In­dia of­fers one of the fastest grow­ing emerg­ing economies in the world. Nor­we­gian busi­nesses look at the sen­ti­ments.

A mile­stone re­port re­veals emerg­ing op­por­tu­ni­ties and the sen­ti­ment of Nor­we­gian busi­nesses op­er­at­ing in In­dia.

Norway-Asia Business Review - - Contents - HENRI VIIRALT PHOTO: NOR­WE­GIAN BUSI­NESS AS­SO­CI­A­TION (IN­DIA)

In­dia has a lot go­ing for it right now. Ac­cord­ing to var­i­ous re­ports by the IMF and the World Bank, it is con­sid­ered as one of the fastest grow­ing emerg­ing economies in the world to­day, with an­nual GDP growth con­sis­tently hov­er­ing above 7%.

The In­dian gov­ern­ment, which is con­sid­ered strongly pro-busi­ness, has recog­nised that there is enor­mous for­eign in­ter­est in the coun­try, and has launched sev­eral pol­icy changes and ini­tia­tives in re­cent years in ed­u­ca­tion, digi­ti­sa­tion, in­fras­truc­ture, health­care among oth­ers, in or­der cap­i­talise on the global cu­rios­ity and to at­tract fur­ther in­vest­ment.

Nor­way, al­ready has more than 100 com­pa­nies ac­tively do­ing busi­ness in In­dia, around 65-70% of which are in the mar­itime sec­tor. Team Nor­way re­cently pub­lished the first Busi­ness Cli­mate Sur­vey 2016: Nor­we­gian Busi­nesses in In­dia, in an or­ches­trated ef­fort be­tween the Royal Nor­we­gian Con­sulate Gen­eral in Mum­bai, In­no­va­tion Nor­way - the Com­mer­cial Sec­tion of the Royal Nor­we­gian Em­bassy in In­dia, the Nor­we­gian Busi­ness As­so­ci­a­tion of In­dia (NBAI) with the sup­port of var­i­ous Nor­we­gian or­gan­i­sa­tions.

“It was a com­plete Team Nor­way ac­tiv­ity. What makes this re­port unique, is that it cap­tures the sen­ti­ment of Nor­we­gian com­pa­nies with op­er­a­tions in In­dia, and we want to use it as a plat­form to at­tract more Nor­we­gian com­pa­nies to come here,” says Tor­b­jørn Holthe, Con­sul Gen­eral of Nor­way in Mum­bai. “For the first edi­tion of the an­nual re­port, we nat­u­rally fo­cused on the mar­itime sec­tor, as both coun­tries have a long and rich mar­itime her­itage, which has in­flu­enced both so­ci­eties in a sig­nif­i­cant

way. Not only did the trade and busi­ness re­la­tions be­tween Nor­way and In­dia start with ship build­ing and the mar­itime sec­tor as a whole, but it re­mains one of the main sec­tors for co­op­er­a­tion to this day.”

The re­port gath­ered and an­a­lysed in­ter­views from 83% of Nor­we­gian com­pa­nies in In­dia, from in­dus­tries in­clud­ing mar­itime, oil & gas, ICT, en­ergy, con­sult­ing and biotech among oth­ers.

“The foun­da­tion for this re­port was the re­al­i­sa­tion that Nor­we­gian com­pa­nies want to have more clar­ity in terms of op­por­tu­ni­ties here, both in the short term and the long run. So we started map­ping out the key ar­eas where we could work to­gether, along with the ex­pected time­line. For ex­am­ple, there may be 8-10 re­ally at­trac­tive ar­eas, but not all of them are able to gen­er­ate busi­ness in the near fu­ture, some may take longer while oth­ers can re­ally be low hang­ing fruit” says Pankaj Patil, Mar­ket Ad­vi­sor at In­no­va­tion Nor­way in In­dia.

Aside from the mar­itime sec­tor, the re­port iden­ti­fied sev­eral im­por­tant ar­eas like oil and gas, fish­eries and aqua­cul­ture, but ac­cord­ing to Helge Tryti, Di­rec­tor of In­no­va­tion Nor­way in In­dia, there has been a strate­gic shift in re­cent years to­ward emerg­ing sec­tors such as re­new­ables, green tech and ICT.

“In­dia needs to com­ply with the Paris Agree­ment and the mit­i­ga­tion of green­house gases emis­sions is a priority, but with a mas­sive pop­u­la­tion, it’s dif­fi­cult to com­pletely shift from coal and petro­chem­i­cals to green tech. The gov­ern­ment has gen­er­ally ac­cepted LNG as the fuel of the fu­ture, so In­dia is try­ing to at­tract for­eign in­vest­ment and ex­per­tise in this area. When it comes to power gen­er­a­tion, coal con­tin­ues to be the most im­por­tant source, but In­dia has set an am­bi­tious tar­get of in­creas­ing its so­lar- and hy­dropower ca­pac­ity, and has re­cently adopted an off­shore wind pol­icy. Nor­way has a lot of ex­per­tise in all of these ar­eas,” says Mr Tryti.

Per­haps In­dia’s most am­bi­tious project to­ward sus­tain­abil­ity and green tech is the Smart Cities Mis­sion, a gov­ern­ment-led ur­ban re­newal and retrofitting pro­gram, with the ob­jec­tive to de­velop 109 cities all over the coun­try dur­ing the next decade, mak­ing them ci­ti­zen friendly and self-sus­tained.

Aside from the op­ti­mism, the sur­vey re­port also iden­ti­fied sev­eral chal­lenges to do­ing busi­ness in In­dia.

“The ease of do­ing busi­ness in In­dia ranks very low not only glob­ally, but even among other Asian peers, such as Korea, Ja­pan, Sin­ga­pore, Malaysia and Thai­land. More­over, Nor­we­gian com­pa­nies usu­ally have a very flat or­gan­i­sa­tion struc­ture, whereas in In­dia we have extreme hi­er­ar­chies, which means that de­ci­sion mak­ing is of­ten­times de­layed and there’s a lot of bu­reau­cracy in­volved, which in turn can be­come rife with cor­rup­tion. This is not only the ex­pe­ri­ence for Nor­we­gian com­pa­nies, but all for­eign com­pa­nies in In­dia,” says Mr Patil.

Part of the re­port’s goals was to iden­tify all these ar­eas of con­cern and present them to the gov­ern­ment. The prime min­is­ter’s of­fice is di­rectly mon­i­tor­ing the ease of do­ing busi­ness in In­dia in or­der to im­prove the rank­ing.

“It’s def­i­nitely a high priority as we can see that they are chang­ing pro­ce­dures

and reg­u­la­tions to re­duce and digi­tise the pa­per­work. There is this op­ti­mism that if in the com­ing years we won’t see very dras­tic mea­sures taken then at the very least some con­crete steps be­ing taken to­ward it.”

As of now, the gov­ern­ment is in­cen­tivis­ing launch­ing start-ups and it can take 3-4 months to es­tab­lish an en­tity and start do­ing busi­ness. For larger en­ti­ties, how­ever, it is a dif­fer­ent sce­nario, depend­ing on whether they want to set up a sub­sidiary or a joint ven­ture with an In­dian coun­ter­part, the process can take longer. For Nor­we­gian en­ti­ties, Mr Patil says the pre­ferred method is usu­ally to ap­point a lo­cal agent, who rep­re­sents the com­pany’s in­ter­est on the ground and gains lo­cal ex­pe­ri­ence. This gives them con­fi­dence about busi­ness op­por­tu­ni­ties in the coun­try be­fore de­cid­ing on a long­time strat­egy.

For the 2017 edi­tion of the re­port, the plan is to in­crease the scope to cover other sec­tors that will be vi­tal to In­dia’s devel­op­ment, such as in­fras­truc­ture, green tech and re­new­ables, while re­main­ing rel­e­vant to the mar­itime and oil & gas in­dus­try.

Based on this re­port, specif­i­cally with mar­itime sec­tor fo­cus, the mes­sage is very clear – Nor­we­gian com­pa­nies need to change their strat­egy when it comes to In­dia. It has tra­di­tion­ally been an equip­ment and ser­vice provider, they need to look at cap­tur­ing the en­tire value chain, from ship de­sign to ship build­ing to emerg­ing ar­eas like Shal­low draft ves­sels for coastal ship­ping & in­land wa­ter­ways, small scale dis­tri­bu­tion of LNG etc.

There is need to shift from com­mer­cial ship build­ing, which is go­ing through tur­bu­lence glob­ally, to de­fence ship build­ing, as there is a strong fo­cus by the In­dian gov­ern­ment on mod­ernising and up­grad­ing the In­dian Navy & Coast guard.

In terms of ge­og­ra­phy too, there has been a shift, where more and more emerg­ing op­por­tu­ni­ties are on the east coast of In­dia, while most of Nor­we­gian ship­ping com­pa­nies have his­tor­i­cally been mostly fo­cused on the west coast.

“Po­ten­tially one of the most sig­nif­i­cant ar­eas for fu­ture mar­itime col­lab­o­ra­tion where Nor­way could lever­age its ex­per­tise is Ocean Space, which is a holis­tic way of re­search­ing and util­is­ing all the re­sources abun­dant in the oceans. It could be the so­lu­tion to what In­dia is aim­ing to do with Sa­gar­mala Project, a strate­gic ini­tia­tive to mod­ernise the ports & ship­yards that would di­rectly con­trib­ute to In­dia’s over­all eco­nomic growth and sus­tain­able so­cial devel­op­ment.”

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