THE CHALLENGE OF MANAGING GOVERNMENT RELATIONS IN INDIA

India today is a trillion dollar market with an enviable rate of GDP growth. India's economy is fuelled by a combination of a large services sector, a strong and diversified manufacturing base and a significant agricultural sector that continues to provide a framework for the growth of the domestic economy. The country's resilience in weathering the recent global downturn and financial crisis has made governments, policy-makers, economists, corporate houses and fund managers believe that India can play a significant recovery of the global economy in the months and years ahead. Toady, India plays an increasingly important role in global geopolitics- not only as the world's largest democracy, but also as an  economic powerhouse that is coming into its own. India is one of the most important markets for multinational companies and Indian organizations going global.

There is a strong business case to make, however, for companies in India to improve their government outreach and communications and to ensure that regulators and government leadership understand the company, its practices and how it is contributing to the local economy. Whilst in recent years India has adopted reforms to improve its regulatory environment, there remain significant challenges, notably an inefficient government bureaucracy and excessive burden of government regulation. Corruption is endemic throughout the central and local government and the private and public sectors. The Indian government recognizes that corruption is a risk to investor confidence and long-term economic growth and businesses found to be engagingin corruption practices face legal and reputational risks.

Many states, many markets....

The Indian market is very diverse. There are many different social, cultural and economic strata, unevenly distributed across the subcontinent. India's federal structure creates large differences in regulatory environments and uneven development leads to significant income disparities. Companies need to focus on the markets within India that they are the most likely to be successful in. It is important to gain a nuanced insight into the business dynamics specific to India's different markets. When dealing with local conditions, dependable on-ground intelligence can ensure that opportunities, priorities and concerns can be addressed appropriately.

Networks....

Business networks in India can be complex and are often governed by socio-eonomic considerations. Most players operate in close-knit and well-guarded networks and are generally weary of outside interests. Trust, confidence and a need to interact first-hand are essential for outside players to gain access and opportunities.

Bureaucracy and Politics....

The Indian bureaucracy and political class administer one of the most complex countries with a population of over 1 billion, democratic elections, many different languages [22 officially recognized languages, but around 33 different languages and 2000 dialects have been identified], and hugely differing requirements of its citizens. While structures are in a state of continuous evolution from the introverted approach of the last century towards a globalized, free market appoach, there is still a high degree of public sector influence on many aspects of the economy. Anyone doing business in India has to engage with India's many different central and state ministries, institutions and regulations. This is often a significant challenge for any company, but especially those not familiar with the country. At the same time, many bureacucrats, political decision-makers are interested in harnessing the problem-solving abilities of the private sector and are open to new suggestions, solutions and initiatives. Building a winning business in India requires an in-depth understanding of its coalition politics, dynamic market and socio-cultural fabric. It requires an understanding of a wide range of complex and continuously evolving regulatory and policy issues that are an active part of its pluralist democratic set-up. The Indian bureaucracy plays a key role in the conceptualization, change and reform of policy and regulation. At the same time, civil society plays a strong role in shaping the country's business environment.

Unique market requirements....

Market dynamics, customer preferences and regulatory requirements in India are unique and far removed from those in Europe or elsewhere in the world. An approach to entering the Indian market has to be based on a unique strategy for the Indian market. Central to a successful Indian strategy is an adaptation to local realities.

Government Relations....

Companies need to know how the Indian government works and what's going on in the government so that they can take advantage of business opportunities as they emerge. They need to explain and argue their positions with regard to current government policy as relating to a particular issue and also influence it in a positive and collaborative manner.

Companies need to establish regular contacts with concerned legislators and officials at the central, state and local levl and provide them with an update on their business plans and corporate direction.

It is important for a corporation to understand government requirements and, accordingly, fine-tune its products and service strategies for the Indian marketplace.

For certain influence cannot be achieved from a distance and the scope of the communications challenges especially in a country like India requires local knowledge.