#AccessIndia Issue 1 by Global Opportunity

ACCESS INDIA FOREWORD RICHARD MCCALLUM MANAGING DIRECTOR, UK INDIA BUSINESS COUNCIL

TAKING YOUR FIRST STEPS IN THE INDIAN MARKET Dear Reader, Welcome to first edition of Access India. This new publication from the UK India Business Council is designed to be your guide to doing business in the Indian market. With the annual growth rate currently outpacing China at over 7% and with well over a billion consumers, India represents the next big opportunity for UK companies. But for a UK company with no experience of doing business abroad, or limited India knowledge, knowing where to start and how to get going can be a daunting task indeed. However, there are numerous sources of support and advice to help you on your way, including UKTI, the UK India Business Council, the British Business Groups, the Intellectual Property Office, UK Export Finance and now, of course, this publication. When I was setting up my first Indian company, Flying Fox, knowing where to turn for expert advice and practical tips on subjects like incorporation, setting up an India corporate banking account, or registering my Intellectual Property in India would have saved me huge amounts of time and money. That’s why I’m delighted to be able to present to you our Access India guide. Access India combines case studies

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which focus on how UK companies, in particular SMEs, have successfully seized their India opportunity, with articles from leading India business experts on the critical issues you need to understand when entering the market. In this first edition, we carry information from the Intellectual Property Office on the five steps you need to take to protect your intellectual property in India, guidance from Fieldfisher on how to set up a franchise in India, and advice from our own Arun Narayan on our market entry platform in Mumbai and how it could help you launch your business into India. Of course there is an endless list of possible topics to cover, and if you have suggestions of areas you’d like to see covered, or if you have questions about some of the areas covered in this issue, please get in touch. Our expert advisors in the UK and our dedicated consultants in India will be more than happy to help you understand and access the Indian market. We are very grateful to all contributors, distributors, and in particular our member network who made this new India business resource possible. I hope you find Access India useful and enjoyable.

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PRACTICAL ADVICE 22

Intellectual Property in India

Doing business in India Ran Chakrabarti, Partner, IndusLaw 26

Working with Indian nationals in the UK Padma Tadi, Lawyer, Irwin Mitchell 30

A soft landing and accelerated success Arun Narayan, Director, UK India Business Council Mumbai 34

Intellectual Property in India

Foreword

Richard McCallum, Managing Director, UK India Business Council 5

Editorial

Sarah Cartledge, Editor, Access India

Chocolate coated Lyn Pitt, Managing Director, DT&G Ltd 14

Electrifying new business wins

Carl Simon, Commercial Director, Phasix ESD

Kumar Iyer, Director General, UKTI India

Meeting the demand for civil engineers in India

Partnership delivering tangible opportunities

UK India Business Council News

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Chris Gibson, Executive Director, Institution of Civil Engineers (ICE)

Jane Hedin, Senior Policy Advisor, UK Intellectual Property Office 38

Franchising in India

Lisa Sen and David Bond, FieldFisher 42

Entertaining experiences in the heart of the business world Laurence Croneen, Founding Director, Deeper Blue 46

Effective responses to Indian opportunities Alasdair Spink, Managing Director, Odgers Berndtson

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ACCESS INDIA EDITORIAL SARAH CARTLEDGE EDITOR ACCESS INDIA

WELCOME TO ACCESS INDIA

Editor Sarah Cartledge sarah@inspirepublishing.co.uk Art Editor Nadia Nelson nadia@tpggroup.co.uk Creative Director Oscar Bowring oscar@inspirepublishing.co.uk Editorial Assistant Jack Ball jack@inspirepublishing.co.uk Sales Director Karen Frieze karen@inspirepublishing.co.uk Publisher Steve Gardner 020 7490 0609 steve@inspirepublishing.co.uk For UK India Business Council Nandini Saxena nandini.saxena@ukibc.com

Special thanks to Adam Pollard For magazine enquiries please contact comms@ukibc.com +44 (0) 207 592 3040 enquiries@ukibc.com www.ukibc.com UK India Business Council HEAD OFFICE 12th Floor, Millbank Tower 21-24 Millbank London SW1P 4QP United Kingdom Printed in the UK by The Magazine Printing Company, using only paper from FSC/PEFC suppliers. www.magprint.co.uk

inspire* publishing

Published by Inspire Publishing Fergusson House, 124-128 City Road, London EC1V 2NJ part of

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It is my pleasure to welcome you to the first edition of Access India, the newest publication from the UK India Business Council. Our primary goal in Access India is to guide and enable smaller and more medium-sized UK enterprises to take advantage of the growing opportunities in India. The market potential of India is markedly apparent and excitement over India’s rise is logical. However, the market remains extremely complex, particularly to those UK SMEs whose experience of operating and succeeding in India may be limited or even nonexistent. As the world’s largest democracy, India’s impressive growth is set to continue with a noticeable rise in the demands of its growing consumer class whose wages are moving upwards. Responding to these shifting dynamics, demands, expertise and proficiency born out of first hand experience. Familiarity with the Indian market and widespread experience across the board positions the UK India Business Council as the first port of call for UK companies looking to engage meaningfully in this dynamic country. Whilst consensus from our

commentators suggests most UK businesses should have a presence in India, albeit to varying degrees, extensive preparation and comprehensive due diligence are pivotal to ensuring maximum success. I hope that the expertise and dedicated advice contained within this publication will help those smaller UK businesses make those crucial first steps into the India market. Please let us know if there any any areas that you would like us to cover in future issues. We are keen to incorporate your stories and experiences, so do get in touch. sarah@inspirepublishing.co.uk

“AS THE WORLD’S LARGEST DEMOCRACY, INDIA’S IMPRESSIVE GROWTH IS SET TO CONTINUE WITH A NOTICEABLE RISE IN THE DEMANDS OF THE GROWING CONSUMER CLASS WHOSE WAGES ARE MOVING UPWARDS.”

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PARTNERSHIP DELIVERING TANGIBLE OPPORTUNITIES PARTNERSHIP BETWEEN UKTI AND THE UK INDIA BUSINESS COUNCIL IS HELPING UK COMPANIES RESPOND TO INCREASING INDIAN OPPORTUNITIES SAYS UKTI INDIA’S DIRECTOR GENERAL, KUMAR IYER India is the fastest growing major economy in the world and one of the largest. Its demographics are positive. Half of its 1.2bn population are below 25 years of age. The middle class is also growing exponentially. This means a strong consumer base with significant opportunities for business growth. India has strong ties with the UK, a reforming Prime Minster in Narendra Modi, and a forecasted GDP growth rate of over 7 per cent (in a world of otherwise low growth and low yields). Consequently, UK companies looking for mid to long term returns are taking a close look at India. The UK is the largest major investor into India with UK companies held in high regard, scoring favourably in trust and quality. Alongside companies that have become household names in India including Hindustan Unilever, BP, JCB, and Vodafone, there are countless smaller but no less innovative companies that are creating a niche for

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their products and services. India has ambitious big budget programmes designed to attract foreign partners and investment in its growth. Prime Minister Modi’s Make in India programme is widely publicised, but others cover smart cities, renewable energy, digital, skills, and startups. Mr. Modi himself has called upon India to draw upon the UK’s strengths in technology, innovation, and capital.

Unknown opportunity

There are many relatively untapped opportunities for small companies. Just recently UKTI and UK India Business Council ran a delegation of UK food and drink companies to Mumbai and Bengaluru. Many of the companies saw the scale of opportunity and came away with various exciting leads. Another group of automotive companies took part in Auto Expo 2016 and we are looking forward to seeing new business wins in the coming months. Fintech is another growing sector where India has a real demand for disruptive technologies

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to service rural customers. There are further opportunities in agritech, healthcare and pharma, energy, skills, sport, infrastructure, and retail. These are all sectors that will play a role in the modernisation of India. UKTI and the UK India Business Council can help you explore the Indian market and win business. The UK has its largest diplomatic presence in the world in India, with a strong network of diplomats and local specialists spanning the entire country. We have trade and investment experts based in New Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata, Chandigarh, Pune and Ahmedabad. With our national and state level government contacts, we can effectively support your business. Additionally, we can help with company launches and missions. The UK Government’s support for companies focuses on only the things government can do best, which is why our partnership with the UK India Business Council is critical. The UK India Business Council is our close partner on the ground, providing companies with the day-to-day practical support required to get started in market. This includes market research and advice at the start of your India journey, helping with premises, recruitment, and establishing your entity in country. By using the UKIBC’s Business Centres and Launchpad® service, companies can de-risk their entry and reduce cost.

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We would urge you to also track the live opportunities that we post on UKTI’s Exporting is GREAT platform. This is updated daily with business and export opportunities in India. It is undoubtedly a good time for UK companies to take a closer look at India with the partnership between UKTI and the UK India Business Council offering a strong platform to help you in that process.

“THE UK HAS ITS LARGEST DIPLOMATIC PRESENCE IN THE WORLD IN INDIA, WITH A STRONG NETWORK OF DIPLOMATS AND LOCAL SPECIALISTS SPANNING THE ENTIRE COUNTRY.”

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SUCCESSFUL “DOING BUSINESS IN INDIA” TRAINING DAY

UKIBC.COM RELAUNCHED TO HELP YOU GROW YOUR INDIA BUSINESS The UK India Business Council’s new website has been developed to provide UK companies with online business support, including a range of exclusive content on the opportunities in India market, as well as new features designed to help you successfully access those opportunities. Ukibc.com gives you access to all of our market intelligence and analysis, recordings of our events and webinars, live business opportunities, our new guide to doing business in India,

and our service directory of India-based service providers. All this content is available for free when you sign up at ukibc.com/register. Speaking about the launch of the new website Kevin McCole, UK India Business Council COO, said: “With our new India business guide, information on live opportunities, and a range of on-demand resources, our website allows more UK companies to get to grips with the Indian market than ever before.”

The UK India Business Council held a successful full day of India training for London based SMEs as part of the Gateway Asia II programme. Participants received an introduction to the Indian market and practical guidance on how to do business there, via one-to-ones with India experts, online tutorials, and seminars. The programme has been partfunded by the European Union. You can access our free India business guide covering topics such as exporting, Intellectual Property and Indian business culture at ukibc.com/india-guide/ how-india/

HIGHLIGHTING OPPORTUNITIES IN THE INDIAN STATE OF ODISHA The High Commission of India, Confederation of Indian Industry (CII), and the UK India Business Council held an exclusive seminar for UK companies in February 2016 to showcase the trade and investment opportunities in the Indian State of Odisha. Delegates heard from Debi Prasad Mishra, Honorable

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Minister of Industries, Govt. of Odisha who provided an overview of the opportunities in the State available to British businesses and explained how best to access them. You can view a short video summarising the opportunities available in Odisha at ukibc.com/resources/ opportunity-in-odisha/

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ACCESS INDIA UKIBC NEWS

‘AN UNBEATABLE COMBINATION’ INDIA-UK BUSINESS CONVENTION 2015 In September 2015 the UK India Business Council successfully brought together over 700 delegates for the India-UK Business Convention 2015, in New Delhi. The theme of the convention was ‘An Unbeatable Combination’, a phrase coined by Indian Prime Minister Narendra Modi to describe the business relationship between the UK and India. You can watch recordings of key sessions from the convention, including those on ease of doing business and complying with India

corporate law, at ukibc. com/policy/online-indiauk-business-convention/ The UK government was represented by Rt Hon. Sajid Javid, Secretary of State for Business Innovation and Skills as well as Rt Hon. Lord Maude, the then Minister for Trade and Investment. Amitabh Kant, Secretary, Department of Industrial Policy and Promotion provided the Indian Government’s perspective. UK and Indian business leaders were there in force: Ivan Menezes, CEO of Diageo, Luis Alvarez, CEO of BT Global Services, Sir Gerry Grimstone, Chairman of Standard Life, Ashok Vaswami, CEO – Personal and Corporate Banking, Barclays as well as senior executives from leading multinationals.

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REPORT ON BRITISH BUSINESSES IN INDIA In September 2015 the UK India Business Council, KPMG and HSBC launched a report that identifies which British businesses are currently operating in India. This report, which was exclusively launched to over 700 delegates at the India-UK

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Business Convention held in Delhi, aims to profile every UK business succeeding in the Indian market. You can download a free copy of the report and find out if your competition are already in India at ukibc.com/reports/ report-on-british-businessin-india-september-2015/

INDIAN PRIME MINISTER VISITS THE UK In November 2015 Narendra Modi became the first Indian Prime Minister to visit the UK in a decade. The visit came at a time when the UK-India business and economic relationship is strong and moving with a positive momentum. As part of his trip Narendra Modi addressed UK companies at an event in London, supported by the UK India Business Council. You can watch his address to UK plc at ukibc.com/resources/ narendra-modis-speechat-guildhall-london/ Speaking about the visit Richard Heald, Group CEO, the UK India Business Council said “A number of significant announcements were made during the visit. The Prime Ministers jointly announced over £9bn worth of deals across a range of sectors. The revitalisation of the UK-India CEO Forum will help enhance the economic relationship and I’m delighted that the UK India Business Council will be pivotal in the Forum as Secretariat to the UK CEOs.”

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ACCESS INDIA DT&G LTD

CHOCOLATE COATED CHOCOLATE HAS OFTEN BEEN CONSIDERED A TREAT IN EUROPE AND THE AMERICAS, BUT CHOCOLATE COATING MACHINERY IS IN BIG DEMAND IN MANY AREAS AROUND THE WORLD, DT&G’S MD LYN PITT TELLS JACK BALL Ever since its arrival into Europe during the 16th Century, chocolate has long been a staple commodity within modern society with confectionery production heavily influenced by the introduction of industrial processes. DT&G Ltd has 50 years’ experience in manufacturing Finn Chocolate Coaters and Polishers and have recently relocated due to ‘DT&G IS STILL IN increased production REGULAR CONTACT and development WITH THE UK INDIA to its factory in BUSINESS COUNCIL Bromborough, WHICH IS NOW Wirral. The ASSISTING WITH THEIR company’s Finn FUTURE STRATEGY name encapsulates IN THE MARKET.’ the very highest standards in the coating and polishing of chocolate dragées a bite-sized form of confectionery comprising nuts, raisins, coffee beans, ginger, marshmallows, seeds or cereals and many other products that are coated in a hard outer shell. Today, with hundreds of Finn Belt Coaters and Polishers in reliable and daily operation globally, the company continues to set the industry standard in beltcoating technology, with machines able to increase production and

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lower the man hours required within panning environments. Finn machines are supplied to leading confectioners as well as smaller niche companies in the USA, Europe, Australia, Venezuela, Mexico and India ,among others. When an enquiry came through from a world-leading chocolate manufacturer regarding their Indian manufacturing facility in 2014, DT&G Ltd welcomed the opportunity. Through their long standing relationship with UKTI, DT&G benefits from the various services and advice on hand, helping them grow their exports to 80% of their overall turnover. Initially DT&G sought advice from its UKTI International Trade Adviser, and was then introduced to the UK India Business Council to establish the potential opportunity in the market and to obtain advice on how to do business in a country that the company had not previously engaged with. Lyn Pitt, Managing Director at DT&G, took advantage of an upcoming trade mission organised by UKTI North West to make an exploratory visit to India. She commissioned the UK India Business Council to undertake further research to ascertain

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interest from other chocolate manufacturers as well as identify key contacts in the industry. As a result, a full programme was organised in advance with clear objectives set for the visit. The trade mission was a success and Lyn has since made two follow-up trips to secure orders and solidify the company’s ongoing working relationship with customers. The company has also received visits from Indian companies to their UK factory to collaborate further on future

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projects. Sales to India have so far reached over £750,000, with more orders now in the pipeline. “The help and advice provided by the UK India Business Council has been invaluable, particularly in finding the key people in the industry to talk to, opening doors that otherwise we would not have been able to do”, says Lyn. Partner organisations such as Grant Thornton have also been instrumental in the company’s inroads into India and have provided DT&G with the knowledge and confidence to conduct business in the country. The Indian business community is very competitive and efficient. With clear objectives set, effective communication, a will to work as a team, and a process system in place, the delivery and ability to overcome any problem is highly achievable. Whilst the Indian market is both exciting

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LYN PITT MANAGING DIRECTOR

and challenging, it is one that is also based on mutual respect and openness. Confectionery production has to be designed to accommodate the temperature and humidity for successful operation, with bespoke solutions supplied by local specialists. “THE HELP AND ADVICE DT&G is still in PROVIDED BY THE UK regular contact INDIA BUSINESS COUNCIL with the UK India HAS BEEN INVALUABLE, Business Council PARTICULARLY IN which is now FINDING THE KEY assisting with their PEOPLE IN THE INDUSTRY future strategy in TO TALK TO.” the market. The company believes that there is still a significant untapped potential in India as it secures more orders from existing customers. Due to customer demand, DT&G is also working in partnership with the University of Lancaster on new product developments and will soon be launching a new system into the industry. As a result, Lyn looks forward to returning to India, in the non-too distant future to introduce these product developments into the Indian market.

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Lyn Pitt has been the Director of DT&G Ltd since 2005. The company designs and manufactures chocolate coating and polishing technologies. Lyn’s role is to work with clients to ensure that their chocolate manufacturing process is cost efficient, ensuring an investment in DT&G’s technology guarantees a smooth production process and ultimate success in the confectionery industry. Prior to her current role at the company Lyn has held positions at Barclays Bank, the Post Office, and the University of Liverpool.

FURTHER INFORMATION

www.dtg-ltd.co.uk

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PHASIX ESD

ELECTRIFYING NEW BUSINESS WINS THANKS TO THE UK INDIA BUSINESS COUNCIL, PHASIX WAS ABLE TO SECURE ITS FIRST TWO ORDERS IN INDIA WITHIN TWO WEEKS, SAYS COMMERCIAL DIRECTOR CARL SIMON Phasix is an established UK based outsource provider of Electrostatic Discharge (ESD) testing services to the semiconductor design industry, trading in many countries. Semiconductor companies regularly purchase these services to qualify the robustness of newly developed packaged semiconductor devices. These integrated circuits or ICs - the little black chips that are present in virtually every modern electronic device - range from a modest pin count of two or three to several thousand pins, each of which requires accurate testing to verify its robustness against static. With its ongoing investment from foreign and indigenous companies, semiconductor device development in India is rapidly growing. Therefore for Phasix, India offers an exciting target market for its next phase of new business exploration.

Background

The need for ESD testing is triggered by continuing investment in new device developments. ESD is cited by semiconductor companies as one of the top three critical issues that need resolving when designing new ICs. Damage caused by static has been an ever-present threat in the world of

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semiconductors since electronic devices were invented and is increasingly important as device geometry continues to shrink and functionality/performance increases. Unfortunately, this problem will not disappear anytime soon, but can be dealt with by designing in suitable input circuitry that will protect each pin from the risk of damage by ESD, both during manufacture and later when the device is installed in the application for which it was intended. Failures due to ESD do not always show up immediately, but can be more subtle, taking time to become apparent – the so-called ‘walking wounded.’ Therefore the testing process itself must be reliable and repeatable. Warranty recalls can easily kill semiconductor companies (and their customers) overnight. The global semiconductor industry represents the leading edge of technology and, as such, demands a partner focus on delivering a strong customer service proposition. Hence, qualification services must be timely, highly responsive and cost effective. More importantly, they must show 100% compliance with the industry testing standards. Accredited

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ESD testing is therefore a critical differentiator for any ESD test lab seeking to win new business. For Phasix, demonstrable compliance is achieved by investing in ongoing UKAS services to maintain accreditation to the ISO17025 standard for testing laboratories. This means customers do not need to visit and audit Phasix to be sure of its ability to deliver accurate testing. Shipping of semiconductor samples to/ from the UK is also relatively fast and low-cost. Consequently, the location of Phasix has not historically been a barrier to sales.

Targeting India

In its modest eight years of trading, Phasix has expanded business from the UK to 14 countries throughout Europe, the Middle East, Russia, and America. This expansion has been achieved primarily without the need for agency partnerships. However, the local culture of Indian companies doing business with foreign ones was believed by Phasix to be best served with local contact – either by phone or better, face to face. Therefore the possibility to work on a joint project with the UK India Business Council - a team of extremely friendly, knowledgeable, local experts - was an opportunity hard to resist. Several discussions ensued, leading to the appointment of a project manager. The scope of the project was agreed, with targets and key milestones to make

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progress easy to measure. The use of PC based communication tools for chat and messaging made the whole project very workable, without the need to jump on a plane. A simple, shared spreadsheet was all that was required to record the work completed and identify current status. Essentially, Phasix required a properly researched, contacted and qualified list of target companies that ranged from semiconductor designers through to complimentary service providers and to potential agents. Unlike some projects, where the output may be some glamorouslooking report that actually does very little to return the investment made, the tangible deliverables in the project were evident early on. This meant each assumption could be tested and challenged, allowing the work to be shaped and moulded accordingly as the project progressed. In addition, a fixed price for the project was always very helpful for budgeting in a relatively small company setting.

Outcomes

Quite amazingly, within two weeks of project completion, Phasix was able to secure its first two orders from the India market. Two weeks – a truly impressive feat! Even with the (expected) lower margins involved the value of these contracts was still sufficient to repay the entire investment in the UK India Business Council

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project costs. Furthermore, a list of good contacts from a range of companies who may deliver new business for Phasix in the future was forthcoming. The directors at Phasix were therefore extremely happy with the project outcome. Phasix’ past experience has shown that sustained follow up is always required to build relationships with companies who regularly require its services. The larger a contact base, the greater the chance that a customer somewhere will require ESD testing at any given point in time. Since these early days Phasix has also seen some repeat business from its first local customer. Therefore the objectives from the UK India Business Council project were clearly met and exceeded.

CARL SIMON COMMERCIAL DIRECTOR Carl Simon is the main commercial contact and has a broad engineering and business background covering engineering, sales, marketing, operations, and general management experience. Carl gained his MBA in 2000 which supplements his BSc in Electrical/Electronic Engineering from the University of Hertfordshire. His additional activities as a Management Consultant, providing practical help to SMEs in sales, marketing, operations, HR and business planning have equipped him well to develop Phasix.

Future direction

Although Phasix is still some way off from committing to a trip to India to develop these newly formed relationships, this will likely be the next logical step as it deepens its engagement with the market. The UK India Business Council is very good at communicating forthcoming marketing events where attendance is often beneficial to cement relationships with local companies. In time, one might hope that Phasix will invest in a local lab, but that is a question for a future date. In the meantime, there is some urgent testing to complete for an Indian company!

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FURTHER INFORMATION

Hi Gain Ltd T/A Phasix ESD Unit 14 Woodlea Park Medstead, Alton, Hampshire GU34 5AZ Tel: +44 (0)1420 565634 sales@phasix.co.uk www.phasix.co.uk

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INSTITUTION OF CIVIL ENGINEERS (ICE)

MEETING THE DEMAND FOR CIVIL ENGINEERS IN INDIA PARTNERSHIP BETWEEN THE UK INDIA BUSINESS COUNCIL AND THE INSTITUTION OF CIVIL ENGINEERING IS HELPING TO PROMOTE UNIVERSAL STANDARDS OF EXCELLENCE, SAYS CHRIS GIBSON EXECUTIVE DIRECTOR AT THE ICE

The Indian Government is set to spend an estimated US$1trillion by 2020 on a new programme of infrastructure projects, including roads, ports, railways, airports, energy projects, urban regeneration programmes, new cities and towns. This huge promise of investment presents an exciting opportunity for members of the Institution of Civil Engineers (ICE) to be part of a major infrastructure development programme that will improve millions of lives. ICE is a charity – we are bound by a Royal Charter to act in the interest of the populations we serve. Our core mission is to promote the art and science of civil engineering around the world. Civil engineers plan and deliver infrastructure, and membership of ICE provides them with access to unrivalled learning and networking opportunities to support their professional development. It is therefore important for ICE to maintain a presence in India and help steer our Indian members on their professional journey. Operating in India as an international professional

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membership organisation is no simple task, and the UK India Business Council’s Launchpad® programme is helping ICE reach and train the next generation of civil engineers. ICE does not yet have a dedicated presence in India – as it does in the UK, Hong Kong and other regions around the world – placing a limitation on our ability to support and guide the professional development of our growing Indian membership base. Through Launchpad®, however, we have been able to bridge this gap without incurring the associated legal risk or compliance that come with operating in India without incorporating.

UK India Business Council Launchpad®

ICE is using the UK India Business Council Launchpad® service as its India market entry model, providing a stepping stone to a permanent presence in the country. The UK India Business Council also employs a dedicated consultant in New Delhi as part of the programme to support the delivery of ICE’s business plan in India, including membership

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development, raising ICE’s profile as a learned society, and engaging universities to inspire the next generation of civil engineers. The Indian Government’s infrastructure development programme extends right across the country, so it is important for ICE to maintain and establish a pan India presence that supports our members delivering the projects, and where they work. The UK India Business Council’s network of offices in Delhi, Mumbai and Bangalore span the country, helping increase ICE’s ground “INCREASING presence and DOMESTIC AND implement our FOREIGN INVESTMENT membership IN INFRASTRUCTURE development HAS DRIVEN ambitions. INDIA’S BOOMING The UK CONSTRUCTION India Business Council’s INDUSTRY OVER THE knowledge of PAST FEW YEARS.” Indian cultural and bureaucratic challenges and understanding of professional organisations helps in extending ICE’s reach into the Indian market. The organisation has links with the Indian infrastructure sector, the higher education sector and the UK Government, allowing it to position itself as a springboard for ICE to reach our Indian members – promoting bilateral civil engineering knowledge transfer. Knowledge is ICE’s currency. Formed in 1818 to help industry

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learn and share civil engineering ideas and expertise, ICE now represents 86,000 professional civil engineers in over 150 countries around the world.

Excellence through teaching

Chartered Engineer status, or ‘CEng’, is the international benchmark of professionalism in engineering – the engineer’s passport to the global job market. ICE leads the way in promoting and maintaining civil engineering standards across the globe, awarding ‘Chartered Engineer’, ‘Incorporated Engineer’ and ‘Engineering Technician’ status to professionals who have demonstrated to their peers skill and knowledge in civil engineering. Similar to many countries around the world, India does not have enough civil engineers to meet the demand for infrastructure development and asset management. Skills development is a long-term challenge and, via Launchpad®, ICE members are working with universities to inspire the next generation of civil engineers who will build India’s future ports, train stations, housing developments and waterworks. ICE’s influence and relevance reflects the size of our membership. With the UK India Business Council’s support and ground presence in India, we have been able to connect more members with ICE representatives, providing the necessary support

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for professional development. I am therefore delighted that, in addition to academic qualifications in civil engineering, demand for professional qualifications is growing. Over the last six months alone ICE has grown the membership in India by 600 and has established four new student chapters at universities around the country. Increasing domestic and foreign investment in infrastructure has driven India’s booming construction industry over the past few years. With its economy taking pole position as the fastest growing economy in the world, India represents a huge potential market for infrastructure development in the decades to come. With the help of the UK India Business Council, ICE offers a world-class qualification for civil engineers to support this programme. ICE qualifications are not only an asset to any civil engineer’s curriculum vitae; they show commitment to ICE’s core values of promoting the art and science of the subject, and a commitment to lifelong learning. I would therefore encourage ambitious Indian civil engineers and students to consider becoming members of ICE.

CHRIS GIBSON EXECUTIVE DIRECTOR Chris Gibson is Managing Director of Thomas Telford Limited (commercial arm of Institution of Civil Engineers) and is responsible for growing the business by collaborating TTL and ICE’s knowledge activities. Chris runs ICE’s successful publishing, training, and recruitment businesses and spearheads ICE’s Indian engagement activities. During his time working for the ICE Group, Chris has helped to grow NEC (New Engineering Contracts) and ICE Publishing. The NEC portfolio has expanded and become the industry’s preferred contract. By creating the ICE Virtual Library and making more books and journals available electronically, its publications and knowledge have begun to reach a global audience.

LAUNCHPAD® SERVICE Find out more about Launchpad® by visiting www.ukibc.com/marketentry/launchpad/

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FURTHER INFORMATION

www.ice.org.uk Twitter: @ice_engineers

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PRACTICAL ADVICE INDUSLAW

DOING BUSINESS IN INDIA SETTING UP A BUSINESS IN A FOREIGN COUNTRY IS AN EXCITING ADVENTURE AND NOWHERE MORE SO THAN IN INDIA, SAYS RAN CHAKRABARTI, PARTNER AT INDUSLAW With the ease of doing business improving and the opportunities for foreign investment ever increasing, planting your feet on the ground nevertheless requires careful consideration of a multitude of things from the commercial viability of your business model to the nuts and bolts of running a business. Here are some of the key things that you will need to think about in structuring your Indian operations.

Relevant legislation

Foreign entities and investors who seek to invest and set up their business through a company in India are required to comply with the Companies Act, 2013 (the Act), the Foreign Exchange Management Act, 1999 (FEMA), domestic taxation laws relating to direct and indirect taxes and other such laws that may be relevant, depending on the nature of the business. A foreign entity may also operate in India in an unincorporated manner through a liaison office, branch office, project office, partnership, or otherwise through a joint venture or a wholly owned subsidiary (depending on the sector and compliance with foreign direct investment rules) by incorporating a private limited company or public company.

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Directors

Generally, under the Companies Act, 2013, a company needs a minimum of two directors, one of which must be resident (having spent more than 182 days in the previous calendar year) in India. Companies that exceed certain thresholds must have independent directors including female directors on the board. The rights and duties of directors are covered in the Act and it should be noted that directors are responsible for various defaults and noncompliances of the company under the Act and are included under the category of an “officer in default” for such contraventions.

Post incorporation

Post incorporation, a company is required to hold its first board meeting, appoint the first auditor and make such necessary filings including filing for a PAN (a Permanent Account Number), a TAN (a Tax Deduction Account INCORPORATION SERVICE Find out more about UK India Business Council’s business setup and incorporation service at www.ukibc.com/market-entry/ business-set-up/

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Number) and the registered office. Lease deeds for office space vary generally in their commercial terms, though they often have lock-in periods and a three-month deposit is common. Careful due diligence on selecting office space is recommended and zoning laws should be carefully researched. A company is required to file its profit and loss and balance sheet and other reports with the Registrar of Companies every year.

â&#x20AC;&#x153;A NUANCE OF DOING BUSINESS IN INDIA IS THE EXECUTION OF AGREEMENTS ON STAMP PAPER.â&#x20AC;?

Receiving funds from offshore

Companies receiving foreign investments must ensure compliance with FEMA and cannot operate a business in certain sectors (including atomic energy, lottery, gambling, betting, manufacturing of cigars or of tobacco substitutes and B2C e-commerce)1. Other business activities may receive investment under the Automatic Route or Approval Route, depending on the particular sector and the caps for foreign investment that may apply. In case of the former, no permission is required from any regulatory body in India to receive investment. Following progressive liberalisation of the economy over the last decade, most activities in India now fall under the Automatic Route. With respect to the Approval Route, foreign direct investment

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is allowed after approval has been granted by the central government sanctioning the company to conduct business operations in its respective field (for example, insurance)

Receipt of foreign investment

A company receiving foreign investment is required to file forms that confirm the nature of the funds received. Depending on the size of the investment and whether the company is a joint venture, we would normally advise a formal subscription agreement between the company and the investor and a shareholders agreement setting out the rights and obligations of each shareholder. Filings are required to be made to the relevant regulatory authority.

General operational considerations

With respect to employment, companies in India are governed by labour legislation at the state and federal levels. Certain labour laws are state specific and therefore a company in such state may be required to comply with the provisions contained in such law in addition to federal laws. Employment agreements are generally similar to anywhere else in the world, though financial compensation is normally broken down in a manner to benefit from certain tax allowances. You should consult carefully with an accountant to ensure the optimum benefit for the company and the employee.

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A nuance of doing business in India is the execution of agreements on stamp paper. All commercial agreements need be stamped according to the provisions of the relevant stamp law in a particular state. Generally, stamp duty is payable on certain specified instruments or documents at a flat rate, though in certain transactions (in particular, involving the registration of security documents in lending transactions) an ad valorem stamp duty is payable. An insufficiently stamped document is not admissible as evidence in a court of law of India.

Tax

Foreign companies are taxed only on income that is received in India, or that accrues or arises, or is deemed to accrue or arise in India. The corporate income tax applicable to an Indian company for the financial year 2016-17 is 30 per cent. Foreign nationals employed with the company in India and resident (spending more than 182 days in a year in India) are taxed on their global income (that is, money earned in India and income arising from assets overseas). It is therefore important that you take tax advice on structuring employment in India, in particular in the case of employing foreign nationals who become resident.

RAN CHAKRABARTI PARTNER Ran Chakrabarti is a dual qualified lawyer in India and England & Wales and a partner at IndusLaw in Delhi. He is a graduate of the London School of Economics and Kingâ&#x20AC;&#x2122;s College London. Before moving to India, he spent six years with leading international law firms in London and Singapore, working on cross-border project and financing matters across a range of sectors. His practice encompasses a broad range of matters including projects and project finance, mergers and acquisitions, private equity, corporate and commercial advisory, banking and finance and dispute resolution. IndusLaw is a multi-practice law firm with 15 partners and over 90 associates across four offices in Bangalore, Delhi, Hyderabad and Mumbai.

FURTHER INFORMATION 1

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or a full list visit of FDI restrictions www.ukibc. F com/india-guide/how-india/fdi-restrictions/

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ACCESS INDIA PRACTICAL ADVICE IRWIN MITCHELL

WORKING WITH INDIAN NATIONALS IN THE UK NAVIGATING THE EVER-CHANGING VISA APPLICATION REQUIREMENTS FOR INDIAN WORKERS CAN BE CHALLENGING, SAYS PADMA TADI OF LAW FIRM IRWIN MITCHELL

Doing business in India often necessitates travel in both directions. As a result many UK companies find that they need to facilitate UK visas for Indian clients or employees. At the same time falling foul of immigration legislation can attract significant criminal and civil penalties for businesses in the UK.

Working with Indian business visitors for short periods of time

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A standard visitor visa allows an Indian national to visit the UK for up to six months and undertake general business activities, including attendance at meetings, conferences, seminars, negotiating and signing deals and contracts. If regular travel to the UK over a longer period is required, a long-term visit visa that lasts one, two, five or ten years may be more appropriate and allows individuals to stay for a maximum of six months at a time. This can be a more cost effective and quicker option if entering the UK more than four times in any one year period. If the Indian national is an

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employee of a company which has a UK subsidiary and they are working on a specific internal project with UK employees, a visitor visa also allows them to advise and consult, troubleshoot, provide internal training and share skills and knowledge. However, there are restrictions that include not being allowed to complete paid or unpaid work in the UK, living in the UK for long periods (thereby making the UK their home over the course of frequent visits) or receiving payment from a UK source for activities undertaken during their visit (except in limited circumstances). UK SMEs therefore need to exercise caution when working with business visitors from India, who claim to have a right to work in the UK. If a visitor undertakes any non-permitted activities during their stay, this could lead to their removal from the UK and may have a detrimental impact on any future visa applications. Employers can also face fines of up to ÂŁ20,000 if found to be employing a worker illegally. It is important that UK

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SMEs clearly agree with Indian nationals from the outset what they will be doing whilst visiting, and ensure this falls within the activities permitted by the UK Visas and Immigration (UKVI).

Engaging skilled employees from India to work in the UK

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Other avenues available

If businesses based in India have a UK branch, an employee can seek to work in the UK branch through the Tier 2 (Intra-company Transfer) visa. The main advantage of this

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This can be achieved through the Tier 2 (General) points-based system. The UK SME needs to be registered as a licensed sponsor by completing an online application. Applications are usually dealt with in less than eight weeks. Once successful, the licence will be valid for four years. The job title will need to be identified in the Codes of Practice for Skilled Workers which sets out specific minimum salary levels that apply. The UK SME needs to be prepared to pay a salary of at least that amount. Usually, a resident labour market test (RLMT) must also be carried out by the UK SME in order to demonstrate that there is no suitable settled worker in the UK who can perform the role. This involves the role being advertised in prescribed publications for 28 continuous calendar days. If no suitable workers in the UK are identified, the RLMT will be complete. If, as a result of the RLMT, a suitable worker is identified who

can perform the role, the UK SME cannot proceed to offer the role to an Indian national. This can create difficulties for UK SMEs if they have offered the role to an Indian national and so it is recommended that any offers are made conditional upon the results of an RLMT. If the licenced sponsor application is successful it can assign certificates of sponsorship using an online Sponsor Management System to the relevant Indian national. Using this certificate of sponsorship reference number, the Indian national can apply for a visa under Tier 2 (General) which will be valid for up to five years, depending on the circumstances. Licenced sponsors must note that the UKVI may carry out unannounced spot checks so it is vital that UK SMEs have documented their process correctly and have complete employee records. Any failures by the UK SME could result in the sponsor licence being revoked and seriously jeopardise the businessâ&#x20AC;&#x2122; prospects of being able to sponsor migrant workers.

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route over the Tier 2 (General) option is that the UK branch is not required to perform the RLMT. However, as with Tier 2 (General) visas, the UK branch will need to be registered as a licensed sponsor. The four types of Intra-company Transfer visas available under this route are for long-term staff who can work in the UK between five and nine years in certain circumstances, short-term staff who can work in the UK for up to 12 months, graduate trainees who can work in the UK for up to 12 months or for however long the graduate training programme lasts (whichever is shorter) and skills transfer who can stay in the UK for up to six months. At present, the employee must be paid the higher of an appropriate salary as set out in the Codes of Practice for Skilled Workers or at least £41,500 for long term staff and £24,800 for staff in the remaining three categories.

Summary

Visa applications involving Indian nationals under the above routes can be completed online up to three months before the date of travel to the UK and a decision is usually received from the UKVI within three weeks. Provided UK SMEs diligently comply with the UKVI’s requirements, the above routes can be extremely effective in obtaining knowledge and talent from Indian nationals which can be particularly valuable for UK SMEs.

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PADMA TADI LAWYER Padma is an employment lawyer and business immigration specialist and is a core member of Irwin Mitchell’s India Group. Padma has a wealth of experience advising on both contentious and non-contentious issues, such as UKVI obligations and processes, intra company transfers and visa applications. She regularly supports on employment tribunal matters, advises on the drafting and negotiation of employment contracts, service/ consultancy agreements, restructures, as well as due diligence and disclosure requirements associated with corporate transactions. Her background as an employment lawyer means that she is able to pragmatically guide companies on employing non EU nationals in the UK without falling foul of any immigration obligations.

FURTHER INFORMATION

padma.tadi@irwinmitchell.com Tel: +44 (0)113 220 6239 www.irwinmitchell.com

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PRACTICAL ADVICE UK INDIA BUSINESS COUNCIL

A SOFT LANDING AND ACCELERATED SUCCESS THE UK INDIA BUSINESS COUNCIL’S NEW BUSINESS CENTRE IN MUMBAI IS HELPING UK SMES SUCCESSFULLY ENGAGE WITH INDIA, SAYS ARUN NARAYAN OF THE UK INDIA BUSINESS COUNCIL At the UK India Business Council we support UK businesses with the insights, networks, policy advocacy, services, business development opportunities and facilities needed to succeed in India. For those seeking practical advice, our specialist team provides a range of sector-specific research, market entry and expansion services that help businesses understand – and take – the opportunities. For those setting up operations in India, we also provide a home-away-from-home with

our network of UKIBC Business Centres in major cities, and an unrivalled network of government and business contacts, service providers and specialist UK India Business Council staff who can help support your business success. We have three UKIBC Business Centres in Mumbai, Bangalore, and Gurgaon. These centres, backed by UKTI, incubate UKbased companies looking to set up in India, providing a soft landing in-country. The idea is to create a welcoming and world-class

Right: Mumbai opening Opposite: UK India Business Council’s Chair, Rt Hon Patricia Hewitt

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environment for those setting up in India, whilst at the same time helping them network and build business partnerships to grow their business in the Indian market. Our latest centre which opened last year is located in Mumbai’s exclusive Equinox Business Park. We’re positioned at the entrance to Mumbai’s leading business district the Bandra Kurla Complex, or BKC, as it is locally known. Situated in West Mumbai, the

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BKC is perfectly placed for UK companies seeking to access India’s main commercial city, and its world class financial and professional services, life sciences, and retail sectors. The district is also increasingly seen as Mumbai’s pre-eminent financial district and rival to the traditional business district. Sitting on one of Mumbai’s main arterial roads, the ‘LBS Marg’ connects the Eastern

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Mumbai Equinox Business Park

CENTRE BENEFITS “The Mumbai Centre serves as a really useful addition to our own office which is open plan; great for a creative business. In fact, we use the meeting rooms and associated facilities at the UK India Business Council Business Centre in Mumbai regularly.” Mark Hannant, Director, Magenta

“The main advantages are like minded individuals that understand the UK-India perspective, as well as being a nice environment to work in.” Anil Chandel, Partner, K2 Partnering Solutions

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Suburbs of Mumbai to Central and South Mumbai with the Equinox Business Park also providing easy access to Mumbai’s international and domestic airports. As a result, the Park hosts many international companies. Of course our managed office space, meeting rooms, conference facilities and virtual offices combine easy access, full security and hi-tech facilities to create a home base that will be familiar to any company that has used similar facilities in other countries. Our ability to give UK companies the best chance of success in the Indian market, through our extensive in-country networks, stream of business development opportunities and specialist support staff, sets the Mumbai Business Centre apart from a traditional business centre. All of our centres, including Mumbai, run a wide variety of networking events and, through our Sector Policy Groups, we enable business people to meet each other, identify potential partners, suppliers and customers, and to learn from top business leaders and commentators, including those on our Advisory Council. On top of this we employ specialist staff in range of sectors who are available to give you guidance and advice on everything from the right route to market for your products to the identification of and introduction to suppliers, distributors, competitors, and

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potential business partners. Whilst our staff understand the needs of UK firms and how to operate in India, they are also passionate about sharing their knowledge and promoting interactions. Having facilities on the ground also allows us to go one step beyond your typical market entry consultant. Through Launchpad® we can employ a dedicated consultant to work exclusively on a company’s behalf. This allows us to take on the legal administrative, and financial technicalities and responsibilities so you can focus on your market entry strategy. This means we can de-risk your market entry, insulating you from taking on long term obligations before you’ve fully committed to the India opportunity. And when you’re ready, we can help you incorporate as well.

ARUN NARAYAN DIRECTOR, BANGALORE Arun is responsible for leading and growing the UK India Business Council’s footprint across South India. He also works on growing and nurturing partnerships with the respective Foreign Offices, Trade Bodies and State Governments in the region. He comes with extensive experience across industries including FMCG, Telecom and Payments in companies such as Coca Cola, Airtel, and American Express. He also earned his stripes in raising Foreign Direct Investment (FDI) during his stint with the Irish Trade body – IDA Ireland. Arun is a commerce graduate from Bangalore University with an EPBM from IIM Calcutta and is a trained Six Sigma Practitioner. Outside of his day job, Arun is an Early Stage Investor with investments within the Brick and Mortar, and Technology spaces.

FURTHER INFORMATION

Arun.Narayan@ukibc.com www.ukibc.com

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PRACTICAL ADVICE UK IPO

INTELLECTUAL PROPERTY IN INDIA LOCAL MARKET KNOWLEDGE AND PROACTIVITY BY UK SMES IS CRITICAL TO PROTECTING THEIR INTELLECTUAL PROPERTY IN THE VIBRANT INDIAN MARKETPLACE, SAYS JANE HEDIN OF THE UK IPO India is one of the world’s fastest growing economies and is showing no signs of slowing down in 2016. This vast and diverse country, home to 1.2bn people and a government with a strong commitment to development and reform, is attractive to investment and relocation by UK business. The demand for domestic growth is evidenced by campaigns such as Make in India and the recentlylaunched Start-Up India, both of which illustrate India’s commitment to opening up business markets for overseas companies. In any growing market, it is essential to protect and develop all your business assets including any intellectual property you own. The following are some starting points to consider.

Similar, but not the same

You may already own intellectual property (IP) within the UK or the EU and so may be aware of the protection systems available and how they work. However, don’t presume that countries like India with strong historical links with the UK, such as common language and legal systems, will

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have the same ways of working. India is a huge country, with complex national and regional markets that can differ radically from State to State. Like the UK, India is a member of the World Trade Organisation so all the main areas of IP, including trade marks, designs and patents, can be protected via registration and can be effectively enforced in the event of unauthorised use. However, there are some fundamental differences to be aware of. For example, copyright should be registered as this can help to prove ownership in criminal proceedings over infringement. Counterfeiting and piracy are widespread and the legal system in India can be complicated and slow. That said, the current Government of India is close to concluding an all-encompassing policy to improve the IP protection and enforcement regime. Such reforms will help to simplify doing business with India.

Be proactive

While this may sound daunting, applying the same good business practice and sticking to your business plan for IP protection

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will put you in a strong position to exploit the value of your trademark, design, or patent and allow you to take effective action against misuse, should this situation arise. Help is already available. The UK IPO has an attaché in India, located at the Mumbai Deputy High Commission, who can provide advice and assistance on all types of IP and how to protect it in India. They work closely with the Indian Government on IP strategy and can assist UK business in exporting or setting up in India. The IPO also has a range of guidance materials for protecting your IP abroad1 and specifically, in India2: UKTI offers support and advice and has unlimited expertise in overseas trading. It has trade specialists in nine cities within India and has expert online guidance3

ONLINE IP GUIDE Visit www.ukibc.com/india-guide/ how-india/intellectual-property/ for the UK India Business Council and Intellectual Property Office’s online IP guide.

for trading with and exporting to the country. UKTI’s partner, the UK India Business Council is also on hand to provide advice to UK-based companies wanting to set up in India and increase B2B (business to business) dialogue between both countries.

Know your territory

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As with all things in life, prevention is better than cure and there is no substitute for a comprehensive due diligence procedure. Taking proactive steps to protect your IP before you enter the Indian market is the first and most important step. As intellectual property rights (IPR) are territorial, it is important you apply directly to the Indian IPO4 or via an international organisation, like the World Intellectual Property Organisation, to protect your IP in India. If you find yourself in the situation where your IP is infringed, whether that be a design copied or a trademark used on counterfeit products, taking early action is vital. Don’t presume the problem will go away. Even if you aren’t too concerned about unauthorised use, (e.g. because you think your business can absorb the losses),

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there is the risk of damage to your business’ overall reputation. This reputational loss can be a significant over time. At this point it is imperative that expert legal advice is brought on board to deal with the problem at the earliest stage.

Local market knowledge

Getting your new business started in a domestic market is timeconsuming and keeping costs to a minimum will always remain an issue. You may be confident in negotiating with licensing authorities, handling VAT and tax returns and dealing with suppliers in the UK, but establishing these relationships overseas can feel a step too far into the unknown. So take advice from those with local knowledge, including trade associations and business support agencies in India, and don’t forget to seek advice from UK businesses that are already operating in India. You can also use an IP watching service that will, for a fee, monitor your IPR for potential infringement in a particular country. When you find the right opportunity, don’t delay. Securing your IP rights will help your business thrive in any market. ttps://www.gov.uk/government/publications/ h protecting-your-uk-intellectual-property-abroad https://www.gov.uk/government/publications/ extension-of-uk-intellectual-property-rightsabroad 2 https://www.gov.uk/government/publications/ intellectual-property-rights-in-india 3 https://www.gov.uk/government/publications/ exporting-to-india 4 http://www.ipindia.nic.in/

JANE HEDIN SENIOR POLICY ADVISOR Jane is a Senior Policy Advisor in the International Policy Directorate at the Intellectual Property Office (IPO) and link officer for India. She works closely with the India IP Attaché at the British High Commission in New Delhi as well as a range of stakeholders to help UK businesses navigate the often complex and fast moving IP system in overseas markets, developing policies to promote more consistent and straightforward IP regimes. The IPO provides a range of guidance for businesses intending, or already trading overseas, to use, protect and enforce their intellectual property within India. Advice is also available about the different types of IP rights, choosing the correct type of IP protection and how to value and licence IP assets (including collaborative research).

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FURTHER INFORMATION

For general enquiries email Jane at policy@ipo.gov.uk

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PRACTICAL ADVICE FIELDFISHER

FRANCHISING IN INDIA FRANCHISING PRESENTS A REAL OPPORTUNITY FOR UK BUSINESSES TO EXPAND INTO INDIA, SAY LISA SEN AND DAVID BOND OF FIELDFISHER Franchising is a long established commercial strategy for growth, distinguished from other forms of distribution and agency by control, ongoing support and training, and use of a common brand. It is an extremely flexible model and can help British companies of all sizes expand both within the UK and overseas, allowing franchisees to access business opportunities that would otherwise be beyond their reach with a higher chance of success than usual. So why do businesses use franchising? Would a corporatelyowned and operated network be easier to run and be more profitable? Well, not necessarily, for the following reasons: (a) With franchising, costly internal management is replaced with powerful financial incentives, namely the retention of profits created by the franchisee’s own endeavours and the risk of losing the capital it invested in the business. Franchising creates a financial synergy between the franchisor and its franchisees, so there is less need for monitoring and a greater probability of maximum performance by the franchisee. (b) Franchising is a solution to the capital, managerial and

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information constraints faced by expanding businesses, giving the franchisor access to capital that would otherwise be unavailable to it in a cost effective way and one that offers fair reward to the financier, i.e. the franchisee. Franchising also provides an efficient way to obtain the managerial expertise needed to grow the business. (c) On the international front, franchising allows businesses to leverage its franchisees’ local market knowledge as it expands into new markets. Low-cost capital, motivated managerial expertise and better local market knowledge are three key resources that should reduce a franchisor’s overall risk and have a significant positive impact on a franchisor’s financial performance. But perhaps the most important advantage of franchising is the improvement in business performance it generates, bringing entrepreneurs, full of determination and ideas, into the business. Although franchising offers clear commercial advantages, unless the business adopts an appropriate franchise structure, it is likely to encounter substantial difficulties and commercial frustrations. It is also fundamental that the business has some understanding

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of the market it wishes to enter and does not abdicate all responsibility to its franchisees.

Negating risk

UK SMEs that have a unique brand and business concept can consider franchising as a means to enter India. This is particularly advantageous if the business does not want to take the financial risk of investing large amounts directly in the territory. Furthermore, there are no mandatory legal requirements to register with any

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authority, provide a pre-contractual disclosure document or obtain consents before entering into a franchise agreement. Franchise relationships are governed primarily by the Indian Contract Act of 1872 and therefore it is important to have a comprehensive agreement that is clear and safeguards the rights and interests of all parties. To minimse risk it is recommended that trademarks are protected through registration to prevent infringement as soon as a company makes plans to enter

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India. However, some protection is available for unregistered marks under common law, especially for well-known trade marks. In addition, a disclosure document is recommended, outlining details of the franchise business, key terms of the grant of franchise rights, obligations of the franchisee, and risks for the franchisee in taking on the franchise. This is to prevent misunderstanding by the franchisee of their role in making the business a success and misrepresentation claims by the franchisee if they suffer loss. The key challenge is to find the right franchisee/master franchisee that will grow part or all of the brand in India. The franchisee must have the financial resources, networks and good reputation to meet the obligations and targets, as regulatory restrictions make lending to Indian franchisee companies difficult. Due diligence is highly recommended. The development schedule or targets must be realistic, bearing in mind the bureaucratic delays in obtaining consents to open and operate outlets and the challenge of finding suitable real estate. Market research is also recommended to ensure the goods or services are suitable for the specific territory. India has 29 states and seven union territories with varied local laws, customs and culture that have to be taken into account when planning business expansion and the actual role of the local business. Franchises

LISA SEN LAWYER Lisa Sen is a dual qualified lawyer; Indian Advocate and Solicitor (England & Wales) with 20 yearsâ&#x20AC;&#x2122; experience and specialises in commercial intellectual property. She has been assisting brands in many sectors including retail, food & beverages, hotels, education and services to expand internationally through various structures including franchising, licensing, joint ventures, distribution and e-commerce. She also assists clients to resolve or deal with disputes that arise from their relationship with their business partners and with third parties in India. Lisa is the co-author of the first book on franchising entitled â&#x20AC;&#x153;Franchising in Indiaâ&#x20AC;? published in 1998 by Eastern Law House.

FURTHER INFORMATION

Mobile: ++ 44 (0) 7846599580 senfray@yahoo.com www.fieldfisher.com

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are more successful if cultural adaptations are made. As such, the role of a local business partner can be particularly valuable. Resolving disputes can be complicated as it is difficult to prevent Indian parties going to court, especially if the agreement is terminated early for breach. The court process is can be bureaucratic and slow. However, if there is a violation of intellectual property rights then there is no option but to seek an injunction or interim relief through the local courts. It is generally preferable to have an arbitration clause with an arbitration venue located outside India in a country that is party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), and notified as a reciprocating territory by the Government of India. This will ensure that any award made in that country will be enforceable in India subject to public policy. With careful preparation, expert advice and a viable financial model, franchising can create value for a business and give it a commercial edge in an increasingly competitive market place.

DAVID BOND PARTNER AND CO-HEAD OF FRANCHISING David co-heads the firm’s Franchise and Licensing Group, with over 20 years’ experience helping businesses expand through franchise and licensed structures both domestically and internationally. David advises clients from across all sectors including retail, hotel and leisure, media, education, healthcare, and food and beverage with clients as diverse as Brighton College, Burger & Lobster, Whittard’s of Chelsea, SNOG and REISS. David has a particular focus on bringing franchise structures into new sectors, most recently working with the education, healthcare and pub sectors. David also advises various governmental bodies on how they can use quasi-franchise models to engage with third party providers – structuring relationships for the likes of TrustMark, Investors in People and the National Citizen service.

MARKET RESEARCH SERVICE The UK India Business Council can assist with your market research needs. find out more at www.ukibc.com/market-entry/ market-research/

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FURTHER INFORMATION

Tel: +44 (0) 2078614079 david.bond@fieldfisher.com www.fieldfisher.com

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PRACTICAL ADVICE DEEPER BLUE

ENTERTAINING EXPERIENCES IN THE HEART OF THE BUSINESS WORLD AN IMMERSIVE AND INTERACTIVE CUSTOMER EXPERIENCE IS CRITICAL TO ENSURING SUCCESS IN THE UNIQUE INDIAN MARKET SAYS LAURENCE CRONEEN, FOUNDING DIRECTOR AT DEEPER BLUE EUROPE & ASIA

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Lexus Pan European Launch for three new models including the GS, IS and NX.

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With its rapidly growing middle class, consumer facing companies operating in India are increasingly looking for new ways to differentiate themselves from the competition in India. Of course, experiences have always been at the heart of the entertainment business. However, the idea of creating an entertainment experience is beginning to take root across today’s business world. Traditional businesses are learning from pioneering entertainment brands like Walt Disney, Universal Studios and the Hard Rock Café. As a result, they are seeing the value of building more immersive experiences with customers in order to sell their brand and products. For many years, the hotel, transport and FMCG industries have embraced the power of creating experiences in order to generate an emotional connection with their customers. According to its Marketing Director, Carlsberg has become the fastest growing beer company in India by continuously “strengthening its brand position by creating avenues for consumers to have the Carlsberg experience in India”. Note: it’s not about drinking beer; it’s all about delivering a richer and deeper Carlsberg experience. Now, driven by new technologies and the need to create a clear point of differentiation, even the most conservative global business brands are starting to focus beyond traditional sales techniques to

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compete on the basis of providing a customer experience. Dropping by the sales outlet of Harley Davidson in the centre of Bangalore is a full-on attack on your senses. It doesn’t look or feel like a sales showroom, but more like a lifestyle adventure theme park. Harleys are parked on the ground floor with a shop on the second, and the service department is on the top floor, accessed via an external lift that hoists the bikes up to the third floor in a highly theatrical fashion. Surely, we wouldn’t expect any less from Harley Davidson? But what’s interesting is the lengths to which other businesses, that don’t necessarily have a flamboyant brand and past history, are now going to in order to bring their products to life. Away from the eyes of everyday

people, in the glass-towered HQs of many technology companies, you will discover immersive customer experience centres. They represent the epicentre of the sales journey – a place where the company’s vision, product features and human benefits are brought to life in a truly engaging and impressive manner. More often, they have been constructed to provide a comprehensive and tightly coordinated brand voyage – using some of the most advanced technologies to illuminate a series of compelling stories, statistics and customer endorsements. But, is the investment worthwhile? From our perspective as a communications and experience agency, we don’t necessarily have the data to justify a response. What we do know is the following:

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LAURENCE CRONEEN FOUNDING DIRECTOR Since 2009, Deeper Blue has been at the forefront of helping brands change and adapt to a very different business landscape. We design and deliver live experiences, digital media and culture change programmes that inspire individuals, motivate teams and help brands grow.

Immersive experiences

We are receiving more invitations from companies to help them consider the benefits of a ‘customer experience centre’ than anything else. The Indian psyche is developed to embrace experiences – however important your job title, who doesn’t enjoy an expressive experience rather than another boring slideshow? Remember, the more immersive the experience, the more likely you are to release insight, details and data from a customer that can truly make the difference in terms of a meaningful sale. Entertainment and brand experiences used to be words banished from the boardroom. Today, they are enthusiastically discussed and debated. When used properly, they can help forge relationships, generate tangible business opportunities and bring your brand to life in a unique way that truly engages the heart as well as the head.

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PRACTICAL ADVICE ODGERS BERNDTSON

EFFECTIVE RESPONSES TO INDIAN OPPORTUNITIES

The success of Prime Minister Modi’s visit to London has brought the Indian market literally to our front door. The rally at Wembley where he ‘met’ 60,000 members of the Indian diaspora made him appear like a global pop star, and this image has reinforced the general opinion that India is ripe for investment under this new dynamic leader. Alasdair Spink, MD of Odgers Berndtson, has seen a sea change since his arrival in India in 2011. “COME INTO THE His company MARKET WITH A VERY focuses their LONG HORIZON AND executive search on MAKE SURE WHEN multinationals, and YOU HIRE YOUR he is head of their CONTRIBUTION, DO industrial market NOT COMPROMISE sector in India. As ON ANYTHING.” such, he is in tune with the new wave sweeping across the country and is positive about the impact for British SMEs that are looking to invest. “India is not yet firing but it will start when it takes its place in the global supply chain like China,” he says. “It has the massive population that would suggest there is a large captive

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consumer demand with a relatively low cost of labour. This means in the global supply chain it has a significant role to play if it can get itself organised with aspects such as infrastructure. The opportunity is there and, although it’s not coming about as quickly as was the case in China, it will happen over time. “India is growing faster than China’s correcting economy and in terms of business growth there are pockets of incredible growth which are causing immense excitement such as the automotive sector. The Indian government reworked their calculation for GDP growth and although current estimates place growth at 7.5%, it’s probably nearer to 5.7% by the old calculation. Consumer spending is driving the economy and so the government has given the public sector a pay rise. “Additionally the phenomenon of major companies positioning their back offices in India continues to intensify. We’re currently doing some work with one of the US’ largest investments banks that has a campus in Bangalore and on that campus they will employ more people than they do in the UK and the US. Most of the

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EVERY COMPANY SHOULD BE LOOKING AT INDIA, BUT WITH A VERY LONG HORIZON, SAYS ALASDAIR SPINK MANAGING DIRECTOR OF ODGERS BERNDTSON

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major multinationals in financial services, retail, and communications have their back offices in India which they continue to grow. Engineering, automotive and aerospace companies that are high engineering are now basing their R&D and engineering back offices in India as well. These are significant opportunity areas and this is where we’re seeing a lot of employment.”

Left: Marks & Spencers, Bandra Below: Twinings

SME opportunities

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For SMEs looking to enter the market, preparation is the key according to Alasdair. “I have spent five years creating networks here and getting to know the market and I always try and inject a fair amount of caution to people. I’ve seen so many companies come here, ‘bet against the house’, lose and then leave. We should be more circumspect when advising companies

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ALASDAIR SPINK MANAGING DIRECTOR Alasdair Spink is Managing Director of Odgers Berndtson India and is based in New Delhi. With over 15 years of experience in executive search, he focuses on C level search mandates and has extensive experience of leading International, Board, Finance, Human Resources and General Management searches across sectors and territories. He joined Odgers Berndtson in 2005 in the London office. In 2010 he relocated to Dubai to lead the Middle East business, covering the entire region, before moving to Delhi in 2011 to lead the India business. Alasdair’s search career began in 1997 with another leading search firm where he gained experience in the UK, Netherlands and Germany.

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because only then will they take a more cautious route and the amount of companies failing and then leaving will reduce.” There are pockets of success among the major companies, such as Costa coffee, Twinings and Marks & Spencer. Multi brand retailers such as Tescos and Waitrose cannot have a majority stake in India, with 49% the largest possible stake level. This is why so few “INDIA IS GROWING enter the market, FASTER THAN CHINA’S CORRECTING ECONOMY but this leaves a gap for single AND IN TERMS OF brand companies BUSINESS GROWTH or for smaller THERE ARE POCKETS OF independents. INCREDIBLE GROWTH “Do your due WHICH ARE CAUSING diligence and look IMMENSE EXCITEMENT at the competition SUCH AS THE very carefully,” says AUTOMOTIVE SECTOR.” Alasdair. “Don’t assume the Indian competition isn’t good because it is. They can probably beat you on price and they will know the market better than you. Come into the market with a very long horizon and make sure when you hire your contribution that you do not compromise Don’t say ‘this is India and their communication might be less good and they haven’t worked for multinational companies.’ If you don’t get the leadership right, then you will never win. These people must be cast iron. Work harder to recruit your leadership than in any other part of your business.”

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Current challenges

In the World Bank’s Ease of Doing Business, India has slipped in the last decade, currently 142 out of 189. Much of this is down to cultural and bureaucratic factors, according to Alasdair. “Overwhelmingly people believe Mr Modi is the right man for the job and he is the best leader India has had for decades. But through no fault of his own he has been blocked from passing meaningful legislation that will help India move forward. “Generally, foreign businesses hoping to operate within India require three broad legislative changes before they can meaningfully engage with the market. These include land acquisition legislation to ensure land needed for manufacturing will not be taken from businesses, correct labour legislation to abate fears that businesses will never be able to downsize where necessary alongside the implementation of a single tax system among the 29 states that make up the country.” Alasdair remains hopeful but cautious. “Almost all companies should end up in India but they need to perform very careful and intricate due diligence procedures to establish whether this is the right time to engage with the country.” In simpler terms, an objective assessment of tangible opportunity and risk is absolutely critical to ensuring initial and continued success within the Indian market.