Doing Business in India: 
Meet the Growing Demand in Specific Sectors
By Dennis and Sandi Jones

India’s continuing economic reforms, vigorously promoted by the recently elected National Congress Party, promise to open up many new markets for Canadian businesses. The country’s urgent need for both urban and rural development means that major export opportunities exist in energy systems, transportation and urban infrastructures, environmental management and information technology.

Energy systems

To meet skyrocketing demand, according to the Confederation of Indian Industry (CII), India must add at least 100,000 megawatts of electrical generation capacity every year for the next 10 years. After factoring in the costs of transmission and distribution, this will require an overall investment of US$200 billion. Because the reforms have opened India’s electricity market to private-sector, foreign participation, Canadian power firms can now become players in this sector.

With respect to oil, CII puts India’s import dependency at around 69 per cent. As a result, the country is trying to increase its use of natural gas. This opens up possibilities for Canadian businesses that specialize in refining, storage and distribution technologies. Expanding deepwater oil and gas exploration is another area where Canadian expertise can find a market.

Transportation infrastructure

India has recently begun a $C24-billion project to upgrade and develop its road network, including 6,000 km of multi-lane highways connecting the major metropolises of Delhi, Mumbai, Kolkata and Chennai. Much more work is needed, however, just as it is for India’s seaports, which need upgrading to improve the speed with which they handle cargo. Railways and airports also require significant investments if they are to encourage India’s economic growth rather than hinder it.

Residential housing is another area where Canadian firms can help meet India’s need. With almost 30 per cent of its population living in cities, the country is the largest housing market in South Asia and is experiencing severe shortages of places for people to live. This translates into opportunities for Canadian companies that can provide products and technologies in this sector.

Urban infrastructure

The burgeoning growth of India’s urban centres is also placing a severe strain on the quality of the urban environment; as a result, Indians are concerned as never before about environmental problems. Especially needed are systems for water purification, waste and waste water management, air pollution control and low-emission urban transportation. India’s dependence on coal as an energy source also suggests a potential market for Canadian pollution-reduction technologies.

Information and communications technology

Information and communications technology (ICT) is one of India’s strongest sectors. The southern Indian state of Tamil Nadu alone trains 33,000 new IT workers annually, a major contribution to making India’s ICT industry one of the most advanced in the world. For Canadian IT firms, this affords opportunities in digital imaging, simulation software, network operating systems, system integration software and multimedia. India’s skilled labour pool also can make outsourcing attractive for some Canadian companies in the ICT services sector.

Challenges for Canadians

Doing business in India can, of course, present challenges. Indian companies are well-managed and aggressive, and can compete very effectively against Canadian firms. Indian buyers may also prefer the cheapest products over those of better quality, effectively cutting Canadian companies out of a market; moreover, the Indian bureaucracy can be difficult to deal with. These factors make it essential to have a reputable local agent or partner with whom the Canadian exporter can work.

Even so, given the right combination of an innovative product or service, effective pricing and long-term commitment, Canadian firms can look forward to succeeding in this vast, colourful and endlessly varied country.

You can find out more about the Indian market through Team Canada Inc's new India portal at canadaindiabusiness.ca. Or call Team Canada Inc's Export Information Service at 1 888 811-1119 to speak with an export officer about doing business in India.

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