UKIBC Business exchange final low res

Politics in IndiaMartin Sorrellsets the scene

The new BangaloreBenoy buildingfor the future

Diageo sales boomSpirits goingdown a treat

Issue 05 www.ukibc.com

Contents

The UK India Business Council is a business-led organisation promoting business links between the two countries. Our mission is to facilitate an increase in trade through business-to-business dialogue. We inform UK Plc of the opportunities in India and, more importantly, how they can capture them.

Through our partnership with UKTI, and with an extensive network of influential corporate members, we provide the resource, knowledge and infrastructure support vital for UK companies to capitalise on the opportunities in India. For more information please see www.ukibc.com

MIssIon sTaTeMenT

15 UKIBC events

16 success stories

17 The aoC journey

19 advice from HsBC

20 Insight from PwC

21 Commitment is the secret

22 Wakefield to Bangalore

24 Buildings of the future

26 spirits in demand

28 Watching omega

29 Business opportunities

UKIBC Business Exchange is the UK India Business Council’s flagship publication, which highlights business opportunities between both countries, predicts trends, profiles success stories, offers tips and practical advice, and carries in-depth interviews and analysis with business leaders and policy makers.

Published each quarter, the magazine is aimed at business people interested in bilateral trade opportunities between India and the UK.

Editor: Ishara Bhasi Callan Lead Features Writer: Ian Halstead Editorial Coordinator: adam Pollard Advertising: stuart Walters & sam skiller Production: open Box (ob-mc.co.uk)

For magazine enquiries please contact [email protected]

BUsIness exCHange

Contact Details:

UK India Business Council HEAD OFFICE 12th Floor, Millbank Tower 21-24 Millbank London SW1P 4QP United Kingdom

t: +44 (0) 207 592 3040 e: [email protected] w: www.ukibc.com

Advertising enquiries:

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02 CEO’s foreword

03 PM embraces India

04 Business news

05 Man on a mission

06 economic overview

07 Karnataka fact-sheet

08 India’s sillicon Valley

09 The Biocon story

10 The beauty of Karataka

12 Qx show the way

13 Business Centres

14 UK news round-up

ConTenTs

Bagmane Tech Park Bangalore

Front cover image: The ancient ruins of Hampi

UKIBC Business Centre 7th Floor, Tower B, Infinity TowersGuragon, Haryana

t: +91- 1244537800

01

Foreword

WelCoMe

In partnership with:

Dear Reader,

First and foremost, I wish you a prosperous 2014.

In India, last year ended with a major new political force emerging, disturbing the two main political parties’ calculations going into the Union General Election of April/May 2014.

In fact, the success of the AAP in the Delhi elections, and their decision to fight the Lokh Sabha elections has blunted the momentum being built by Narendra Modi and the BJP, making the political situation much more complicated.

Indeed, with 30-40 seats it is conceivable that Mr Kejriwal, the leader of the AAP, could become Prime Minister in a ‘third front’ coalition. Unlikely but not inconceivable.

Nonetheless, what it undoubtedly means is that both the BJP and Congress have to re-tailor their messages to counter this new appeal.

Against a background of rising bilateral trade figures between UK and India, the UKIBC in 2014 will reinforce its position as the leading business led UK-India trade organisation; rolling out our policy debates and advocacy activities in India, and giving voice to UK businesses across the country.

With the support of UKTI, we will also roll out two more UK India Business Centres; first in Bangalore, then in Mumbai.

These will build on the success of our Gurgaon Centre, where there is already a good mix of permanent and temporary clients with strong demand for our training space, office space and market-entry services.

In this issue, we continue our theme of focusing on India’s business friendly states. Karnataka, the capital of which is Bangalore, is famous as a centre for both innovation and IT - as well as soon the host of the second UK India Business Centre.

We have a great line up of articles offering insights into the state; a highlight being an interview with the prominent Bangalore-based industrialist, and member of the UKIBC Advisory Council, Kiran Mazumdar-Shaw, chairman and MD of one of Asia’s leading bio-tech companies, Biocon.

As a leading figure in global life sciences, Ms Mazumdar-Shaw identifies the opportunities and challenges in the Indian market and her words will resonate with UK companies looking at the sector.

We also have insight into India’s elections from Sir Martin Sorrell, the CEO of WPP, and case studies from UK companies making real headway in the Indian market, including Diageo, QX, Group Rhodes, Benoy, and Omega Diagnostics, providing inspiration, insights and useful advice about entering or expanding in the Indian market.

We carry too an informative analysis of India’s 2013 Companies Act by PwC.

I hope you find this edition of the magazine both insightful and useful.

Yours sincerely,

Richard Heald Chief Executive UKIBC

Bangalore HQ of Infosys

Richard Heald

02 Business exchangeIssue 05 www.ukibc.com

View from the Top

“I’ve come here more times as Prime Minister than I’ve been anywhere other than Belgium,” said David Cameron, “and I’ve no choice about doing so”.

This was the Prime Minister’s third visit to India, underlining his fervent commitment to deepening UK-India ties - especially trade ties.

He was accompanied by many key UK politicians and policy-makers; including the head of the No 10 Policy Unit Jo Johnson, Government Ministers Oliver Letwin and Greg Barker, and MP Nick Boles. He visited New Delhi and West Bengal.

During his visit, he said that the UK Government will support the UK India Business Council (UKIBC), working with the British Business Groups (BBGs), to open a third UK India Business Centre in Mumbai, the business capital of India, during the latter half of 2014.

As a result, British corporates in India and in the UK will have a seamless business-led trade support and service platform combined with a business orientated policy advocacy voice.

PM COmmITs TO InDIa

The combined reach of the three UKIBC hubs will cover those significant regions in India where the majority of commercial and economic activities lie. The UKIBC plans to build on this reach and network by opening three more centres across India by 2017.

This announcement is a clear sign of the UK Government’s strong commitment to India and to creating a business-led, business run pan-Indian network supporting UK companies, especially SMEs, to enter and prosper in the fast-growing Indian market.

On the announcement, Richard Heald, Group CEO, UKIBC said, “We welcome Prime Minister David Cameron’s continuing commitment to India and to the support of the UK India Business Council.”

“We can now fully represent and support UK businesses in India. The Centres will be pivotal to the strategy of all UK corporates engaging with India. The UKIBC can act as a voice on issues which matter to them, as well as provide a ‘home away from home’ for British businesses.”

“The accelerated roll-out programme underscores the success of the Prime Minister’s initiative and further reinforces the concept underlying the UK India Business Centres.”

David Cameron arrives with his delegation ... then goes on to meet the Indian Prime Minister, Manmohan Singh

03

What next?

ConTaCT:

To contact the UKIBC team in India, call +91 1148 344 810 or email [email protected]

Business news

CaBle LINKS UP AT JeTCo

In December 2013, the 9th round of Joint Economic Trade Committee (JETCO) discussions between the UK and India were held in New Delhi.

Led by Dr. Vince Cable, Secretary of State for Business Innovation and Skills, and Shri Anand Sharma, India’s Minister for Commerce and Industry the discussions focused the minds of government and business leaders from the UK and India on how to increase trade flows.

With an emphasis on Advanced Engineering, Skills and Education, and Innovative Technologies the JETCO discussions made tangible progress on a range of issues.

Notably, the Advanced Engineering discussions identified the need to use UK expertise in areas such as aerospace to develop a new centre of excellence in India. Established a commitment by both countries to establish a technology partnership focused exclusively on clean energy. And lastly decided to set up an Industry led forum to identify future trends where the two countries can work together on collaborative projects.

Turning to Skills and Education, the development of joint community colleges was proposed, as well as an exchange covering apprenticeship models, with the UK’s clear expertise in formalised vocational training sitting at the heart of future skills collaboration.

Understanding JeTCoEstablished in 2005 by the then British Trade Minister, and now UKIBC Chair, the Rt Hon Patricia Hewitt the UK and India’s Joint Economic and Trade Committee (JETCO) brings together Senior Ministers and Business Leaders from both countries every year to discuss the challenges and opportunities present in the two countries trade relationship.

This distinctive forum allows both sides to air issues of concern in an open and yet constructive environment. Uniquely, amongst Government to Government talks, the forum is able to achieve continuity by including not only senior British and Indian business leaders, but by ensuring the same companies have an opportunity to attend each year. This enables the discussions to remain constant and coherent even as the governments of the world’s oldest and its largest democracies change.

How to effectively allocate CSR funds to skills projects from the recently enacted Companies Act was high on the agenda, given its potential to both to benefit Indian society and at the same time improve the skills of India’s workforce.

With India’s economy rapidly developing in to new high tech areas, JETCO also included for only the second time discussions concentrating exclusively on innovation. Of particular interest to India was tapping into the UK experiences of primary and secondary healthcare, in order to help incorporate mobile technologies as a key foundation of India’s developing healthcare system.

Addressing India’s longstanding challenge of accessing affordable diagnostics, in particular developing low cost medical devices and designing sensors and screening methods usable in rural and remote areas, were identified as a clear priorities for UK and Indian corporates.

Addressing these challenges Dr Cable said: “Trade and investment is not just for big corporates, but for SMEs and we are establishing UK India Business Centres across India to help UK companies enter this market.

“I must also say that we are open and welcome to Indian students, there are 40,000 Indian students in the UK, but this number is falling and we need to combat this”.

Naina Lal Kidwai, who was president of the Federation of Indian

Chambers of Commerce & Industry at the time of the JETCO meeting,

with Dr Cable.

By adam Pollard


View from India

Sir Martin Sorrell’s giant WPP empire owns almost 50% of India’s media agencies. Ishara Callan ushers him into the political arena.

as we spoke in the hallowed halls of the Foreign & Commonwealth Office, under the gaze of Lord Nelson and the ‘Iron Duke’ Wellington, Sorrell claimed to know little of Indian politics.

However, he certainly warmed to the theme, after first looking at how WPP’s India operations contribute to his group’s global success.

They expanded significantly in 2013, as Sorrell’s companies took majority stakes in both Hyderabad’s digital agency PennyWise Solutions and the rural communications specialist RC&M, the latter its twelfth acquisition in nine years.

“Our strategy is simple. We look for new markets, new media, data investment management and last - but not least - ‘horizontality’,” he says.

For those outside the media industry, although ‘data investment’ is commonly used in India, it would be known as market research elsewhere.

Horizontality is the process by which Sorrell sees WPP embracing talent and resources from right across its operations to focus on clients and projects, and he’s especially bullish on India’s prospects via its new media activities.

“India has been a strength for us. I see the growing importance of digital and social media in both our commercial and personal lives,” he says.

“Given the growing number of people owning a handset, it is inevitable that social media will play a very important role there. Data investment management in India is also very big, and Indians are good at market research, which also makes India important for us.”

WPP expects revenues from India to be some GBP 305 million in the current financial year, and with its

in-country workforce now around 13,000 people, it’s set to be one of the group’s major drivers for years to come.

Moving on to politics, Sorrell draws parallels between the upcoming Indian elections and those in the United States, and stresses the importance of having a coherent and sophisticated communications strategy.

“Parties which have clear vision and messages will do better, and strategy is important at all levels - thinking, execution and use of all media,” he says.

“In India, campaigners need not only a strong strategy, but also a strong understanding of the demographics, and of the issues which each of those demographic subsets face.”

Of course, just as India is changing, so are its voters. The old India, dominated by the rural heartlands, is fast being replaced by urban India and powerful city-states.

As the economy grows, and lifestyles evolve, the needs and desires of Indian voters are far changed, even from what they were a decade ago.

Sorrell points at the new groups of ‘influencers’ which he believes politicians should focus on; the growing middle-class, the young who have been born in a liberalised India and are voting for the first time, women and urban Indians.

He thinks one party better understands youth and the middle-class, but discreetly declines to say which, although he does believe now is the time for all Indian politicians to really understand the issues which matter to people, such as the looming spectre of mass youth unemployment.

For the moment, the BJP seems to have gained an advantage in the polls, but Sorrell thinks it unlikely that either they or the ruling Congress Party will claim a working majority.

And what about Rahul Gandhi of the ruling Indian Congress Party, does he stand a chance? “Rahul Gandhi has big opportunities, provided he grabs it.” Sound advice.

SORRELL IS A Man on a MIssIon

Sir Martin Sorrell, CEO, WPP at

the UKIBC event at the FCO

“India has been a strength for us. I see the growing importance of digital and social media in both our commercial and personal lives”

05

state Fact sheet: Karnataka

Ian Felton, Britain’s Deputy High Commissioner in Bangalore, offers an overview of its merits as a destination for investment and commerce.

Karnataka’s capital of Bangalore is one of India’s future faces, and nowhere was its potential better seen than when Skyfall and Life of Pi wowed cinema audiences worldwide with their spectacular images.

Technicolor India and The Moving Picture Company created sophisticated CGI visuals at their Bangalore studios for those movies, working seamlessly across time-zones in the UK and United States during the production process.

The quality of the latter’s work was then further underlined when it received an Oscar statuette for its contribution to director Ang Lee’s inspiring tale.

Karnakata is urbanising rapidly, and with an educated workforce, backed by a state government determined to succeed, it consistently achieved annual GDP growth of around 6%.

It is a good market for traders, with a per capita income of $1,160 against the national average of just under $700, and aerospace, IT and life sciences are among the leading sectors which attract British companies.

Equally, Bangalore companies are outward-looking, and almost 11% of India’s investment in the UK comes from Karnataka.

Bangalore is regarded as India’s equivalent of Sillicon Valley, emphasising the importance of advanced technology to its economic growth and future and these companies too are ambitious for international growth.

Infosys, Wipro, Mindtree and Microlabs are probably the best-known Bangalore-based brands with a notable UK presence, but there are many more, and together they generate around 55% of the state’s GDP.

Innovative and ambitious UK companies regularly visit Bangalore - the www.webmission2013.com event proved particularly popular - to find both venture capital partners and co-developers.

Half of India’s life science companies are also in Bangalore, and there are tremendous opportunities in the state’s health sector; for trading and co-development in drug discovery and delivery.

The Bangalore business model is no longer about low-cost outsourcing. Most British corporates who comes to the state are involved in exciting joint ventures or collaboration using high-end skills and world-class levels of technical expertise.

A British Business Group was established there in 2013 and when the UKIBC Business Centre opens later this year, the British connections with Bangalore will be further strengthened.


WhO’s AlrEAdy ThErE

Top five UK companies in Karnataka :• BAE • Diageo • Pearson• Rolls-Royce • Tesco

Top five Indian companies in Karnataka:• Biocon • Infosys • TCS • Wipro • Hindustan Aeronautics

HoW To geT THeRe

British Airways > London Heathrow – BangaloreAir India > London Heathrow – Delhi – BangaloreJet Airways > London Heathrow – Delhi – Bangalore

Ports:Karnataka has good port infrastructure and is served by 11 ports including one of India’s major ports at Mangalore.

Road network:Karnataka has over 3,000 kilometres of railways and nearly 14,000 kilometres of state and federal highways.

URBan aReas

Bangalore is the state capital of Karnataka It is India’s third most populous city and is widely referred to as the Silicon Valley of India because of the number of software and IT companies operating in the city.

Hubli is the second fastest growing city in Karnataka after Bangalore. The city acts as a major connection point for the regions infrastructure and as a result the city’s economy if focused around logistics and to a lesser extent manufacturing.

Mysore has a rich history and culture and served as Karnataka’s capital until 1947. As a result the economy is dominated by the tourism Industry, but it is also Karnataka’s second major center of IT and software companies after Bangalore.

07

MYSORE

BANGALORE

MANGALORE

HUBBALLI-DHARWAD

GULBARGA

CHaMBeR oF CoMMeRCeFederation of Indian Chambers of Commerce and Industry (FICCI):FICCI-Karnataka State CouncilVITC Building, 1st Floor, Kasturba RoadBangalore - 560 001Phone: +91 80 22861949

Confederation of Indian Industry (CII):KarnatakaNo. 1086, 12th Main, HAL 2nd Stage,Indiranagar, Bengaluru-560008Karnataka, IndiaPhone: +91-80-25276544Fax: +91-80-25276709

ECONOMyshare of India’s GdP Fy 2012:5.49% source: VMW Analytics services, accessed 04.12.13,

GdP Fy 2012:UsD $85.97Bn source: VMW Analytics services, accessed 04.12.13,

Growth rate Fy 2012:13.97% - source: VMW Analytics services, accessed 04.12.13,

Source: http://unidow.com/india%20home%20eng/statewise_gdp.html

RegIsTeR WITH oVeRseas BUsIness RIsK:http://www.ukti.gov.uk/export/countries/asiapacific/southasia/india/overseasbusinessrisk.html

Consider registering with Overseas Business Risk if your business faces issues such as cyber risks, bribery and corruption. The Overseas Business Risk is brought together by UKTI and FCO to give you access to strategic information on the issues and risks related to business security in a wide selection of markets.

UseFUl soURCes oF InFoRMaTIonUseful Websites:www.karnataka.gov.in - Kanata State government website

www.incometaxindia.gov.in - Indian tax information

http://ipindia.nic.in/ - Intellectual property information

http://www.kiadb.in - Karnataka Industrial Areas Development Board

geneRalarea: 191 791 km2 - Slightly larger than both Syria and Cambodia (Source Government of India 2001 Census of India.)

Population:61,130,704 - Approximately the same population size as the UK (source Government of India 2011 Census of India.)

Urban Population:38.57% - India’s seventh-most urbanised state (source: Government of India 2011 Census of India)

Capital:Bangalore (Sometimes referred to as Bengaluru)

Monsoon season:Monsoon season: June – August

language:The official language is Kannada. Urdu, Tulu, Kodava and Konkani are also spoken, but the business language is english.

Digital Innovation

“From the beginning, the company was founded on the principle of building and implementing great ideas that drive progress for clients and enhance lives through enterprise solutions.”

Infosys’s Bangalore HQ

Ishara Callan examines the history of Bangalore’s globally-famed IT industry.

Home to the large and small IT companies - Wipro, Infosys, mindtree, saP- Bangalore, no wonder it is called the silicon Valley of India.

In fact, nearly 40 per cent of the country’s IT industry is concentrated in the city. The credit of building Bangalore into the Silicon Valley of India goes to dynamic entrepreneurs who chose to set up in Bangalore - given its good infrastructure and excellent institutions.

The trend started in the 1980s, when the likes of Narayan Murthy and Azim Premzi saw a potential for India to leapfrog from Agricultural revolution to an IT revolution.

Though India missed the Industrial revolution, it didn’t stop the young, dynamic entrepreneurs to explore the possibility of developing an IT industry which will serve the whole world.

On the news of his father’s death, 21-year-old Azim Premji returned home from Stanford University in the US, where he was studying engineering, to take charge of Wipro in 1967.

Wipro, which was then called Western Indian Vegetable Products dealt in hydrogenated oil manufacturing at the time, but Premji later diversified.

In the 1980s, the young entrepreneur, recognising the importance of the emerging IT field, took advantage of the vacuum left behind by the expulsion of IBM from India, changed the company name to Wipro and entered the high-technology sector by manufacturing minicomputers under technological collaboration with an American company, Sentine Computer Corporation. Today it is a multi-billion dollar company with a global foot print.

Also, in the 1980s seven engineers came together in Bangalore to start Infosys Limited - another giant of today in the IT space with just US$250.

From the beginning, the company was founded on the principle of building and implementing great ideas that drive progress for clients and enhance lives through enterprise solutions. Solutions they now provide for a global audience.

CONNECTIVITY THE KEYFOR BangaloRe

By 1983, both Infosys and Wipro, moved to Bangalore and the country’s fledgling IT industry started to grow around the two firms.

Today leading global firms including SAP, IBM and TCS have their offices in Bangalore. “Today if you take the top 10 IT services companies in the world, you’ll find four or five Indian companies,” Kris Gopalakrishnan, co-founder of Infosys has said.

One of the advantages that these companies had was that Indian educational institutions were offering good courses in computer engineering and the country was creating computer professionals on a par with the rest of the world.

NIITs and Aptechs also played a role in arming young Indian with computing knowledge. The industry now adds more than 200,000 jobs a year providing employment to nearly 10 million people. The sector accounts for almost £55bn worth of exports every year.

With more than 500 companies offering back-office and outsourcing services, the industry generates more than $17bn revenue a year. Thanks to talent and technology infrastructure, big MNCs and global research and development companies have also moved to Bangalore.

The German business software firm SAP set up their centre in Bangalore in 1998 when it decided to extend its “labs” beyond Europe and the US.

Today, there is a bit of Bangalore in every SAP product all over the world. Global multinationals such as Microsoft, IBM, Cisco, Oracle, Adobe. and Intel all have centres in Bangalore today.


View from the Top

Kiran Mazumdar-Shaw, the founding Chair and MD of India’s largest biotech business, muses with Ishara Callan on opportunities for UK firms in the healthcare sector.

It’s 35 years since Kiran established the fledgling Biocon - in the back of her garage - after a chance encounter with an Irish biotech entrepreneur made her abandon her intended career in the brewing industry.

She was just 25, and with no experience of corporate culture, but her understanding of the intricacies of the brewing process was soon being used to ferment enzymes, rather than beer.

Kiran has since developed the Bangalore-based business into a global brand, become India’s richest self-made woman along the way, and is now as well known for her philanthropy as biopharma innovations.

However, she remains fiercely driven in her desire to end the inequality of access, which has always handicapped India’s healthcare system.

“There isn’t a public healthcare system here - like the NHS - of course, so 80% of the expense of treatment has to be borne by the patients, which makes healthcare unaffordable to most,” says Kiran, with passion.

“Widespread poverty and a huge population only add gravity to this challenge, so affordable generic drugs and vaccines are imperative, and India has become the pharmacy of the world.”

“India’s competitive edge is provided by a low-cost base in research, clinical development and manufacturing, and it has become a preferred provider of outsourced research services, as well as contract manufacturing.”

THE WOMAN WHODaReD To DReaM

“Vaccines which are made in India immunize a third of the world’s children, just as one-in-three generic drugs is of Indian origin.”

”The need to invest in innovative R&D, and focus on creating affordable therapies, are of the utmost importance in a developing country such as India, as only a cost-effective high-volume business can be sustainable.”

”The UK, with its ecosystem of research institutes, innovative companies and a large pool of scientific talent and expertise, has become an important destination for high-end innovation and research.”

Kiran sees the UK creating opportunities for Indian companies, to forge new skills through collaborative research and drug development alliances.

“India’s strengths in drug development, and the UK’s strong record for innovation, can become key to addressing global medical needs which are not presently being met, through affordable medicine,” she says.

“India has great potential for UK companies, but they do need to be patient as regulatory clearances take time to come by. From Biocon’s perspective, innovation is integral to our philosophy and we invest more than 10% of our annual revenues in R&D.”

“We look forward greatly to strengthening our research collaborations with academia, and innovative pharma companies in the UK.”

What next? ConTaCT

Radhika PandeyLife Sciences and HealthcareSector ManagerUKIBC

T: +44 (0) 207 592 3842e: [email protected]

India has some 150 drug-manufacturing sites approved by the USA’s Food & Drug Administration, more than any country outside the US.

Kiran Mazumdar-Shaw

09

CUlTURe

Ian Halstead looks at a trio of very different leisure destinations in Karnataka.

It’s hard to believe for visitors, as you first glimpse this teeming city which sprawls way beyond the horizon. but some Bangaloreans remember when their beloved birthplace was no more than a sleepy hill-station.

Despite the frantic hubbub of modern Bangalore though, tranquility is still easily found in the public spaces which are the most visible legacy of its colonial past.

The 300 acres of Cubbon Park became a much-needed ‘green lung’ for the city in the 1860s, and the early 20th century saw many other gardens and tree-lined avenues created, via an enlightened civic strategy dubbed ‘serial blooming’.

Bangalore had earned fame as India’s greenest city much earlier though, after the Lal Bagh botanical gardens were conceived in 1760 by Hyder Ali, extended by his son, Tipu Sultan, and then added to until the end of the 19th century, by which time they had covered 240 acres.

The majestic greenhouse within those gardens, commissioned in 1899 to mark a visit by the Prince of Wales, was modelled on Britain’s famed Crystal Palace and remains one of the city’s most unusual structures.

Athough rapid urbanisation has replaced many of Bangalore’s traditional low-rise buildings and bungalows, Lal Bagh still provides an oasis of calm for residents and expats to walk, jog or just admire the remarkable array of trees, flowers and exotic plants.

Elsewhere in the city, there are spectacular sights aplenty and although each visitor will have their favourite, several really do deserve a visit.

Tipu Sultan’s summer palace is a delightful place to while away time, not just for its spectacular carved pillars, arches and balconies, but because it also

SOMETHING FOR ALLIN KaRnaTaKa

houses a museum with intriguing artefacts from the era when he and his father ruled Mysore.

If Tudor-influenced architecture is your preference, then Bangalore Palace is a must. Designed in the late 1880s, and inspired by Windsor Castle, there’s a definite sensation of walking through a spectacular film-set as you marvel at both the building and its interiors.

Bangalore’s government buildings also demand to be seen; notably the granite landmark which is the state legislature (Vidhana Soudha), and the eye-catching red sandstone of the state’s High Court (Attara Kacheri).

Of course, some will be looking for attractions of a different kind, and the city has museums, art galleries, temples and mosques in abundance, most easily viewed and reached via the double-decker buses which carefully navigate the centre.

However, the most popular attractions in TripAdvisor’s guide to Bangalore - based on hundreds of reviews by locals and tourists - are very different again.

Hampi

lal Bagh – the Botanical Gardens of Bangalore


Its ‘Top Three’ are Flight 4 Fantasy, which offers rides in sophisticated cockpit interiors, the Wonderla Amusement Park and most intriguing of all, an Israeli self-defence combat academy.

The latter would surely have been appreciated by Hyder Ali and Tipu Sultan; both known for their fighting skills and love of combat.

Elsewhere, a visit to the main railway terminus is a must - even if you’re driving.

Tucked away in an underground passage, between platforms five and six, is an art gallery created by Indian Railways, with paintings, posters and much more, all on the themes of travel and rail.

The same station also provides the most efficient way to reach Mysore; Karnataka’s cultural capital, rightly famed for its spectacular palaces and little more than 90 miles away by rail, with the Shatabdi Express offering the quickest and most reliable service.

Mysore was the capital for centuries, under the rule of the Wodeyars, and remains home to the state’s best-known and most popular cultural event, Dasara; nine days of celebrations which climax with a spectacular procession to mark the victory of good over evil.

Even if you can’t be there to marvel at the skill of the riders who coax their elephants through the thronging crowds, or to soak up the exuberant atmosphere, the city has much to offer year-round.

Its most notable sight is the palace which bears the city’s name, especially its five-storey tower which embraces design influences from Islam, India and Europe’s Gothic period, the latter reflecting the Victorians’ obsession with such architecture.

One of the colonial era’s most famous architects, Henry Irwin, was commissioned to create Mysore Palace, and the road connecting the bus station to its main railway terminus is still named in his honour.

A Scottish traveller and writer, William Murdoch, visited the palace during its construction in 1905, and considered it to rival the Temple of Solomon; through its varied use of materials, the skill of its craftsmen and the scale on which it was designed.

Such a thought might not come to contemporary travellers, but even in a land which made palace-building an art form, Mysore’s contribution really does deserve to be seen.

Of course, whilst many visitors will head from Bangalore to linger for several days and admire Mysore’s myriad charms at their leisure, others will prefer the surreal landscape of Hampi, around

220 miles from the capital, and very much on the backpackers’ bucket list.

Rough Guides and Lonely Planet may disagree on the merit of some locations, but they are in accord that this ruined city - sacked by the Deccan Muslim Confederacy in the 1560s – is a magical place well deserving of its UNESCO World Heritage Site status.

Its complex irrigation system has survived the centuries, allowing a patchwork of crops and harvests to flourish, as a network of hamlets has become established amid the crumbling temples and derelict buildings.

Many clearly find Hampi’s charms irresistible, thronging its crowded cafes and street bars, when not gazing at its spectacular sunsets, but anyone with time to spare, should give serious thought to spending at least a day or two there.

Where to stay

Vivanta by Taj - Whitefield, Bangalore

Standing at the main entrance to the International Tech Park, this hotel echoes the changing face of business in India. It offers comprehensive business facilities and a fitness centre, designed to create a memorable hotel experience.

Vivanta by Taj - WhitefieldITPB, WhitefieldBangalore - 560 066Karnataka IndiaTel: +91 80 6693 3333Fax: +91 80 6693 3344

Vivanta by Taj - Madikeri, Coorg

A haven of peace and tranquillity, it is designed to be at one with nature, and the resort is an extension of the surrounding rainforest. The eco-friendly hotel is a rare fusion of luxury and nature, showcasing the quintessential Coorg landscape; lush rainforest, rolling hills and undulating greens.

Vivanta by Taj - Madikeri1st Monnangeri, GalibeeduCoorgKarnataka - 571 201IndiaTel:+91 827 266 5800Fax: +91 827 2665801

11

Practical advice

When it comes to setting up in India, business services company QX knows first-hand the protocols, the practicalities and the pitfalls.

Dually-located in the North Yorkshire market town of Skipton, and Ahmedabad in India, the business offers a mix of outsourced back-office services.

Its most recent venture, QX Corporate Advisors - led by Anil Bhambhani - assists UK companies that aspire to set up in India.

Ten years ago, to establish QX in India, the company had to fight its way through a complicated and long-winded process … task by task.

However, it was a move that paid dividends as QX expanded from a recruitment business that placed locum doctors into NHS contracts, into accountancy and payroll when chairman Chris Robinson realised that the local talent pool of finance professionals was strong and highly motivated.

QX, which subsequently expanded into recruitment process outsourcing, software services and now corporate advice, now employs 320 people in Ahmedabad.

Its development director Pam Bickley admits that the practicalities of setting up in India - such as finding premises, employing people and registering a company for tax - can be intimidating for smaller companies, particularly if they lack the contacts to get them started.

“Initially, it was quite difficult, even though we had the enthusiasm to do it,” she recalls. “We were the pioneers, so there was no one there to guide us.”

Their choice of location turned out to be fortuitous. In India, industries tend to cluster. But instead of heading for Mumbai or Bangalore - cities much better known for outsourcing - QX fixed on Gujarat.

“We specifically chose Gujarat because of the low competition. We knew we would be able to retain

Qx LEARNS FROMPIONEERING DAYS

staff and a considerable number from those days are still with us,” says Bickley.

“The talent pool of accountants and financial professionals was good and no-one else was tapping into it. There was therefore less pressure on salaries, which brought its own benefits.”

Their experiences have put them a position to advise others, and to highlight that the practicalities are all-important.

QX Corporate Advisors’ recent involvement with a UK-based company wishing to establish a food processing plant in Delhi saw them take care of recruitment, payroll and accounts generation, in addition to general guidance.

Business sector sometimes dictates how companies establish themselves in India. Firms of architects or accountants, for instance, have to be owned and run by a qualified local architect or accountant. For a company coming in ‘cold’, such knowledge is invaluable.

The Indian accounting, tax and regulatory environments are also complex and bureaucratic. The welfare of local employees is protected by laws and regulations which cover pay and benefits, such as the Public Provident Fund (PPF), gratuities, paid leave and so on.

With comparatively inexpensive real estate in second-tier cities, such as Pune and Noida, suitable locations and premises may appear plentiful, but major projects often run into problems due to land disputes.

As QX points out, it can be difficult to comply with the multiple regulations you face; and it can become expensive if you are unclear what to do.

“Lots of people are frightened off by conflicting advice, or poorly served by advice that underplays the possible complications,” says Bickley.

“UK companies shouldn’t be prepared to take the consequences. What they need is good advice on what’s possible, whether that’s on mergers or joint ventures, or employment. Over our ten years in Gujarat, we’ve gained an awful lot of experience.”

What next?

ConTaCT:

To contact the UKIBC team in India about market entry services, call +91 1148 344 810 or email [email protected]

“Initially, it was quite difficult, even though we had the enthusiasm to do it,” she recalls. “We were the pioneers, so there was no one there to guide us.”


UK India Business Centre news

ConTaCT:

UKIBC Business Centre, gurgaon7th Floor, Tower B, Infinity Towersgurgaon, Haryana

t: +91- 1244537800email: [email protected]

BRITIsH CoMPanIes sIgn UP FoR laUnCHPaD

King’s College London and the Association of Colleges (AoC) signed up for UK India Business Council’s new low-risk market entry service – Launchpad- at UKIBC Business Centre in Gurgaon, India.

The core Launchpad support is offered through a dedicated consultant, based at the Business Centre in Gurgaon, devoted to helping clients understand the market through in-depth feasibility studies and detailed investigation of market conditions.

For more info, please email [email protected]

loRD gReen oPens UKIBC BUsIness CenTRe In InDIa

Former UK Trade Minister Lord Green, UKIBC Chair Rt. Hon Patricia Hewitt and British High Commissioner to India James Bevan at the first UK India Business Centre in Gurgaon, India.

Former UK Trade Minister Lord Green, UKIBC Chair Rt. Hon Patricia Hewitt, Chief Minister of Haryana Bhupinder Singh Hooda and British High Commissioner to India James Bevan at the first UK India Business Centre in Gurgaon, India.

UK MInIsTeR HUgo sWIRe MeeTs BRITIsH BUsIness aT THe UK InDIa BUsIness CenTRe

The UK India Business Council (UKIBC) and the Delhi British Business Group (BBG) signed an MoU in the presence of the Rt. Hon. Hugo Swire, UK Minister of State for Foreign Office, in Gurgaon. During his India visit, the Minister took a tour of the new UK India Business Centre in Gurgaon and met the UKIBC India staff.

The MoU between the UKIBC and the BBG will strengthen the support network available to British companies seeking to enter or expand into the Indian market. The MoU is part of a broader partnership between BBG Delhi and the UKIBC.

THe CoMPanIes aCT 2013 - RaIsIng THe BaR on goVeRnanCe

Over 70 delegates attended the UKIBC’s first event at the UK India Business Centre in Gurgaon. Where KPMG provided a brief of the recently enacted Companies Act in which they shared their understanding and expertise of how it would impact on UK businesses operating in India.

UKIBC India MD Richard McCallum and Dame Asha Khemka, Chair AoC India Ltd.

Hugo Swire event

Audience at the Companies Act event

13

UKIBC news Roundup

In November the High Commission of India, together with the UK India Business Council, and other leading Indian trade bodies, held the fourth annual India UK SME Business Meet which included a visiting delegation of over 50 Indian SMEs.

Delegates at the SME Business Meet held in London

The audience at the DMIC event

In October the UKIBC, together with UKTI and FICCI held an exclusive event featuring Amitabh Kant, Chief Executive, Delhi Mumbai Industrial Corridor Development Corporation (DMICDC), who gave an overview of the actual and emerging opportunities for UK businesses presented by the ambitious Delhi Mumbai Industrial Corridor (DMIC) project, and other industrial

corridors proposed across India such as the potential Bangalore Mumbai Economic Corridor Project. DMIC has been identified as a High Value Opportunity (HVO) for UK Plc. and many UK consultants have been awarded DMIC contracts. Attendees had the opportunity to explore these opportunities further.

OPPOrTuNITIEs FOr uK busINEssEs PrEsENTEd by ThE DelHI MUMBaI InDUsTRIal CoRRIDoR

Over 100 delegates attended with participants benefiting from exclusive one-two-one meetings and breakout sessions on doing business in India and the UK.

UK-InDIa sMe MeeT HelD In lonDon

oFFeRIng MenToRIng seRVICes To BRITIsH BUsInesses

By Vandana saxena Poria

Entering a new market is always a challenging time. Specifically, when it comes to India, there are so many opportunities to go after and at simultaneously, so many differences to the way business is conducted as compared to the UK. It is vital that businesses stay focused on their goals and set milestones that they want to accomplish. If they are unable to meet the milestones, it is important to analyse why in order to improve the chances of success in the future. In a recent study, the Fortune Magazine, was quoted as saying “training alone improved leadership skills by 22 per cent. When combined with executive coaching and mentoring, improvement jumps to 77 per cent.”

To help British companies understand the Indian business environment and to help them prosper in it, UKIBC and BBG have joined hands to offer a mentoring service. “This is an intensive 12-week programme designed to help businesses understand and succeed in their specific business area in India, and is ideal for both UK companies operating in India, as well as new businesses coming out to India. The programme has three main strands: identification and prioritisation of business opportunities and challenges; implementing plans to work on these areas and how the UKIBC/BBG network can support development.” The programme is run for key management (eg CEO) of 6-8 different businesses at a time. There are three half-day joint sessions for the key management, interspersed with weekly individual mentoring calls. Progress and experience is then shared between the businesses in weekly meetings.”

Our mentor, Sangita Patel mentors the businesses following the Three Laws of Performance model by Steve Zaffron and Dave Logan and I provide support into the UKIBC and BBG networks. For more information, please email [email protected]

(Vandana Saxena Poria is Chair, BBG Pune)


UKIBC events

MaRCH DelegaTIon

In March UK India Business Council is taking a business delegation to Delhi, Gurgaon and Bangalore. The delegation will cover all sectors and give UK companies the opportunity to meet Indian businesses looking for British suppliers and partners, meet British businesses already succeeding in India, and learn about the emerging opportunities in three of India’s most exciting business destinations.

For more information contact [email protected]

DoIng BUsIness In InDIa onlIne gUIDe

UKIBC have launched an online event about Doing Business in India which covers issues such as hiring and firing, protecting your intellectual property, and dealing with tax issues in India. The guide is available for free at www.ukibc.com/DoingBusinessInIndia

new Members & sector subscribers

TBs GB

association of Colleges

stern advisory

Booth Industries

The University Of manchester

IET

Copley scientific

Global Education Management Ltd

BJA Refrigeration Consulting Engineers

SweetTree SPL

Upcoming events India research and UKTI services

Webinar

20th February, Online

Trade Mission to India

10th-14th March, Delhi, Gurgaon & Bangalore

Webinar on the Union Budget

18th March, Online

Finding your route to market

19th March, Manchester

ngn: In Conversation with lord Bilimoria

26th March, London

UKIBC Research and Publications

UKIBC produces insightful research papers, reports and regular publications to keep our members and wider stakeholders updated on the India business opportunity and policy changes. We make sure that our research is relevant, current and correlates directly with needs of UK companies. UKIBC also publishes joint research reports and white papers. Here are a few of our most recent reports.

To subscribe for UKIBC publications please email [email protected], and for editorial enquiries please email [email protected]

15

success stories

sKIlls

Bournemouth & Poole College to sign an MOU with JCI in Gujarat to jointly deliver Vocational Programmes in Health & Social Care Level 2-7.

geneRal

Herbert smith Freehills acted on four of the leading cross border deals concerning India in 2013 including Diageo’s investment in United Spirits, the biggest spirits company in the world and Strides Arcolabs disposal to US group, Mylan Inc.

Qx ltd has restarted the British Business Group in Gujarat and is acting as secretary. The group is an association of business people and aims to encourage trade between India and UK with an opportunity for business networking within the state of Gujarat.

DIgITal

UKIBC strategic Partner BT continues to invest in building strength and depth across India to serve the Indian and global market. They now have presence in New Delhi, Gurgaon, Bangalore, Mumbai, Pune, Noida, and Chennai.

UKIBC member, Vodafone group Plc, has sought the approval of the Foreign Investment Promotion Board to raise its holding in its Indian arm to 100%, barely two months after the government allowed foreign entities to fully own companies in the sector. Vodafone India, the local arm of UK’s Vodafone Group Plc, will also spend around £660m in the country to expand its data network and coverage in addition to its annual capex of £477m over the next few years.

If you would like to get more information on these companies or would like to send us your success stories, please contact [email protected]

Follow us:

astute electronics ltd have employed a Country Manager for their soon-to-be launched, Indian joint-venture business, Astute Sattva. Based in Bangalore, Antony Rajesh will be working with our existing customer base as well as working to develop new opportunities.

TestPlant continues to secure business partnerships with major Indian IT services businesses. Recently the company signed a ‘COIN’ innovation agreement with Tata Consulting Services.

lIFe sCIenCes

British drug-maker glaxosmithKline Plc will invest £83m to set up a new factory in India, creating 250 jobs. When complete, the new factory will make pharmaceutical products for the Indian market at a rate of eight billion tablets and one billion capsules a year.

summit Medical commissioned the UKIBC to undertake market research to aid in the development of a market entry plan and have no begun building a timeline and costing for a key part of their market entry plan.

ReTaIl

Online Indian retailer Myntra has forged an exclusive partnership with UK-based apparel manufacturer, Raised on Denim, one of a growing number of such tie-ups between international brands and Indian portals. The UK brand will manufacture its premium youth apparel range, Stanley Kane, locally and sell it on Myntra.

Pavers england have expanded their network of airport stores. Pavers have just opened four more airport stores (Amritsar, Lucknow, Jammu, Srinigar) and won the tender for Mumbai’s vast new international airport due to open at the end of January 2014. This expansion consolidates Pavers No 1 position in airport retailing in India.

Polo Marco experience ltd – totally customized travel experiences in Europe just for high end Indian guests. The new luxury brand was launched across India in September and is now extending its marketing network.

engIneeRIng

British motorcycle brand Triumph entered India with 10 models in November, priced between Rs 5.7 lakh and Rs 20 lakh. Triumph, which has set up a wholly owned subsidiary in the country, will start delivering its bikes from January next year.

UK company Pro² automotive engineering – Pro² successfully completed a four month In Market Testing project in October for an Indian OEM running a vehicle in Algeria for 40,000km’s


skills & education: Commercial Feature

“I guess we were initially attracted to India because there was so much chatter about the tremendous opportunities on offer there to British companies”

AOC InDIa Blazes a TRaIl It’s just a year since the Association of Colleges (AoC) targeted the UK’s further education (FE) sector with its ambitious ‘Come to India’ strategy. Ian Halstead finds out more.

Helping one FE college to leave the certainty and security of Britain’s shores, for a trail-blazing journey across India’s immense and challenging skills landscape sounds a serious challenge.

Helping 33 colleges to do so, during a lengthy era of austerity, and with a government seemingly determined to tinker with every aspect of the education system, sounds like a sure route to the doctor’s surgery.

However, the AoC’s international director, John Mountford, is showing no signs of such pressure, as he muses about his organisation’s India strategy at its HQ, a briskly efficient and modern chunk of office space, just off London’s New Oxford Street.

“I guess we were initially attracted to India because there was so much chatter about the tremendous opportunities on offer there to British companies,” he recalls.

“The idea of exporting skills and expertise from here, to set up partnerships with overseas governments and individual institutions isn’t new, but it almost always seems to be associated with our higher education sector, rather then FE providers.

“We looked at India’s predicted requirements for vocational training in the short and medium-term, researched the market, made several visits there to get a feel for the potential, and decided that there were serious commercial opportunities.

“We haven’t massive resources by comparison with most trade associations, but thought we could certainly raise the profile of the UK’s FE sector in India, identify which areas of India’s skills agenda might be receptive to overseas partnerships and also offer support to individual colleges.

“The ‘AoC in India’ venture which grew from those early thoughts is very much a partnership model, because that is the only way it could work. We spoke to all the colleges here, to the British Council and also to India’s three biggest organisations with skills agendas.

“Right from the start, India’s National Skills Development Corporation, the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce & Industry (FICCI) were tremendously enthusiastic.

“Their analysis mirrored ours, that the best way forward was to set up partnerships between individual colleges, sector skill councils and local training providers.

“There was such a groundswell of support that toward the end of 2012, we realised we needed a presence in India to develop and enhance these early links, so in January 2013, we opened an office in Delhi, with John Philip as our representative.”

One year on from the high-profile opening, by Skills Minister Matthew Hancock, John reckons solid progress has been made, both in India and back

Asha Khemka signs the formal Memorandum of Understanding, with CII director-general

Chandrajit Banerjee, watched by the UK’s Minister for Universities & Science, David Willetts.

17

skills & education

home, but is also candid about the challenges ahead.

“We’ve established a strong brand, which is recognised by Indian decision-makers at national and state level, and we’re connecting with the right people. Now we have to commercialise all that progress and take advantage,” he says.

“Momentum is vital, as is understanding the nature of the opportunities. Some are of a scale which a single college could not take on, but would be suitable for a consortium.

“The key sectors are construction, English language teaching, healthcare and engineering, so as we get deeper into 2014, we will be identifying member colleges who specialise in those sectors, and trying to engage them with our India strategy.

“You obviously can’t deliver UK-style training in India, so you need colleges to be flexible and innovative in their approach, and I think we’ll probably fine-tune our model so that one college will take the lead in each sector.”

Chairing the AoC in India project is Asha Khemka OBE, The Principal and Chief Executive of West Nottinghamshire College Group, and someone who well understands the challenges.

She left school in India at the age of 13, upon her engagement, was married a year later, and arrived in the UK a decade on, with three youngsters, but no word of English.

Asha - who now leads one of the country’s ‘super-colleges’, with some 20,000 students - makes a compelling and eloquent case for the AoC’s project, from the perspective of both her native land and her adopted country.

“India wants to give 500 million young people the skills to make them ready for work by 2022, and it’s in everyone’s interests to help them reach that target because many of them will be working around the globe for years to come,” she says.

“We know that the UK has a world-class HE sector, but I think our FE sector is equally so. India has opened the door for us to accept this tremendous opportunity, and if we all take a united approach, we really can make a difference.

“There is a gap between academic and vocational education in this country, but it is a gulf in India, because there is so little understanding at personal and institutional level about the merit of job-based training.

“Yes, India’s skills ambitions are huge, and it does need to change many things, particularly the way its construction industry works and how its infrastructure projects are delivered. However, the enthusiasm for education is also there in abundance.”

Asha is distracted momentarily, as a straggle of students appear to be heading the wrong way across her college’s Mansfield campus, but as they rediscover the right path, she returns to her theme

with impressive passion.

“There is much work to be done in India, of course, to make parents change their traditional mindset that their children should become lawyers, doctors or engineers, and to succeed, there must be a tripartite approach,” she says.

“Employers must engage fully with the providers of vocational and technical education, India’s colleges and polytechnics must invest in the right staff and facilities to create the right setting in which to learn, and there have to be jobs at the end of the process.

“Of course it will take time, and establishing partnerships between UK colleges and India will be challenging, but it’s also

very exciting. Even if every college from here was involved, we couldn’t make an immediate impact, but the contribution we can make will really count.

”I am Indian, and a very proud Indian, but I am also very much British, and I do want to be involved in this huge challenge. We are now at the juncture when we have to focus on delivery, and on realising the business opportunities which are there.

”Some colleges aren’t yet engaged here though, and some employers are being slow to realise the potential in India, so this must be the year when we persuade all of them to understand just what we can all achieve by working together.

”If our FE colleges don’t really commit to this project, and take advantage of this opportunity, then skills providers from other countries will, because India will be forced to look elsewhere.”

“Asha - who now leads one of the country’s ‘super-colleges’, with some 20,000

students - makes a compelling and

eloquent case for the AoC’s

project, from the perspective of both

her native land and her adopted

country”

What next? ConTaCT:

Jesh Rajasingham

skills and education sector Manager

UKIBC

T: +44 (0) 207 592 3841

e: [email protected]

International Director,John Mountford


Practical advice

HSBC’s strategic vision to be the leading international bank not only supports the development of cross-border international trade, helping corporates to establish business in other countries, but also contributes to the development of world trade.

Our group’s huge international network of offices is ideally placed to engage with clients which have international interests and are ambitious to expand outside their home market.

As India continues to benefit from consistent GDP growth, more and more companies are looking to establish themselves here.

HSBC’s local presence provides significant support to such corporates in both setting up their initial footprint, and then managing their ongoing banking requirements, as we did, for example, with the famous Glasgow-based engineering business, Weir Group.

From an HSBC India perspective, the India-UK trade corridor represents an important focal point to further strengthen the trade opportunities between the two countries and to capture additional market share.

We specialise in sophisticated trade services, covering all aspects of transactions, both on the ‘sell’ and the ‘buy’ side, for both international and domestic trade, and also have the ability to structure complex solutions which are precisely tailored to a customer’s needs.

Feedback from UK companies indicates that they particularly appreciate our expertise in understanding local regulatory guidelines, so they can more easily appreciate the often-complex nuances of doing business in India.

Our collaboration with the FT-SE 100 corporate, Weir Group, underlines the way we like to embrace and

understand all aspects of a client’s needs across their operations.

HSBC is the primary banker for Weir Group in India, as well as in the UK, and Weir India Private Limited, which operates under the brand name of Weir BDK, is a leading manufacturer of industrial valves in India.

Weir required a specific set of solutions for meeting their trade requirements between their operating divisions in India and the UK, which we were able to devise after making a detailed analysis of their corporate structures in both countries.

HSBC’s advisory team was especially careful to examine all regulatory aspects of the transactions in India, which enabled Weir to provide all the necessary information and documentations and ultimately to ensure that the transactions were smoothly and efficiently processed.

Those advisory services were well received by Weir, and apart from regular banking services, HSBC has also subsequently partnered with the company for various training programmes.

Two particularly important areas of activity, on which we were able to advise their company’s officials, were Global Trade and Receivables Finance, along with updates on the ever-changing regulatory environment.

HSBC has also partnered with Weir to help it liaise with the Reserve Bank of India, so that it could comply with the various regulatory requirements prescribed by the central bank.

GDP GROWTH BOOSTS HsBC

19

Insight

India’s Companies Act 2013 will change the focus of corporate governance from control to disclosure. PwC’s Pankaj Tewari explains how.

This legislation is expected to be fully enforced by March 2014, and as a senior manager in PWC’s risk advisory services team, I believe it will create a paradigm shift in India’s approach to governance.

India Inc will certainly have to gear up to ensure a smooth transition, not least as the last definitive legislation on how companies should conduct themselves was issued in 1956.

The new act subjects both private and public companies to higher standards of governance, and the regulatory regime for private limited companies has been made stricter, through the withdrawal of several previous exemptions.

Among the changes are a legal definition of an ‘independent director’, and an elaborate code of conduct to which they are expected to abide.

There are also broad guidelines, such as upholding ethical standards of integrity and devoting sufficient time and attention to allow informed and balanced decision-making.

One very interesting aspect of the new regime is that the duties of directors have moved beyond the board-room, and they will now have to show an equal sense of responsibility toward the community and the environment.

Listed companies and large public companies will also be required to have at least one female director.

The legislation also attempts to formally introduce a Corporate Social Responsibility (CSR) culture, by requiring companies to incur a minimum expenditure on social activities; through a formula related to their net worth, turnover or net profitability.

A new concept of fast-track processes for mergers has been introduced, which will simplify group restructuring, and specific provisions have also been made for cross-border mergers.

Other welcome changes include both giving powers to majority shareholders to purchase minority shareholdings, and providing protection to minority shareholders against malicious or fraudulent attempts by majority shareholders to squeeze them out.

The concept of class action suits has also been introduced; allowing members and/or creditors of a company to apply to the National Company Law Tribunal (NCLT), against the company or its directors.

The former can now seek damages, compensation or other suitable action, if the latter were involved in acts prejudicial to the company or themselves.

Another measure is to make auditor rotation mandatory, for listed and other defined classes of companies. Individuals must be ‘rotated’ every five years, and audit firms every ten years. The scope and extent of auditors’ liabilities has also been substantially enhanced.

All companies must now follow a uniform financial year; from April 1st to March 31st, although NCLT may permit exceptions in case of companies which have holding or subsidiary companies outside India. Existing companies have two years to make such alignments, after the legislation takes effect.

These forward-looking measures have been introduced to make it easier to do business in India, and there will certainly be challenging times ahead in India’s board-rooms, as everyone comes to terms with the demands of the new environment.

“A new concept of fast-track processes for mergers has been introduced, which will simplify group restructuring, and specific provisions have also been made for cross-border mergers”

What next?

ConTaCT:

Call the UKIBC Business Helpline for more information on doing business in India on 0800 0196 176

DISCLOSURE IS A MUsT


21

Commercial Feature

Indian M&A remains resilient despite an uncertain yearIndian M&A activity during 2013 withstood the economic slowdown, political uncertainty and weakness in the rupee. The last quarter showed a similar deal volume run-rate to the first three quarters combined, adding 123 deals to the 377 at the end of Q3 to close the year with 500 deals.

With deals amounting to Us$28.19 billion during 2013, Indian m&a activity was subdued, lower both in volume and value, when compared to 2011 and 2012. However, taking into account the large Us$12 billion Vedanta group restructuring deal in 2012 (excluding mergers and internal restructuring deals) as well as the backdrop of strong political uncertainty and the instability of the rupee, m&a deal value was actually up 15% in 2013.

Notably, outbound deal volumes have been progressively declining since 2011 although outbound deal value remained steady in 2013 largely driven by ONGC’s oil block acquisitions totaling over US$5 billion. Inbound M&A deal values have not reverted to earlier levels though deal volume has remained steady.

2013 witnessed five M&A deals valued at over a billion dollars each, compared to four in 2012, although sharply down from ten deals in 2011. Topping the list were Unilever’s stake increase in Hindustan Unilever for US$3.1 billion followed by ONGC’s Rovuma oil block acquisitions for over US$2.5 billion. Unilever’s open offer was the largest such deal in the history of India’s capital markets. The US$2.5 billion deal between Apollo Tyres and Cooper Tyre was called off at the last moment due the impassable differences.

Private equity activity saw a steady improvement with a 12% increase in deal volumes and a 40% jump in deal values over 2012 making up for some of the sharp drops in corporate M&A activity.

Inbound deal volume remained at levels seen in previous years but with a substantial jump in deal value, although the weaker rupee appears to have curtailed appetite to acquire overseas.

Final wordsThe year 2013, though not a blockbuster one, proved to be fairly resilient despite political and fiscal uncertainties. We saw a gradual stabilisation of the rupee and the key stock indices in the second half of the year and remain optimistic that a firm outcome in the 2014 elections coupled with macro-economic calm in the West will help revive M&A activity during 2014.

Prime sectorsSectors to watch continue to be pharma and aviation. E-commerce also saw interest with almost 100 PE/VC deals during the year, led by Flipkart, Snapdeal and Zomato.

The drug deficit in the global pharmaceutical industry (mainly in the US), drying up of the R&D pipeline globally coupled with the expected patent cliff in the US drug market in the next two to three- years and the constant pressure on manufacturing costs will make India an attractive manufacturing destination. KKR’s investment of US$200 million in drug-maker Gland Pharma is a prime example of this trend.

Recent approval of the Jet-Etihad deal by the Competition Commission of India could be a precursor for more deals after the Government relaxed FDI rules in aviation in 2012.

Deal Summary Volume Value (US$bn)

DomesticCross Bordermergers & Internal Restructuring

Total m&aPE

Grand TotalCross Border Includes

Inbound

Outbound

2011 2012 2013 2011 2012 2013 216 234 220 5.04 6.08 5.75 288 262 221 39.58 14.51 17.89 140 102 59 - 14.80 4.55 644 598 500 44.61 35.38 28.19 373 401 450 8.75 7.38 10.39 1,017 999 950 53.36 42.76 38.58

142 140 139 28.73 5.96 8.64

146 122 82 10.84 8.55 9.25

This article first appeared in India Watch, a Grant Thornton quarterly publication. For further information please contact Anuj Chande at [email protected]

advanced engineering & Manufacturing

Wakefield-based engineering company Group Rhodes is setting up a factory near Bangalore. Mark Ridgway, MD, Group Rhodes explains how the venture evolved.

We celebrate our 190th anniversary this year, and have always recognised the potential of overseas markets.

In 1899, the company registered the Colossus of Rhodes at its trademark, which underlined its international ambitions, and opened an office in Paris 11 years later.

In World War Two we distributed our products world-wide, as repair shops on Royal Navy ships, and we later launched a major export drive mainly to Western Europe and the US.

Today we export to over 30 countries, which accounts for around a third of turnover. As well as being keen to enter new territories with existing products, we always look to innovate and roughly 10% of turnover is invested in R&D.

Our founder, Joseph Rhodes, patented the first steam-hammer in 1854, and we recently won the Queen’s Award for Enterprise in the Innovation category for developing new methods of forming titanium and aluminium alloys, at high temperature and high pressures.

Last year we won a Queen’s Award for Enterprise in the International Sales category for our world-wide distribution of the same technology.

With respect to India, we have recently shipped £3m of kit, mainly for aerospace applications, which really is market-leading.

We took our time deciding our strategy, and eventually agreed a joint venture was the most logical route, appointing an in-country manager.

It was a matter of finding the appropriate place on the risk-reward spectrum. We clearly wanted to benefit from our investment in India, but were also conscious of our resource limitations and the benefits of having a partner with a comprehensive knowledge of our target sectors.

RHODES LEAD TO BangaloRe

We are not going to India for low labour costs, that time is gone. We’re entering the market to service the huge potential that it offers across the advances engineering sectors that we serve.

We looked at several potential locations, but settled on Bangalore as it offered the right skills, is a centre of aerospace activity, and has strong international connectivity. It is also a location that works well for the heavy ceramics sector.

There is an increasing demand for automation in the Indian brick-making industry and one of our key European customers, Wienerberger, has its Indian HQ and production plant in Bangalore.

In the medium-term, our factory will supply our Indian aerospace clients, including Hindustan Aeronautics, but our short-term goal is winning infrastructure business.

Brick-making in India is still very locally-based, and because it costs almost as much to transport bricks as to make them, the industry isn’t able to drive down the price, or supply customers on any significant scale.

Some 30m people work in India’s brick-making industry, demonstrating just how labour-intensive its production techniques are, but as infrastructure improves, we believe local distribution of bricks will become economically viable, hence the need for an appropriate level of automation.

We have obviously had to fine-tune our business model for India. Supplying clay-preparation equipment to an embryonic sector is a long way from aerospace, where we tend to sell high-value products to state-owned enterprises or major plcs.

We see massive potential as India’s growing middle-class demands better housing, and believe we can service this demand.

It’s important that any UK-based company, especially an SME, invests time and effort on selecting good-quality advisers and accountants to comply with India’s challenging legal and tax systems.

That said, however much you try to minimise risk, you ultimately have to place a degree of trust in the people with whom you work, especially when setting up a jv.

We could have crunched numbers forever, factoring in various political and economic risks, but the potential is so great that we needed to be in India as quickly as possible. It is certainly a challenging market, and cannot be taken for granted, but it is also full of potential.

“Last year we won a Queen’s Award for Enterprise in the International Sales category for our world-wide distribution of the same technology”

Mark Ridgway, MD,

Group Rhodes

What next?

ConTaCT: Prasenjit Dharadvanced Engineeringand manufacturing sectormanagerUKIBC

T: +44 (0) 207 592 3844e: [email protected]: +44 (0) 207 592 3041W: www.ukibc.com


Burton College: Commercial Feature

TRaInIng FOR A BRIGHTER FUTURE

Rosy Banwait

23

Burton and South Derbyshire College (BSDC) UK is dedicated to working collaboratively with local, national and international employers, ensuring workforces are equipped with the skills demanded by industry.

The college works in partnership with employers to identify skills gaps in organisations and sectors, and develop bespoke and high quality training solutions.

The flexible solutions delivered cause minimum disruption to businesses, whilst providing maximum rewards for both the company and the individual.

Businesses can benefit from increased output, streamlined systems and increased staff motivation, while individuals gain advanced skills, increased confidence and additional qualifications.

The college also develops programmes to re-skill adults from declining industries to new and emerging industries, with exciting opportunities for the future.

BSDC has a strong track record of working in collaboration with national employers on training solutions, including large scale workforce development programmes.

In line with local industry, BSDC has particular expertise in advanced manufacturing and engineering, and has worked with companies such as Toyota Manufacturing UK, Rolls Royce and Finning Caterpillar on future-proofing their businesses with training and skills.

The college is also proud to be the further education and skills partner to St George’s Park, the UK’s National Football Centre.

Working in partnership with St George’s Park, BSDC is developing new programmes to meet the

requirements of the new centre and the employment opportunities it will bring.

Rosy Banwait, International Business Development and Relationships Manager at BSDC said: “We work with employers to deliver bespoke training solutions that have a tangible impact for employers and their bottom line.

“We are committed to using our experience to work with companies and industry in India to collaboratively address skills challenges.

“Our goal is to revolutionise the way providers, industry and governments tackle the ever-evolving skills demand, both in the UK and India by creating the skills of tomorrow ... today”

“BSDC has a strong track record of working in collaboration with national employers on training solutions, including large scale workforce development programmes”

Infrastructure

Benoy director David Ellis tells Ian Halstead about its Indian adventure.

For decades, Benoy was a dominant force on the British architectural scene, with London’s Westfield scheme and the Birmingham Bullring the most spectacular elements within its eye-catching retail-led portfolio.

However, as the 21st century began, the firm’s strategic focus shifted overseas and the fast-expanding powerhouses of South-East Asia were its core targets, as it sought new customers with ambition - and finance.

The most imposing example of its new work is the futuristic ION Orchard scheme in Singapore, which both transformed the city-state’s premier retail district, Orchard Road, and acted as a very visible ‘calling-card’ for Benoy throughout the region.

Now more than 90% of its projects come from outside the UK, and last October’s year-end figures underlined the wisdom of Benoy’s decision to think globally, with staff numbers, revenue and profits all climbing sharply, the latter to a record £8.2 million.

The Hong Kong office, established in 2002 was the stepping-stone for its entry into India four years later, as David explains.

“Our first scheme was in Delhi - which came from a speaking engagement at a major conference - and from that time we have chosen to work remotely with our Indian clients. Since 2009 we have had a liaison office in Mumbai, where a former colleague from London is based.

“We rely on her enormously, not just for her awareness of the major players on the Indian development scene, but for her contacts throughout the industry.

GLOBAL STRATEGY DRIVES bENOy’s gRoWTH

One Bangalore West


“Since 2008, we’ve run our India projects from London though. Typically, the team flies out for a week at a time, running intensive workshops with clients and consultants to make the most of our time there.”

”We review our India strategy periodically, to see how individual projects are moving forward, as well as how relationships with clients are evolving. If we thought we needed to take a different approach, then we would, but for now, everything is working very smoothly.”

Benoy bills clients in dollars, so the recent decline of the Rupee against the US currency means its Indian clients are paying more for its services, but David doesn’t see a potential problem.

“International architects are expensive, but we’re still winning work, often against architects from North America, South Africa and Hong Kong, so we believe our clients feel they’re getting value for money,” he says.

“No-one wins all their pitches. Sometimes, everything falls into place. Sometimes it doesn’t. We don’t have ‘target’ cities, but we do want to work with the best developers and landowners, so it’s more about the strength of the client and the quality of the scheme than the location.”

Two of Benoy’s early projects were in Pune and New Delhi, and both won trophies at the 2013 India

Benvoy Director,David Ellis

Shopping Centre Awards, when Benoy’s MD Asia, Simon Blore, suggested that the Indian environment allowed his designers to realise some of their most innovative work.

“It’s a very happy mix of influences,” agrees David. “We’ve always specialised in the big retail-led mixed-use schemes, which is just what India wants. At the same time, there isn’t an ‘Indian style’ in architecture, as you find in many countries.

“I find that Indian developers have a maturity about their design mindset. They don’t want schemes which replicate what has been seen elsewhere, they like to see local influences in your proposals, which very much chimes with our preferred approach.

“We won our first scheme in Bangalore after being invited to enter a design competition, three years ago, and now we’re on our fifth project with the same developer (Prestige).

“It’s a benign climate for most of the year, so we try to experiment. You don’t need enclosed malls with air-conditioning - although inevitably, you have to be aware of security issues - and we like to use indigenous Indian building materials.”

“The scale of our projects here also means they’re never going to be brought forward quickly. We’re working on a residential scheme (One Bangalore West), for example, which will be 300,000 square metres across 80 storeys. Such schemes inevitably have long gestation periods.

”We’ve taken time to build a strong brand presence here, and despite some uncertainty in the market at the moment, we’re content to wait for the economy to pick up again as we’re committed to India for the long-term.”

“International architects are expensive, but we’re still winning work, often against architects from North America, South Africa and Hong Kong, so we believe our clients feel they’re getting value for money”

Bangalore’s Falcon City

25

Retail & lifestyle

India is Asia-Pacific’s biggest spirits market. Ishara Callan catches up with Diageo India’s MD, Abanti Sankaranarayanan, to learn more.

It’s little more than a year since Sankaranarayanan took charge of Diageo’s Indian operations, and it’s been a whirlwind time for this former Tata Tea executive.

Over the years, the Indian market has opened up several growth opportunities for Diageo, triggered by factors such as the growing economy, increasing spending power, changing demographics and shifting consumer aspirations.

“We’ve seen several influences combine in recent years to make this country into one of Diageo’s strongest drivers of global growth,” she admits.

“Economic growth has increased spending power, and the changing demographics have shifted consumer aspirations. India’s luxury goods market is growing at 15% to 20% per year, with sales expected to reach £9 billion by 2015, almost double what they are today.”

”Increasingly, Indian consumers are discerning and well-travelled, and I believe they also appreciate brands which strike a balance between heritage and modernity.”

The speed at which the Indian market is changing makes it impossible to define a ‘typical’ customer, but Sankaranarayanan observes that the upwardly mobile middle-class has an appetite - and a thirst - for affordable luxuries, especially spirits.

“We notice that consumers are increasingly moving to more upmarket brands; from prestige whisky to premium whisky, and from standard Scotch to blended whiskies and single malts.”

”Consumers aspire to a better lifestyle, and their aspirations cause them to search for premium products, where we have a very strong portfolio of brands.”

Marketing anything in FMCG (fast-moving consumer goods) sectors is challenging, but especially so in such a vast market as India - a country on the scale of a continent.

”Increasingly, Indian consumers are discerning and well-travelled, and I believe they also appreciate brands which strike a balance between heritage and modernity.”

MIDDle-Classes LOVE THEIR LUXURIES


“It is a challenge,” admits Sankaranarayanan. “Consumption patterns are ever-changing, so we need to keep innovating our consumer campaigns, and are always seeking to engage directly with the consumers.

She and her marketing team need to be especially creative, of course, as it’s illegal to promote alcohol in India through traditional print and TV advertisements.

“We launched our marketing platform for Johnnie Walker - The Journey, in Mumbai, in December, and included a wealth of cultural knowledge and content to bring the brand’s legacy to life,” says Sankaranarayanan.

“For Johnnie Walker Blue Label, our marketing campaign focuses on the lifestyle experiences of our consumers, but also on partnerships with other luxury brands, including Alfred Dunhill and Porsche.”

Diageo’s consumer research has identified intriguing differences in buying habits; both between states and in different retail outlets.

“Across the country, we’ve observed that 97% of consumers plan their purchases before they enter off-licences and stores, spending only six or seven minutes inside,” Sankaranarayanan reveals.

“However, in restaurants, lounges, clubs and bars, they are more open to experimentation, and willing to try new brands or categories.

Another trait is that buying behaviour varies according to the state. In Punjab, pricing is a decision-driver, but in Karnataka, people prefer to use self-service stores where they can touch and feel the product, then make their decision.

India is a very attractive proposition for Diageo and it continues to be one of the strongest growth drivers for the company globally.

dId yOu KNOWIn India, beer accounts for just a fifth of the alcohol drunk, with spirits making up 80%, and Diageo expects demand for whisky to continue to grow at a rapid pace.

What next?

ConTaCT: Tara PanjwaniRetail, Lifestyle and Logistics Sector MangerUKIBCT: +44 (0) 207 592 3841e: [email protected]

Abanti Sankaranarayanan

27

Healthcare & life sciences

What next? ConTaCT: Radhika PandeyLife Sciences and HealthcareSector ManagerUKIBC

T: +44 (0) 207 592 3842e: [email protected]

CAREFUL WITH ReD TaPe

Andrew Shepherd

28

Omega Diagnostics’ first direct presence outside Europe is in India. Founder and CEO Andrew Shepherd explains its journey there to Adam Pollard.

We’ve always specialised in diagnostic techniques, originally to detect such infectious diseases as malaria, dengue fever, chagas disease and syphillis.

Now we specialise in devising and selling sophisticated kits and systems to hospitals, blood banks, clinics and laboratories worldwide, to help medical practitioners and physicians diagnose diseases, make treatment decisons and monitor patients.

Our operating areas are allergy and auto-immune, food intolerances and infectious disease, and we have a presence in more than 100 countries, from our global HQ in Scotland.

We also have three subsidiaries, in England, Germany and Mumbai, plus three manufacturing sites in the UK and another in Germany.

Our early success in overseas markets was officially recognised when we received a Queen’s Award for Export Achievement in 1993, which provided a solid foundation for further success.

We had been selling products in India via distributors, for years, but several reasons, including a strategic focus on BRIC countries, and the acquisition of a major competitor, drove us to go direct.

Our decision was also supported by a good working knowledge of the India market, and the availability of a country manager, who we trusted and who we knew could set the business up.

The first step was to incorporate our Indian subsidiary, which we began a year ahead of our target launch date. We then managed the transition from distributor to direct operation, ensured stock availability for our end-users and switched contracts from our key laboratories to the subsidiary.

We’d identified and contacted a former employee from a previous distributor before taking the decision to enter India directly, and he knew who to recruit in key positions.

We then fine-tuned our business model, by immediately selling a wider range of products, and strengthening our focus on customer support, which had previously been lacking.

Now we operate in nearly every state, have a dozen field representatives managing direct customer and 80 distributors.

In good time, we’ll expand into the remaining states, and into Tier 2 and Tier 3 cities.We are a diagnostics specialist, so we don’t envisage diversification into other healthcare sectors.

We didn’t encounter any particular shocks or surprises when we began doing business in India, as we knew the market well. The main issue was the time to set things up. India is very bureaucratic and everything seems to require a licence. Time was our only real challenge.

As the India subsidiary began trading, our main ongoing obstacle was import barriers, and the time needed to licence products for import.

If I was asked to advise other UK-based life sciences companies about entering the Indian market, I’d say allowing sufficient time for bureaucracy, and having the right people with the right local knowledge there on the ground were the two crucial elements.

Business exchangeIssue 05 www.ukibc.com

Business opportunities in India

29

JoInT VenTURe FoR MID-sIzeD BUses/CoaCHes FoR InDIan MaRKeT

an Indian company which manufacturers three-wheelers is interested in a JV in India.

The Indian company is a medium sized OEM and has the requisite land, infrastructure for manufacturing and local contacts/ network for marketing of these buses. They expect the UK partner to bring in technical expertise and brand on the table.

Deadline: 15/04/2014

Find out more: http://www.ukti.gov.uk/pt_pt/export/countries/asiapacific/southasia/india/businessopportunity/666840.html

HIRIng oF seRVICes FoR oPeRaTIon anD MaInTenanCe ConTRaCT oF MoBIle oFFsHoRe PRoCessIng UnIT

One of India’s leading multinational oil and gas company invites bids for hiring of services for operation and maintenance contract of mobile offshore processing unit

• Bidding Document Available: 20 Dec 2013 to 9 Jan 2014

• Bid Receipt Date & Time: Wednesday, 19 February 2014 at 4:00 pm (IST)

• Cost of Bidding Documents: US $1000


Find out more: http://www.ukti.gov.uk/export/countries/asiapacific/southasia/india/businessopportunity/682920.html

suPPly OF INTEGrATEd PrOPulsIvE sysTEM (IPs)

Bangalore based Public sector organisation in India seeking supply of Integrated Propulsive System (IPS) suitable for 70-100 seater civil aircraft.



VHF TRansCeIVeR DeVeloPMenT UnITs

Cochin based public sector organisation in India seeking VHF transceiver development units



PoRTaBle TRaCKIng ANTENNA sysTEM

Bangalore based public sector organisation in India seeking portable tracking antenna system. The complete tracking system (i.e. Pedestal, antenna, ACU and radome) with accessories must be from a single manufacturer only, tracking antenna system has to be off the shelf product available in the market with proven track record.



OPPOrTuNITy FOr UK BaseD CHaRTeReD ACCOuNTANCy FIrMs

a leading public authority invites online applications from Chartered accountants and Chartered Accountants Limited Liability Partnerships (LLPs) who intend to be empanelled with their office for appointment as auditors of Government Companies / Corporations for the year 2014-2015.



TenDeR FoR sUPeRConDUCTIng WaVelengTH sHIFTeR anD oTHeR eQUIPMenT

a nuclear research organisation has issued tender notifications for following equipment

1. Superconducting Wavelength Shifter - 1 unit

2. Digital Beam Position Measurement Electronics Units with Accessories - 2 units

3. CNC Water Jet Cutting machine - 1 unit

4. Triple Stage Raman Spectrometer - 1 unit



Send us your company’s India based business opportunities and tenders to [email protected]

UK India Business Council HEAD OFFICE 12th Floor, Millbank Tower 21-24 Millbank London SW1P 4QP United Kingdom

t: +44 (0) 207 592 3040 e: [email protected] w: www.ukibc.com

UKIBC Business Centre 7th Floor, Tower B, Infinity TowersGuragon, Haryana

t: +91- 1244537800

UKIBC Business exchange final low res

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