Indian Inferno

PIONEER: When Trond Skundberg opened the first offshore development centre in India in 1999, it was TV-news. Today foreign investments in India are much less sensational. Mr. Skundberg outside Victoria Terminus, Mumbai’s equivalent to Oslo Sentral Station.

Norwegian opposes expatriation in India, but now that the Indian giant has left China behind when it comes to growth rate – Norwegian businesses cannot close the eyes anymore.

MUMBAI, INDIA: This is an article written by/all photos by Andreas Klemsdal. Published in Finansavisen, a major Financial Daily in Norway, 18th April 2015. Translated to English by Trond Skundberg (I wonder why)

It swallows you if you approach it. It is dirty, noisy and chaotic. Deterrent and charming at the same time. The city of Mumbai has 4 times Norway’s population and is an inferno of sounds, fragrances and light. On my hotel TV a news bulletin from CNN states that India is todays fastest growing major economy. As if that should give the city more peace of mind.

In Mahatma Gandhi Road the tiny black and yellow taxies are honking from dusk to dawn. India is an organized chaos. Little crime and a strong GNP growth rate, but still a looser on the list of business friendly countries. India is number 91 on Forbes list of countries “best for business”. That is something Prime Minister Narendra Modi want to change and he has launched “Make in India”, one of the world’s largest PR-campaigns at the moment. As the Economist recently wrote; Emerging markets aren’t as they used to. China is losing speed, Brasil stagnating, Russia in recession and South-Africa devastated by infectivity and corruption. The big hope is India.

One of the challenges is assuring India’s millions of family run companies are adopting to the new economy. Few has managed to do as Harsh C. Mariwala. He confronted the family and modernized the edible oil family business already in the eighties.

– At that time an unthinkable thing to do, but the only right thing to do says Mariwala. Today his company Marico is valued at 4 billion USD.

Norwegian companies is starting to realize the train is about to leave the station.

The conference Norway-Asia Business Summit started in Delhi yesterday, with a considerable number of Norwegian business executives participating.

We meet Trond Skundberg a few days earlier, strolling through Victoria Terminus train station -one head above the swarm of Indians trying to catch a train home.

When Skundberg co-founded the first small Indo-Norwegian software development company in 1999, he was featured on national TV. Today no one even raise their eyebrows of a foreign startup in India.

-When we entered India it was a sensation. The development since that has been unbelievable, says Trond Skundberg, an independent adviser specializing in building bridges between Norwegian and Indian enterprises.

Anders H. Lier also has a big heart for India. He is the newly appointed CEO in Enoro and Chairman in Innovation Forum Norway. This week he is in India with more than 20 IFN and NICCI members studying innovation in the world’s most important emerging market.

mumbai-anders-lier
Out hunting. Anders Lier has a big heart for India, Now he also want to win contracts in India, as the new President and CEO for Enoro.

-The purchasing power in India is exploding now, with a middle class of around 300 million people. They need the kind of services and products that Norway can offer. The development India is about to go through, we have already put behind us in Norway. It is a demand for our expertise. The company he is heading is a good example. Enoro offer software solutions for energy companies.

-India is a market we have decided to enter. We are competing for our first projects right now. Lier is pointing out that it is not necessarily possible to implement a Norwegian business model in India.

-Companies establishing business in India has to think very different when it comes to the cost side. India is an extremely cost sensitive market. The ones succeeding in that will open up for an ocean of new possibilities in an emerging market, Lier says.

No shortage of minefields. Trond Skundberg tell us that India has declared war towards bureaucracy. Though the anti-corruption work is up for a slower start, things are moving.

-Outsourcing to India, or establishing a business in India, is a demanding exercise. Though the availability of highly educated consultants is high, our experience show that many lack basic experience and the personal initiative we are used to and expect. Hence, finding the real enthusiasts in this enormous pool -is make or break. To pick whom to work with is like Russian roulette, or Indian roulette. The chance of failure is high. You are crazy if you do it alone, is Skundberg’s opinion.

He emphasizes that Indians has a different compass then Norwegians. As good as everyone has a strong religious roadmap. You cannot visit India for 4 days and think you understand India. Many do not realize how important personal relations are in India; it is almost above the law.

The Norwegian India expert is soon out with a book on the subject. Together with an Indian cartoonist, he is soon launching the book «Help – I am going to India on business.» Taking the humoristic approach, the book make some fun of both habits and peculiarities, but not of religion. Skundberg has no intention on creating another caricature controversy.

Skundberg is baord member in Norway India Chamber
Of Commerce and Industry, that in June will organize a Norway-India seminar on ICT in health, in cooperation with IKT-Norway (the interest group for the Norwegian ICT industry).

-An Indian never forget a favor. That is important to remember, says George Mathew, Consul General for Norway in Mumbai for decades.

He is telling that the Noregian business history in India started when Sverre Gylseth established Norinco in 1942. Later, activity was started for Borregaards paper and Norsk Hydros fertilizers. In the seventies the first Offshore vessels was built in India. Norwegian success in India is achieved by Kongsberg DP Systems, Simrad, Teamtec og Oceanor. But, it has also been several failures, Mathew admits.

-Quite some large Norwegian companies has activity in India, but in general we see a lack of interest with the top management. Furthermore many Norwegian entreprises has had bad timing. Among them Telenor. –Telenor entered India 10 years too late, Mathew claim.

 

mumbai-vidji-harsh-mariwala
2. Cross border assistance. Thanabal Vijayaindra has worked for Telenor, Norsk Hydro and Yara. Now he want to open doors for Norwegian businesses in India. 3. The master of innovation Harsh C. Mariwala did what few Indians has done, challenged the family to change the family business for growth. Today he is a very wealthy man. 4. A rocket. India’s growth is higher than Chinas. 5. Good for business. Prime Minister Nerendra Modi is creating enormous expectations in reforms to ease business.

 

The big challenge for Norwegian business is not only lack of top management interest, but also lack of willingness from Norwegians to work from India.

It is no queue of Norwegians willing to become India expats.Norwegians want to work in New York, London, Dubai or Singapore. Cities with high standards of living, with huge Norwegian communities. Norwegians don’t want to be stuck in a traffic jam in a non-air-condition taxi.

We met Helge Tryti from Innovation Norway in the historic Bombay Yacht Club, established in 1846. He was not able to come up with a long list of names of Norwegian entrepreneurs in India.

He indicates that no more than 20 Norwegian businesspersons live in India. In comparison, around 2000 Norwegian expats live in Singapore.

-Norwegians are too well accustomed, says Tryti.

He is supported by Anders Lier:
-Many Norwegians find it challenging to live here. But this will change now that India is making massive investments in infrastructure.

Innovation Norway is increasing their focus on India. At the same time as the new Norwegian Consulate is opening up in September, Innovation Norway will establish a second Indian office -in Mumbai.

Thanabal Vijayaindra is in a bus in Mumbai. Many Norwegians start talking to him in English when they meet him abroad. But Vijayaindra live in Norway and has worked for both Telenor, Hydro and Yara.

His CV is better than most others are. His native place is Sri Lanka. He is a Global mobility consultant, assisting companies with employees working in multiple countries to relate to both Norwegian and local regulations. He is currently building up expertise on India, and believe we will soon see a lot more Norwegians in India.

-Norwegian businesses are more interested in what happens in India, and eventually India will become a huge market for Norway. It is not simple to establish business activities in India. It is a jungle of bureaucracy here, Vijayanindra says.

Major growth
India has a population of more than 1,2 Billion. Around half of the population is below the age of 25. GNP is 5500 USD per capita which is half of China’s and just a third of Brasil’s.
A major challenge for business in India is a jungle of local regulations, but the reforms that will open up the Indian market -is on its way.

In Q4, 2014 the GNP had a growth rate of 7,5 %. India is growing faster than China. The inflation has stabilized from above 10% the last years.

Narendra Modi’s triumph in the 2014 General Elections has created enormous expectations to economic progress.

 

The article you just read is my English translation from the article published in Finansavisen, Norway: Click here to download a readable PDF of the article in Norwegian