PUBLIC POLICY ADVOCACY 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. Today, 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 increasingly Indian organizations are 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 engaging in 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-economic 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 approach, 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 bureaucrats, 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 level 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.

Addendum

The practice of government relations in India is in its infancy and therefore not highly developed or well understood. There’s no term, title or job title that quite fits the role or function. People don’t use any one word to describe Government Relations because the space itself has not been defined.

India’s Government is approachable and the political process is open. Like in most places,  government relations is very relationship driven. Who you know counts for quite a lot. Also trust and credibility are everything. Influence comes from knowing the right people, understanding the rules of the game and how to use these rules, and making the right approach at the right time in the right way.

Corruption is lessening and the government is working feverishly to address perceptions of corruption.

It’s important to have in-house government relations people because that’s how most of the large Indian companies e.g. Tata, Reliance Group operate. They typically have a strong in-house team of government relations people. Establishing a coordinated government relations function in India is increasingly the best route to pursue.

Because New Delhi is the seat of India’s federal government, many companies establish a government relations office there. However, companies  should consider the realities of their industry before deciding where to base the function. Some industries are under the purview of state governments, others are regulated by the central government and some fall under the jurisdiction of both. Companies operating within Special Economic Zones usually interact mainly with state governments and may have little involvement with the central government once the SEZ approval process is complete.

Developing relationships with state and local officials is just as important, but too often overlooked. Frequently, local governments are sensitive to the potential for grassroots activism against a particular corporate initiative but may not be quite so aware of the advantages that multinationals can bring to a community. By engaging with local officials, companies can properly explain the value-add, and this may prove a huge boon in the long run.

Government relations professionals should go slowly, making sure they truly understand the terrain. In India, personal connections count and government officials and private entrepreneurs want to establish real relationships with the individuals they’re meeting.

Securing a meeting with a government official in India is not that difficult. There are many open doors. Almost any multinational that seeks an appointment with a government official in India gets it almost immediately. High-level officials, are very educated and erudite. They’re comfortable talking to industry, and they’re willing to share their views and to agree or disagree with what’s being said. In contrast, the middle level of the bureaucracy has a tendency to avoid speaking to the private sector due to disinterest, insecurity or even fear.

What is difficult, is accomplishing precisely what you set out to achieve. When making one’s case to an Indian government official, statistics and research reports can help but they rarely seal the deal. Government officials in India are also attuned to the messenger. It’s important to send a suitably senior member of a company’s team to speak with a government official. In addition, it’s highly desirable to have an Indian native or someone of Indian descent do the communicating. Government relations should be Indian. This is especially true in India because of a strong sense of nationalism and of being a country that was formerly a colony. It is also important because Indians are far more sensitive to cultural nuances necessary for business deals and long time business relationships.

Striving for outcomes and results is fine, but government relations is a sensitive area where reputations are made and broken. The process and the underlying approach to government relations is as important as the outcome. Ultimately, it’s the cumulative effect of all the efforts undertaken that counts.

Industry associations carry particular clout in India because so many companies are reluctant to be a lone voice, highlighting a particular issue to the government on their own. There is a certain mindset in government that if an argument comes only from one company, even if it’s the best of logic, there’s a hesitation to change anything. That’s where industry associations give the government an ability to act. It’s much more effective to go in partnership with an Indian organization, get their advice and put things from an Indian perspective.Participating in industry associations is necessary for advancing a company's case with government, it's also a way for government relations professionals to raise their profile and gain credibility.

This said , while industry associations and coalitions can pave the way for change, companies need to make their unique case to the government on their own terms. More often than not, it’s most effective if companies speak to the government because industry associations can’t talk about any specific  company.

Companies usually rely on consultants to learn “the lay of the land” before pressing their cases directly with government officials. The Indian government likes to see the face of the person who wants the change. 

The asking or seeking element of government relations cannot be more than 20 to 25 percent of one's total interactions. The other 75 to 80 percent is being viewed as a valuable partner and contributor on a range of issues.

Media in India can be a terrific asset, because it can put pressure on some issues, but it is also a strategy that sometimes backfires.

More than anything else, experts on India urge government relations professionals to be patient and to take a long-term view of the evolving relationship. In India, relationships are ultimately everything. A short-term mentality won’t work in India because India’s political system simply doesn’t allow it. In India, the wind changes very fast, much faster than it changes in the U.S. or in Europe. Companies with the diligence and patience to build relationships slowly, meeting regularly with government officials and gradually developing a mutual understanding of vital issues, will ultimately succeed.

Relationships don’t happen over one cup of tea. They happen over time. India is an important market. You need to be invested there for the long term.