How to break down your approach to India

It’s essentially impossible, from a business point of view, to simply consider India. The country of more than 1.2 billion people is made up of 28 states and seven union territories, each of which has a certain amount of autonomy in terms of economy and business. It’s like saying you want to do business in the United States, as Peter Sutherland, vice-chairman of the Canada-India Business Council in Toronto, points out. “You have to decide, ‘Where is the market for the product or service I produce?’ You don’t take on the entire country all at once.”

So you look for the best way in. And for international businesses, the gateway to India is increasing the state of Gujarat.

Photo: Mark Chivers

That is why Canada has joined Japan as a partner country for Vibrant Gujarat 2013, a global trade summit to be held in Gandhinagar Jan. 11 to 13, 2013. Indeed, in 2011 Canada’s trade with India increased almost 28% from the previous year, to $5.1 billion; the federal government has forecast $15 billion in bilateral trade by 2015. “The event is designed to attract business interest and businesses from around the world into Gujarat and into India,” says Sutherland.

For the last summit, in 2011, more than 8,000 delegates attended from about 100 countries to meet with many of the leading CEOs and key players of business in India. Among the 85 delegates from Canada were top firms in the information and communications technologies fields, oil and gas, infrastructure, clean technology and financial services. Some Canadian provinces and federal agencies also participated. For 2013’s event, the expectation is 10,000 delegates from around the world, with a showing from Canada similar to 2011’s.

Gujarat, which is located on the coast of western India and has access to many major port-based countries including the United Kingdom, Australia, China and more, is one of the leaders among the states, according to Sutherland, exceeding the national average growth rate. With a population of more than 60 million, Gujarat is billed as the second most industrialized, third most urbanized and fifth richest state in India. For the past six years, its average growth rate has been 10.28%—one of the country’s highest. In 2008, the state’s authorities signed 8,000 memoranda of understanding committing to $450 billion in investment.

It’s also widely considered to be the most business-friendly state in the India, Sutherland explains, attracting people from both local and international firms. Canadian firms including McCain Foods and Bombardier, which makes subway cars for the Delhi Metro Rail Corp., have plants there. “Decisions are made quickly,” he adds. “It’s easier to do business there than in many other states in India.”

Also guaranteed to add to Gujarat’s importance is the planned $90 billion 1,500-km-long Dedicated Freight Corridor, which will connect the business and political capitals of India and pass through six states—more than a third of it through Gujarat. In addition, an area of 150 km on each side of the freight corridor—the Delhi-Mumbai Industrial Corridor–will be developed with the intent of stimulating foreign investment, local commerce and real estate development. More than 60% of the DMIC will be in Gujarat.

Recent discussions between government and state officials as well as prominent Indian business people have focused on certain areas in which Canada might have some interest, according to Sutherland. One was renewable energy (earlier this year, the largest solar farm in the world was opened in Gujarat); another revolved around the possibility of importing liquefied natural gas into India from Canada’s east coast. And because the state is growing so quickly, Sutherland adds, there is a skill shortage in terms of labour—a need to train Gujarat’s large young populations quickly, which could create an opportunity in the Canadian sector for schools for electricians, welders and so on.

As for next year’s Vibrant Gujarat, the C-IBC’s Sutherland is predicting success. “I think it will be even bigger and better than in the past,” he says. “Gujarat’s reputation is growing so more countries are looking at it as the gateway into India—and that’s important because more and more countries are looking at India.”

ABOUT GUJARAT

• Population: 60.38 million, about 5% of India’s total
• Literacy rate: 79.31%
• Urbanization rate: 42%, 3^rd most urbanized state in India, 2^nd most industrialized  and 5^th richest state
• Share of market capitalization on Indian stock market:  30%
• Economic growth rate: 10.08%
• Economic growth rate target in Five Year Plan: 11.2%