Irish seek slice of dynamic Indian market

The Thirteenth Floor, a fancy lounge bar in downtown Bangalore, is probably as good a place as any to take the temperature of…

The Thirteenth Floor, a fancy lounge bar in downtown Bangalore, is probably as good a place as any to take the temperature of the Indian economy. Perched (you've guessed it) 13 floors up in a city that is as low-rise as Dublin, the bar offers a useful physical perspective on the sheer scale of this city, the most westernised in the Indian sub-continent.

Bangalore is home to 7.2 million people, a number that is hard for Irish people to digest, particularly when it is placed beside the 13.8 million who live in Delhi, the 17 million in Mumbai and the 1.1 billion who live in India as a whole.

While uninformed observers in the West might like to think of Bangalore as little more than a call centre capital, the clientele in the city's fashionable nightspots know different and they are unafraid to show it by dressing in expensive western branded clothes and sporting the latest haircuts. They are a new kind of Indian, a generation that knows it can deliver a lot more than mortgage helpdesks or telephone computer service to the world, regardless of how important this sector might currently be.

The potential of the Indian economy to play with the big boys is well-documented, with the country boasting the third largest GDP in Asia after Japan and China, as well as having one-sixth of the world's population.

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Government policies have helped this along, with reforms put in place in 1991 essentially opening large parts of a previously-closed economy to the world of international commerce. The challenge now is to manage this progression and deliver to India's people the global presence and importance they feel their country deserves.

While call centres might be Bangalore's bread and butter, it is companies such as IT group, Wipro, and biotechnology firm, Biocon, that represent the long-term potential of India as a whole. In a nation where 80 per cent of the economy is still concentrated in agriculture, there is a strangeness attached to a tour around Wipro's ultra-modern campus just outside Bangalore, with its lakes, swans, parks and architect-designed buildings. This is Citywest multiplied by 100, with Wipro - which last year boasted revenues of about €1.5 billion and profits of around €300 million - looking more towards Silicon Valley than the Naas Dual Carriageway.

From the perspective of this week's trade mission, the opportunities in companies such as Wipro lie in attracting some of their foreign investment to the Republic. This was certainly in the mind of the Taoiseach, Bertie Ahern, and the Minister for Enterprise, Trade and Employment, Micheál Martin, on a visit to the group on Tuesday. The Indian company's executives carefully took notes.

The more central goal of the trade mission is not to attract Indian companies to Ireland, however, but to help Irish companies to do business in India, tapping into the wealth of the 200 million-plus Indians in the middle- or upper-income brackets along the way. For some of the 90 organisations on the trip, this is still very much a "toe in the water" exercise.

Take Donal Dunne of Dunreidy Engineering in Kilkenny for example: he is here to get a sense of how his company's successful steel containment systems for the pharmaceutical and biotech industries might fit into Indian industry. He is not expecting to do deals but is happy to take a view on the business world and maybe act on that on his return home.

For others, the stage of Indian development is more advanced. ERS, a Dublin IT services firm, has had a presence in Bangalore for the past four years. Oddly, however, this week saw the first visit of ERS owner and managing director, Colm Stafford, to the Indian operation. He laughs as he admits that most of the communication between the two offices takes place over MSN Messenger, which until now has been quite sufficient.

ERS got involved in India first in 1998, after being approached by a Chennai-based firm looking to do outsourcing business with Irish companies. In 2002, Stafford arranged with one of the Indian programmers to help him establish an ERS in India as a standalone company.

The Indian company, which has Stafford as a director. By structuring it this way, he avoided much of the protective Indian bureaucracy that has given business in the country such a bad name.

While some Irish companies are in India to tap into the top-class technical expertise that has developed in the country, others want to take advantage of the by-product of that - the growing wealth. It would be a mistake to say all of Indian's 1.1 billion people are potential consumers of western goods (GDP per capita is about €2,500 compared to about €26,400 in the Republic) but the scale of the country means winning even a small portion of this is a big prize.

Three whiskey producers on the trip realise this, and are lobbying hard for the Indian government to relax the prohibitive tariffs levied on imported product, with other organisations such as Bord Bia and the Irish Film Board also aware of the market opportunity.

It is not just big companies that can win a share of the Indian consumer space, however, with small organisations such as Dublin's Marco Beverage Systems also seeking a piece of the action.

Marco, which makes water boilers and coffee brewers for the tea and coffee trade, already uses an Indian company to manufacture the bulk of its products and now wants to use the same company to act as its selling agent in the Indian economy.

Whether Irish companies are buying or selling the message from India is that is is now "a player" on the global trade stage.

Úna McCaffrey

Úna McCaffrey

Úna McCaffrey is an Assistant Business Editor at The Irish Times