What are they thinking?
I've long maintained that ultimately India would surpass China in the titanic struggle between the two most populous "emerging" economies. It won't be proved (or disproved) for many years, but my contention is based primarily on the fact that India's evolution will be driven by market forces as opposed to command planning in China. Admittedly, based on medium term results the Chinese model seems to offer more potential for success.
It's fascinating to watch - and if you have business investment or aspirations in India, also incredibly frustrating. Indeed the very attribute which may in the long-term propel India into the clear lead, serves in the short-term to hamstring may of their advances.
But if you have international business interests, observing the dynamic to inform your international risk management is obligatory.
Two steps forward...how many back?
Lately watching India's messy process in action one has to wonder...what are they thinking. Entice Wal-Mart, Carrefour and others...and just as they are ready to invest, SLAM the door on them and crack it back open almost simultaneously. And then the really confounding proposal, quietly tucked into the proposed budget, which would tax multinational retroactively to 1962.
And these are overlayed on the environment of endemic corruption and a crippling bureaucracy which is legend. No wonder GE CEO Jeff Immelt has expressed frustration with the "slow pace of decision-making in India." International risk management has a way of inducing frustration....
An interesting show...but why does it matter?
Selecting target markets for your export and international business development requires lots of research, cerebral analysis, and then some best guesses. (Part of the reason that a Lean Start-Up iterative approach makes sense!)
But if a company enters India, understanding that cultural and bureaucratic challenges will likely mean a 5 year window to any return on their market entry investment, what affect will such an unpredictable political risk environment necessarily have on their decision? Is India worth it? Are the BRICs worth it? Have the CIVETS become merely an acronym and not a viable expansion road map?
There's no simple answer of course. A nuanced strategic analsysis is critical; and experienced advisory is central to that international risk management analsysis. And then execution must be carefully managed. That's what Consilium Global Business Advisors offers companies. Expert experienced advisory and on-the-ground execution assistance.
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