Indian trade and relations expert Prashanta Mukherjee cautioned iwi at the recent Maori Agribusiness and Primary Industries Forum that more time was needed but it would be worth the wait.
“The NZ-China FTA took 15 rounds and five years. So far we are only up to round eight after three years so we feel there is possibly another three years still remaining on this.”
As for most things when dealing with India, “absolute patience” was required but the rewards in delivering the right products to a burgeoning middle class could be significant. NZ apples sell at up to three times more than local apples to a market happy to pay the price. NZ wine was well regarded because Indians tended to make their choices based on taste rather than just “drinking to get drunk” and appreciated high quality, labelled products.
“You have to remember this is a country where class is not driven just by caste but by education.”
India is NZ’s 12th largest trading partner with coal the main export there followed by wool. In total $1.1 billion of goods are traded between the two countries with the bulk, $726 million, exported from NZ. In only five years NZ exports there have doubled while India has become NZ’s largest source of overseas students. The Government’s goal is to grow merchandise exports to India to at least $2b a year by 2015.
Mukherjee dispelled some myths about the nation to iwi, in turn highlighting some opportunities that may exist for iwi operations here.
“It is a myth that all Indians are vegetarians,” he said.
“In the northern regions vegetarianism is prevalent but not in the northeast. In 2012 India was the world’s largest beef exporter, even ahead of Brazil, and is the world’s largest dairy farming nation with 200m farmers.”
He said that represented a conundrum to iwi exporters trying to sell dairy or meat products to the largest producer in the world.
However, given the rise in the middle class and an appreciation for value and quality, opportunities did exist.
“You have to find your niche within this huge market – that may be 10m of the population. You don’t want to try and trawl the whole country. It is simply too big and too diverse.”
The temptation was to focus upon the Tier 1 cities like Mumbai or Delhi but they would prove simply too expensive and competitive to try to operate in.
“You have every multi-national there competing against you and you can be sure they will have very deep pockets. You are better to consider some of the Tier 2 cities.”
They included cities like Nagpur, the largest city in central India with a population of 2.4m.
He said iwi would appreciate some aspects of Indian businesses like the fact many are still closely-held family operations.
“This means if you are negotiating and you are invited to a daughter’s wedding you had better go. It is an honour.”
Hierarchy based on age and seniority in such businesses was also important. There was a deep love of korero paki – talking about all and everything that might be happening, often well beyond one’s immediate interests. Not unlike lengthy hui, Indians would often “argue the hell out of anything” that might be up for debate.
“You will often find in India emails are not replied to. Next to Americans, Indians are the greatest users of telephones on the planet.”
Having a sense of humour was mandatory, particularly when it came to getting to grips with Indian Jugaad, a type of “number eight wire technology with some twists”.
At a practical level, tariffs were steep from 16%-74% but should not be off-putting “for consumers are prepared to pay for quality”. However, the tariffs could be subject to sudden changes, depending upon local and central government policy, almost on the day.
Perhaps surprisingly, India now sports some of the most stringent food quality laws in the world, having adopted “top shelf” protocols from around the world.
Positioning for the market is essential in India where huge income disparities still exist. But that didn’t mean lower income earners were not aspirational and not a market to consider.
Mukherjee gave the example of Unilever’s Palmolive shampoo. Sold in single Rupee packets, it was as popular with the poor as with the rich, providing the opportunity at that price and size for even those with little to aspire to be the model often seen on billboards through the cities.
Commandments for exporting to India
• Nothing is easy. Accept it and you will be far more long-term in your approach.
• Patience is essential to be successful.
• When someone says “You are the expert”, you know you were set up.
• When someone says "You do not understand our country”, that is often as close as you will get to a no in India.
• When you are told “Basically no problem”, it is a big problem.
