UNITED STATES DEPARTMENT OF COMMERCE

UNITED STATES COMMERCIAL SERVICE

INTERVIEW WITH

AILEEN NANDI,

PRINCIPAL COMMERCIAL OFFICER,

U.S. COMMERCIAL SERVICE, CHENNAI, INDIA

BY

DOUG BARRY,

DIRECTOR OF MARKETING,

U.S. COMMERCIAL SERVICE

Transcript by

Federal News Service

Washington, D.C.

(Music.)

DOUG BARRY: Hello and welcome to the U.S. Commercial Service Market Brief. I’m Doug Barry in Washington. Today we are talking to Aileen Crowe Nandi, who is the principal commercial service officer in Chennai, India. And just to set the scene, Aileen, I’m picturing the big Indian subcontinent landmass and as it tapers towards the bottom, you are there somewhere, I’m imagining with palm fronds nearby and you’re probably dripping perspiration, true?

AILEEN CROWE NANDI: Pretty much true. Summer’s been in effect for about a month now.

MR. BARRY: And it’s hot? How hot?

MS. NANDI: Very hot, it’s in the mid to high 90s.

MR. BARRY: Wow, and what I’d like to know, and I’m sure our listeners would, what in general are the opportunities for U.S. businesses in South India?

MS. NANDI: By South India we refer to the Hyderabad, Bangalore, Chennai regions. Hyderabad’s in the middle of the country and that’s basically south; downward is the South India region. South India comprises a wide range of industries; everything from automobiles to automotive components, textiles, IT, of course, leather, chemicals, financial services, food processing, biotechnology, engineering, aerospace components, pharmaceuticals and maneuver energy.

That’s just a partial list of industries, of course, and we really work a wide gamut of industries and sectors to help U.S. companies down here.

MR. BARRY: Yes, and can you give us an idea of who you’ve seen lately from the United States? What kinds of businesses are knocking on your door?

MS. NANDI: Right now we’re working with a number of machinery and automotive companies, but every day in South India is really different in terms of companies that are coming to us. We see a really wide range of industries and the number one thing – and this holds true for all of India – when determining whether there’s a market for a product or service is price; whether a U.S. product or service can compete in India on the basis of price.

MR. BARRY: To put it another way, why leap over Delhi and Mumbai and go directly to the South?

MS. NANDI: Well, it really depends on the industry. And I should point out that India has four distinct reasons: north, south, east and west. And each region is vastly different from the other, very different cultures, languages of course and industry sectors. So in some cases if the company has a niche product or service then it might make sense to have an all-India strategy; if it has more common applicability then we’d recommend a regional approach.

Many U.S. companies, especially when coming to India for the first time, do choose to go to Delhi and Mumbai, that’s the capital and the financial capital of the country. But in certain industries it does make sense to come straight down to the South. Chennai, for example, has a lot of manufacturing and a lot of automotive factories, so anything related to machine tools, automotive components, Chennai is also big in textiles, so companies in these industries would probably come straight to Chennai and bypass Delhi and Mumbai.

MR. BARRY: Now, what’s the standard of living down there in the South and the size of the middle class and the infrastructure for doing business?

MS. NANDI: Well, infrastructure is a challenge all throughout India but I served two years in Calcutta and the infrastructure here is much better across the board. The middle class, I don’t have any facts and figures, but the middle class is fairly sizable down here in Chennai and the quality of living is, by Indian standards, very high. You don’t have the same amount of pollution and traffic that you do in the other cities.

MR. BARRY: For those folks in the audience, we’re talking to Aileen Crowe Nandi, the commercial officer in Chennai, India. And it’s now late March here and there and we’re now in the midst of a major global downturn, first year that trade has fallen since the 1980s. Presumably, India is being affected by this as well. To what extent, Aileen, has the economic downturn affected business and, of course, desire to import goods from the United States and elsewhere in South India?

MS. NANDI: Well, this really remains to be seen. The economic downturn has not impacted India in quite the same way as in the United States and the rest of the world. U.S.- Indo trade went from about $17.6 billion in 2007 to around $18.6 billion in 2008. So there was an increase during that time. And most companies down here are still hiring although not in the quantities that they were before. So we don’t see the dramatic layoffs that we do in the rest of the world. However, I am seeing major companies down here becoming a little bit more conservative in terms of large purchases.

We are working with one company to, they wanted to buy a doughnut maker from the United States and we had some trade leads and, you know, there was some encouraging discussions. But this company, a very large company, decided to put the brakes on that purchase just because it was a big capital expense and they’re going to do it later. We’re very hopeful that they will do it later, but we’re seeing more and more of companies deciding to delay or postpone purchases of great magnitudes.

MR. BARRY: Now, is that a cautionary tale for U.S. companies wanting to do business there? Should they ride out this economic storm before jumping in or what would be your advice?

MS. NANDI: It depends on the industry, but India is still growing; the government expects it to grow 7 percent this year. Most people think that’s optimistic; they think it’ll be closer to 5 percent. But the point is the Indian market is still growing whereas in the rest of the world, it seems to be shrinking. If U.S. companies do not come here now, they’re really missing opportunities because their competitors, especially foreign competitors, are very busy pursuing opportunities.

So I would recommend in most sectors that U.S. companies should come position themselves. You know, Indian companies are still buying things; business does go on and we would be happy to work with individual companies to assess the strategy and decide whether now or later would be the best time to come.

MR. BARRY: Right, and the news today is that some leading economists in this country are saying that turn-around in the United States will be 2010 and when the turnaround comes it may be surprisingly robust and certainly the rest of the world will follow.

And your point about looking at India as a place where economic growth is still in the single digits where everyone else seems to be in negative territory, I think is a good one and also just because that company did not buy the doughnut machine today or yesterday, doesn’t mean they won’t buy it a little bit later when things turn around. And the idea that a doughnut maker in the United States can come close to selling their product in a land which is known for its curries and chipatis is actually a fairly promising sign, don’t you think?

MS. NANDI: Exactly, exactly.

MR. BARRY: What about the business culture there? You did talk about the ethnic diversity in India, the multiplicity of languages. If there’s a rule of thumb for Americans about doing business there and developing good relationships with the Indians, what would you suggest it be?

MS. NANDI: Well, I should mention, for every rule of thumb, there are 10 rules to the contrary. It’s such a big – it’s such an enormously vast country. But I would say in general, presence is very important, meaning that you have to hop on a plane and come to India and meet people face to face.

This is a country where personal contacts are of vital importance and we’re seeing among U.S. companies that they’re switching match-making in-country to trying to get partner lists and trying to do things via video conference or e-mail. And that’s simply not as effective as coming here and meeting people first-hand.

So coming here is of vital importance. I would also say, this market, although it has tremendous opportunity, really requires a lot of patience. It takes longer to sign deals. A lot of Indian companies don’t necessarily do the same level of due diligence that we do. A lot of business deals are done on the basis of trust, so that’s why they need to come here and get to know you and develop that higher level of trust before doing business with you.

MR. BARRY: Yes, and we Americans are not known for our patience when doing business, but one consequence of this economic downturn might be learning to be more patient the hard way.

MS. NANDI: Correct, correct.

MR. BARRY: All right, any parting thoughts, Aileen, as we’re almost out of time?

MS. NANDI: Sure, I would just say, India has a growing middle class, a very young population and out of 1.2 billion people the exact size of the middle class is debatable. But there are customers here to buy products from the United States and I’d just like to reiterate that U.S. companies really cannot afford to ignore the India market that is growing right now and has tremendous opportunities in the short, medium and long term for U.S. companies.

MR. BARRY: Right and India is largely English speaking, you can get around very well speaking English, and the legal system is one that Americans would probably recognize, or at least some part of it.

MS. NANDI: Correct, correct, and they’re very Anglo-Saxon in their outlook, having had the British colonial heritage, so a lot of people compare India to China and those who do business in China find it much easier to do business in India for these reasons.

MR. BARRY: Great, well, we really appreciate your being with us today and you can go back to fanning yourself now.

MS. NANDI: Okay. (Chuckles.)

MR. BARRY: Stay cool.

MS. NANDI: Okay, thank you, it was great talking to you.

MR. BARRY: Great and we encourage our listeners to contact Aileen Crowe Nandi at her post there in Chennai, India. You can do so through the Internet and our Web site is export.gov and you can always call 1-800-USATRADE. That’s toll free here in Washington and we’ll put you in contact with Aileen as well. So again thanks for being with us, thanks to Aileen, and we appreciate you being with us today and hope to see you again on another Commercial Service Market Brief. Goodbye for now.

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