Hooper. "Pune now has the long term means to host other sports events. The same will happen with Delhi. Everyone knows that India aspires to host an Olympic Games in the future. The 2010 Commonwealth Games will therefore act as a great measure of that potential. "As has been the case for other major sports event host countries globally, India has experienced its fair share of trade missions sourcing opportunities around the 2010 event. Hooper has experienced a lot of trade missions from the UK, US, Australia and New Zealand in particular and thinks these trips will not have been wasted ones. "When it comes to suppliers for events, it is a case of India first, which is how it should be. If India can, it will. Clearly, as has been evident from some areas though, there have been opportunities for overseas companies to get involved. The organising committee does not prohibit anyone from coming forward with proposals, and as the event gets nearer, there will be a lot more contracts up for grabs and therefore requests for proposals. "Keys for successDoes Hooper consider there to be any keys to success doing business in India? "Definitely having the right contacts is important. People pretend they do have the right contacts, but often don't, so my advice is to research potential partners carefully. That said, India is a fantastic place to do business. English is one of the official languages and one of the legacies from British rule has been the excellent system of government. "Equally bullish about business prospects for overseas companies in India was Anuj Chande, corporate finance partner and head of the London–based South Asia Group at accountancy and consulting firm Grant Thornton who advises UK companies looking to source business opportunities in India and vice versa. Chande has twice been recognised as one of the UK's 100 most influential Asians for the Asian Power 100 list which is compiled annually by Carter Andersen in association with the Bank of Scotland. "There are staggering opportunities in India, " he said. "India is still relatively under–developed, meaning there is room for growth. There are terrific market opportunities just in terms of the sheer size of the young, upwardly mobile middle class population. "Historically, India was initially popular with overseas companies due to offshore opportunities, Chande explained. "A lot of back office functions were initially transferred to India where costs were lower, and those opportunities do still exist. " More recently however, Grant Thornton has been advising UK–based companies on setting up complete operations in the country or supplying services to Indian industries such as construction, architecture and digital media. Whilst many large overseas companies have already targeted India, Chande has been disappointed that more medium–sized UK companies have not seized the mettle. "There is money in India and the business community is receptive to working with overseas companies but the challenge is finding out how to do business effectively, " he cautioned. Chande recommended finding an advisor with experience of working in India to take overseas companies through the regulatory and bureaucratic nuances of the country's legal system. "The legal system is a lot more open now than when Grant Thornton first entered the market in 1991 and shares many features with the UK system, however there are other issues such as tax–related ones that need careful consideration. "Chande recommended treading the joint venture path or forming alliances with local companies in India as a first step into the market. "Business is very much relationship–focused in India and it can take a long time to build that trust with a local partner. Patience is therefore key in building these relationships, but once the trust is there, then it is there for a long period. "Finally, companies wishing to undertake business in India should not underestimate the impact of religion and family values, warned Chande. "Overseas business people may find that their contract with an Indian company is not signed on a certain day, because it is a religious festival. They need to be sensitive to cultural considerations. " And that is not all. "A lot of business is undertaken in the country through word of mouth rather than written contracts anyway, " added Chande. "When you shake hands, the deal is done. "

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