India (official name “Republic of India”) is a federal parliamentary republic with a pluralist political party system and an independent judiciary. The Republic of India was proclaimed in 1947 and its constitution defines it as a “sovereign, socialist, secular, democratic” republic, currently comprising 28 union states and 8 union territories. The ruling party has been the Indian People’s Party (BJP) since 2015, headed by the current Prime Minister of India, Narendra Modi.

India’s foreign policy is based on an effort to maintain long-term peace and stability in the Asian region and the world, and to create favorable conditions and an environment for its own economic development. Therefore, India is trying to deepen cooperation and partnership with most countries in the Asian region, as well as with major world powers, especially the US, EU, China and Russia. India is focusing more intensively on the Pacific region (the so-called “Indo-Pacific”), developing cooperation with the countries of the SAARC and ASEAN regional groupings. India is also deepening its cooperation with the countries of the Persian Gulf, the Middle East and Africa.

The Indian economy in 2021 experienced strong economic growth of over 9% of GDP after the 2020 recession. Further strong growth of around 7-8% of GDP is expected in 2022. The problem is rising inflation (it exceeded 7% in April) and unemployment, disrupted supply chains and high energy and commodity prices on world markets. After the record budget deficit of 9.2% of GDP in 2020, the government’s finances will continue to be in the red in the following years, but the deficit is gradually decreasing (in 2022 it should be around 6% of GDP). Although the Indian economy, which for the first time reached a nominal GDP of USD 3 trillion in 2021, has many prerequisites for dynamic growth, it is burdened by numerous structural problems carried over from the past. Moreover, the Indian government has to face the current global economic challenges to sustain economic growth. Prime Minister Modi’s government presents itself as pro-reform – it shows an effort towards overall modernization, liberalization and privatization of the national economy and an influx of foreign investments. India has long managed to maintain a relatively low national debt thanks to a conservative fiscal policy. However, this has changed with pro-growth budgets and stimulus packages during the pandemic years, and according to some data, the debt could rise from the current approximately 60% of GDP to up to 90% of GDP in a short period of time.

India is one of the important trade partners of the Czech Republic in Asia with considerable growth potential. Czech-Indian economic cooperation has a long tradition and its roots go back to Czechoslovak assistance in the industrialization of the country in the last century. In the last 5 years, the trade turnover has been around 30-35 billion CZK, with a tendency of decreasing Czech exports and increasing Indian imports to the Czech Republic. In 2021, however, turnover reached a historically high value of CZK 45 billion, of which Czech exports to India amounted to CZK 19.4 billion, and Indian imports to the Czech Republic amounted to CZK 2billion. The drivers of Czech exports are machinery, telecommunications, chemicals and Czech glass and crystal. Imports are dominated by textiles, pharmaceutical products, electronics, metallurgy, chemicals, plastics, engineering, coffee, tea, spices and tobacco. Export opportunities are in fields such as the healthcare and pharmaceutical industries, automotive industry, civil aviation and defense industry, energy, mining and quarrying industry, ICT, agricultural and food technology or railway transport. Czech goods and services can succeed in the demanding Indian market, but they must be competitively priced, original and innovative, and must be advanced technologies and systems. In addition, their sale must be accompanied by a top advertising and marketing campaign.

Although India has improved (“jumped” from 77th to 63rd place in the World Bank’s “Ease of Doing Business” ranking in 2020), entering and successfully operating in the Indian market remains a challenge for foreign exporters. According to the World Bank, the weakest areas include the low level of enforceability of contracts, bureaucracy in setting up a business, tax collection and real estate registration. The main sales channels include the sale and distribution of goods through a local sales representative, online sales (e-commerce), direct selling or franchising, or licensing agreements. For corporate presence in the country, the legal forms of LLC (similar to our SRO), LLP, capital or share entry into an Indian company, establishment of a company branch, or creation of a joint venture with an Indian business partner are most often used.

Practical telephone numbers (emergency services, police, firemen, information lines, etc.)

• International phone code to India: +91
• Police: 100
• Firefighters: 101
• Ambulance: 102
• Anti-stalking: 1096
• Women Helpline: 1091
• Rape hotline: 01123370557

Important web links and contacts

E-Government India (National Informatics Centre): www.nic.in

Ministry of External Affairs: www.mea.gov.in

Ministry of Finance: www.finmin.nic.in

Ministry of Commerce & Industry: www.commerce.gov.in

Ministry of Corporate Affairs: www.mca.gov.in

Central Board of Excise and Customs: www.cbic.gov.in

Federation of Indian Chambers of Commerce and Industry: www.ficci.com

Information on investing in India (Invest India): www.investindia.gov.in

The Associated Chambers of Commerce and Industry of India: www.assocham.org

Confederation of Indian Industry: www.cii.in

All India Association of Industries: www.aiaiindia.com

PHD Chamber of Commerce and Industry: www.phdcci.in

Zauba Corp company information website: www.zaubacorp.com

Company information website India Ratings and Research (part of Fitch Group): www.indiaratings.co.in

Economic Times (Times of India) company information website: economictimes.indiatimes.com/news/company

Trade – Export/Import (India Mart): www.indiamart.com

Business – Export/Import (o4WorldBusiness): www.go4worldbusiness.com

Trade – Export/Import (Trade India): www.tradeindia.com

Company info (Dun & Bradstreet and Bisnode): www.bisnode.cz

Information on Special Economic Zones in India: www.sezindia.nic.in

The Embassy of India in the Czech Republic: www.eoiprague.gov.in

The Embassy of the Czech Republic in New Delhi: www.mzv.cz/newdelhi

The Ten Commandments for Doing Business with India

The PaulSourcing agency has prepared ten recommendations for doing business with India for Czech entrepreneurs interested in business relations with India. In 2020, it was supplemented with 4 current tips.

Ten for doing business with India below

4 recommendations for entering the Indian market during the coronavirus pandemic situation:

1. Getting to know the territory ofIndia is certainly a very interesting country and perspective market, offering a whole range of business opportunities. However, in comparison not only to Europe, it abounds in a whole range of specifics, which it is good to study and consider thoroughly before undertaking any activities connected with entering its market. In particular, it is important to note that compared to our environment, establishing a business relationship in India usually takes an incomparably longer time and requires a systematic, continuous approach. India is therefore not a suitable market for a quick solution to sales shortfalls.As a first step, it is good to familiarize yourself with India and its specifics, for example through summary territorial informationupdated by the Representative Office of the Czech Republic in India. Here, exporters learn general economic information and other facts that are needed to successfully enter the Indian market.
2. Import conditions and mapping the situation on the Indian marketAs a next step, the foreign office of PaulSourcing India (ZK India) recommends checking the conditions for importing goods into the country and carrying out a thorough mapping of the market situation. This mainly includes finding out import duties and taxes based on the HS codes of traded products, finding out any legislative restrictions on imports into India, finding out the situation within the given market segment and finding out the state of competition and ideally competitive prices. In the case of consumer goods, ZK India recommends visiting the Amazonor Flipkart portals for this purpose.The foreign offices of PaulSourcing Mumbai and PaulSourcing Bangalore will be happy to help you with this step, as well as with all others.
3. Search for business partnersThe next step is to search for suitable business partners. Depending on the intended business model, they can be importers, distributors, companies for various production and technological cooperations, sales representatives or end customers. For this, it is possible to use publicly available resources as well as paid company databases. Another option is to use a number of business associations that operate in India, as well as, for example, lists of exhibitors at trade fairs.In the case of cooperation with the PaulSourcing agency, thanks to many years of experience with the territory, foreign offices will help you find partners that best match your interests. This requires you to inform ZK India about your production, business plans and experiences with India and your target group. It is also advisable to send the so-called top 5 facts that distinguish you from the competition. Based on this information, ZK India will individually prepare a so-called “longlist”, i.e. a broader list of selected companies, which it will then send to you.
4. Selection and verification of priority companiesIn the next step, it is necessary to sort through the selected partners, select the most interesting ones and then approach them. Here it is very important to find out and reach out to the right person. In principle, this should be a person with the highest possible position within the company hierarchy. However, contact information for these people is not usually directly available to the public, especially for larger organizations, and it is therefore necessary to work your way through it.Another pitfall is the fact that Indian companies usually do not respond to e-mails, so it is necessary to support e-mail communication also by telephone.ZK in India are ready to help you with this step as well and thanks to the fact that they have a local workforce, even communication in Hindi is not a problem. This proves to be very beneficial, especially when communicating with lower level employees of Indian companies while making contacts for company management.In India, during the “corona crisis” and related restrictions, virtual meetings, for example through the Zoom or Skype applications, have become very widespread. Business negotiations at a distance are therefore definitely possible and certainly very desirable.In case of interest, after the relaxation of measures against the spread of the covid-19 disease and the calming of the situation in India, ZK India is able to arrange personal meetings between PaulSourcing office directors and Indian companies, during which it is possible, for example, to present the client’s company or hand over product samples to the Indian side. After the resumption of international air transport, there is of course the possibility to prepare a personal meeting of the client directly in India.Before establishing specific cooperation with Indian partners, the Ministry of Internal Affairs of India unequivocally recommends having these partners check whether there are no criminal proceedings against them, whether they have tax arrears, etc. The offices will help you with this too.

Ten Commandments for Trading with India

1. Prioritize a personal meeting Indians are very spontaneous in their dealings and usually want to meet as soon as possible or immediately. They prefer face-to-face contact, so it is necessary to budget for regular trips to India. Having a local consultant seems the most feasible.
2. Be sparing with emails Some Indian partners respond very laxly or not at all to email messages. If you cannot meet your partner in person at the moment, telephone contact offers a slightly better chance. India has the cheapest domestic telephony in the world and already a relatively large proportion of India’s urban population owns a mobile phone. In addition, many telephone exchanges are located in India, which call the entire planet in the service of various multinational companies.
3. Get Referrals In India, personal acquaintances and especially acquaintances in the business and political spheres play an immense role. Therefore, it is always better to come to the first appointment on someone’s recommendation.
4. Respond promptly to a change in date Arranging meetings is not always easy, as it is a rule that meeting dates change continuously. Indians often leave everything to the last minute and it is not an exception that appointments are only confirmed right before the meeting itself.
5. Bring a gift Negotiations are usually very cordial, Indian businessmen are very good at talking and will appreciate it very much when their Czech partner shows interest in their country and shows that they know something about it too. They like to give gifts and it is necessary to take this fact into account when visiting and stock up on traditional Czech gifts. For example, glass is always a success.
6. Address your partner formally During a meeting, addressing is mostly formal, although the Anglo-American way of addressing by first name is already beginning to appear in long-term business contacts.
7. Do not rely on the answer “yes “During negotiations, it is necessary to take into account that not every positive expression of the Indian partner will actually be fulfilled in the future, because it is not in the mentality of Indians to answer something “no”. And if they say “yes,” it can only mean “maybe.”
8. Avoid criticizing India’s conditions India is a country that has a vision to become one of the world powers of the 21st century. It is therefore necessary to keep in mind that Indian traders behave accordingly. They are self-confident, highly assertive and proud of the achievements the country has made. Therefore, it is not appropriate to point out some of the dark sides of the Indian society during the conversation.
9. Accept family invitation Indian partner likes to invite family. In Indian society, the family is an absolutely key unit and the meaning of life for many Indians, so an invitation to visit is an expression of confidence and a positive signal for future business. It is worth bringing a small gift to the visit. It is possible that you will not meet the merchant’s wife at all during your visit.
10. Prepare for protracted negotiations. Compared to Czech practice, the signing of a contract with an Indian partner is preceded by considerably long and often multiple negotiations, where any verbal promise does not necessarily mean a definitive end to negotiations. Therefore, it is not possible to count on the fact that a deal will be concluded during one trip or visit to the fair. It is recommended that the agreed contract be concluded in writing.