2010 India Trade Mission

This morning we met with the chief managing director of Eli Lilly India, Sandeep Gupta.  The delegation was greeted with large bouquets of flowers, lit candles and the tilaka (the name for the Indian dot) was placed on our foreheads.  It was most definitely a warm and friendly greeting.

The Lilly Indian facility was started in 1993 as a joint venture with Ranbaxy Labs.  They currently have over 430 employees and became a Lilly subsidiary in 2001.  Sixty percent of their portfolio focuses on diabetes and another 20 percent on oncology.

India does not yet have a comprehensive patent system.  They did pass a law in 2005 indicating that patents could be obtained and protected in India, but it's been a very slow implementation process.  As a result, there are very few patents, which can prevent companies, like Lilly, from having an even larger presence.

The cost of health care was a topic in this meeting.  The Indian leaders believe health care costs in the U.S. are higher because the U.S. spends a large amount of money on research and development, where most countries do not invest as much in finding cures.  Ninety percent of new molecules discovered are discovered by the U.S.

Of course, pharmaceuticals were also discussed.  Brand name pharmaceuticals are important in India.  The U.S. may have one brand name and several generic brands.  In India, they have multiple brand names and people pay a lot of money for the brand names.  Even with the focus on brand names, 650 million Indians have no access to any medicine – brand name or generic.  Likewise, 80 to 90 percent of Indians are without health care insurance.

We were able to learn about India during or visit to the Lilly facility.  India has approximately 1.2 billion people, four times the number of people in the U.S.  Sixty percent of the Indian population is less than 30 years old, so it's a very young country.  They feel like their current government is very progressive and they reward innovation and try to reduce bureaucracy.

I've mentioned the vast difference in the living standards in rural and urban areas.  Seventy-one percent of the population lives in rural areas and 29 percent live in urban areas.  Population growth is slowing, but the literacy rate is rising, particularly with women.

The impact of the global economy is much less significant on India than with other countries.  For instance, although the global economic downturn affected India, it did not impact it nearly as negatively as some other countries.  India does not have a heavy reliance on exports.   They rely on their own domestic consumption.  They are "domestically led," which means they are somewhat insulated from global downturns and are much less volatile.

India has the fourth largest economy in the world.  In 2014, they expect to pass Japan and become the third largest economy.  Fifty-five percent of their economy is service based.  Their economy used to be 25 percent agriculture, but that's down to 19 percent.  The percentage involved in manufacturing has also decreased, but the service industry has increased.  They compare and contrast themselves frequently to China.  They point out that a large part of China's economy is manufacturing.

While at Lilly, we had a “town hall” type of meeting with the employees and local leaders.

After we left Lilly, we met with Vilasrao Dagadojirao Deshmukh, the minister of heavy industries and public enterprises for the government of India..  He talked about the various industries the government is involved in.  They are running airlines, making watches, running utilities, and a lot of other industries started because of a void from the lack of interest in private companies.  The government is competing with the private sector.  They are in a position now of turning some of these government initiatives into joint ventures and public/private partnerships.

Later in the day, we met with a senior partner in the Indian law firm of Seth Dua and Associates.  The firm has 34 attorneys, which by India’s standards is mid-sized.  Comparatively, Ice Miller has over 250 attorneys.  In India, you must be an Indian lawyer to practice law.  Several of the large law firms recently got into trouble for practicing law when they were not licensed to do so.   U.S. attorneys cannot even advise Indian companies.

Next we met with the minister of urban development, Jaipal Reddy.   The government is taking the problem of housing for the poor very seriously, although this is an overwhelming issue.

This evening there was a reception for the delegation.  The food was fantastic.  It poured down rain, but within a few minutes the heat had dried up all the moisture.

On the very last day in India we were able to visit the tomb of Mahatma Gandhi.  It was a solemn place.  Gandhi derived most of his principles from Hinduism, but believed all religions to be equal.  He was an avid theologian and read extensively about all major religions.  As we left the tomb, I was surrounded by Indian families who wanted to take pictures with me and their children.  I assume it was unusual for them to see the western attire and blonde hair.  There was a high terrorist alert so we were unable to visit any other locations.  We were advised to stay in our hotel, especially me as a blonde female.  It made me realize how I can take for granted how safe we are in the U.S.

We are now on our way home!  I’m ready to be back in Indiana, but I look forward to applying the lessons from this trip to helping Indian companies have even more economic success.

The trade delegation visited Agra, India today.  Agra has a substantial industrial base.  Many manufacturing plants and industry related wholesale markets are prominent here.  In addition to learning about these economic contributors, we were also able to see first hand how the city handles tourism and its impact on Agra's economy.  We were able to visit one of the seven wonders of the world, the Taj Mahal, also known here as "the Taj."

The Taj Mahal has a very important role in the economic viability of Agra.  This magnificent masterpiece attracts from two million to four million visitors each year.  More than 200,000 of those visitors come from overseas.

The Taj Mahal was built by Emperor Shah Jahan as a mausoleum for his third (and favorite) wife, Mumtaz Mahal, who died during the birth of their 14th child.  Construction for the mausoleum began in 1632 and was completed in 1653.  It serves a reminder of the great love story between Shah Jahan and Mumtaz Mahal and what a beautiful reminder it is.

The mausoleum is made completely out of white marble.  The marble is translucent so that, depending on the time of day, it either reflects a pink or white hue.  Within the mausoleum, there are beautiful flowers and vines made up of precious jewels which come from all over the world.  When light hits the flowers, you can see all different shades of red, orange, yellow, green and pink.

The Taj Mahal is built along the banks of the Yamuna river and has two smaller castles on either side.  It is amazing.  I am astounded when I think of the amount of labor and craftsmanship it took to create this piece of art.

On our way to Agra we visited remote areas of India, which have a completely different standard of living than the large cities.  There are wild monkeys everywhere.  When we were at a stop sign or toll road, the monkeys would climb on our vehicle.  There are also wild boars and cows walking around.  Along the rural streets we saw things Americans are used to seeing inside of a home: sleeping, eating, taking a bath, shaving, washing clothes, getting a haircut.  There are a lot of vendors on the street who sell fresh fruit and vegetables.  Refrigeration isn't common in the rural areas, so the street vendors play an important role in supplying fresh produce.

The rural areas also don't have running water.  They use water from the rivers for their daily needs.  It's a very hot time of year and the rivers are very low.  Because of that, you can actually see the trash and pollution in the water.  That was very sad.

In some of the mid-sized cities, cows are in the middle of the road.  We had an interesting experience when a man came up to our bus playing his flute.  He was charming a snake to come out of its container.

I've blogged about some of my thoughts about India and its culture, but I also want to include comments from a few of my fellow delegates.

Bryce Bennett:
The delegation went to Agra today to look at tourism and how the economy can be improved by creating opportunities for employment in the tourism industry.  We saw the different sides of India along the way, from the grand Taj Mahal to the poverty in the slums and the unfortunate living conditions to the environment that has been spoiled along the Indian highways.  It has been a very rewarding experience to learn more about the Indian culture.  We look forward to bringing the ideas and thoughts that we have generated from our trip back to Indiana, and Indianapolis in particular, for the benefit of our citizens.

Sanjay Patel:
We took a trip to Agra today, leaving Delhi around  6 a.m.  From a large city, the nation's capital, we drove through the rural agricultural areas.  We saw the big city lights and were able to compare it to the rural life and heart of Indians working day in and day out just to make it.  We ended up at the Taj Mahal.  I've seen it twice before, but it was much more special this time.  As an adult I can appreciate the true history and architecture of it and the work that went behind it.  We've had the opportunity to really take in what this country stands for.  My parents are from India, so I've been here several times.  This particular trip has opened my eyes on the economic opportunities we can bring back to Indiana.

This morning the delegation met with the Confederation of Indian Industry, which is an entity similar to a Chamber of Commerce.  During this meeting we talked with the executive director of Mahindra, Arun Nanda.  Mahindra is a $6.3 billion company that employs over 100,000 people across the globe.  They manufacture and market utility vehicles and tractors.  They also have a significant presence in information technology (IT), financial services, tourism, infrastructure development, trade and logistics.  The company has three plants in the U.S. (Texas, Tennessee and Georgia) that manufacture tractors and they cater to what they call the "hobby farm market."

We then met with members of the Bombay Chamber of Commerce and Industry, and Dr. Atindra Sen, director general of the chamber. The chamber was established in 1836 and is the oldest chamber in India.  The chamber has 20 subcommittees that focus on different segments of industry such as legal affairs, agribusiness and international trade.

During my conversations with Indian business leaders I've observed that clean technology and "green" or environmentally friendly practices are not widely used in India.  This may be an opportunity for various industry segments within the U.S. to bring their expertise to this market.

What this market is very interested in is quality.  This has been a shift partly because labor costs are increasing and, as a result, product quality has become a focus. 

We've also talked a great deal about the Indian legal system.  In general, the legal system is not highly trusted and people believe someone's word is sufficient to reach an agreement.  The legal system is based on common law and has been largely influenced by the British rule, so it's very similar to our system; however, there are some differences.  They have no juries and no tort law.  Areas such as real estate, corporate, commercial or most types of business transactions are very similar to the U.S. which make it desirable for U.S. companies to want to do business here.  An interesting fact I learned about the court system is that the India Supreme Court is clogged with property cases and it would take approximately 300 years to handle all of the property cases on the current docket.

I referenced a study by Dr. Geert Hofstede on intercultural business communications in my last post.  One area he studied is the Power Distance Index (PDI).  The PDI is a reflection on how much a culture does or does not have hierarchical relationships and respect for authority.  As I've mentioned, India places great importance on hierarchy.  For countries with a high PDI, like India, the study says that people can expect to encounter more bureaucracy in organizations and government agencies.  The property case backlog in the India Supreme Court is a prime example of this indicator.

After the meetings, we went to the Gateway of India, which is a monument located on the waterfront in the Apollo Bunder area in South Mumbai.  The Gateway is an 85 foot high arch.  It was used by fishermen as a jetty and later renovated to be used as a landing place for British governors and other dignitaries.  The arch combines both Hindu and Muslin architectural style and is striking.

During my visit I've come to appreciate many beautiful aspects of Mumbai.  The city lies on the Arabian Sea and has stunning views.  The Bandra Worli Sea Link bridge enhances the beauty of this coastline.  The bridge was recently completed and took six years to build.  It is an operator billed bridge, which means an operator provides the capital to build the bridge and owns it for a certain number of years, possibly 10 years or more, and gets the toll money that then pays for the building of the bridge.

Although Mumbai is a beautiful city, the traffic and congestion hinder its appeal.  Traffic is so bad that very large corporations use helicopters to transport people locally rather than dealing with the traffic.  Because it's so crowded and congested, it's acceptable to be late for appointments, although it's more acceptable to be late when you're meeting with government officials than corporate leaders.  People also honk constantly.  Honking is not considered rude and is used as a way of letting someone know that they're close to you. 

So with all the stress from traffic, how do people relieve the tension?  One way is cricket.  Cricket is the number one sport in India and it's everywhere.  If you go by any park, there are always people playing cricket.  As I mentioned in my last post, it's summer here and the temperature is about 106.  It's incredibly humid and very hot and people are still outside playing cricket!

Today, the delegation met with the mayor of Hyderabad, Mrs. Banda Karthika Chandra Reddy.  Interestingly, Mayor Reddy was a homemaker prior to being elected to her position in 2009.  Although her husband has been involved in politics, she essentially had no political experience.  She and I discussed at length women and politics in India.  It is very common to have women in high-ranking political positions and it is not uncommon for these women to have been homemakers prior to their political roles.  There is a lot of family and cultural support for women in positions of authority and leadership and it is culturally acceptable for these women not to have had previous experience.  There are many prominent women in medicine, teaching and government as well as politics.  In fact, one of the most popular Indian prime ministers of all time was female, Indira Priyadarshini Gandhi.

India scores low, compared to the U.S., in an individual's personal identity revolving around themselves (based on research done for Professor Geert Hofstede's Cultural Dimensions).  Because the Indian culture tends to have a stronger sense of responsibility for family, it's appropriate that they support those who have been in "care taker" positions before shifting into more business or political roles.  The rights of the family (or common good) are usually more important than the aspirations of the individual.

Hyderabad is the financial, economic and political capital of Andhra Pradesh (India's fifth largest state by population) and is known as the "City of Pearls."  It is the most populous city in Andhra Pradesh with a population of over four million.  Andhra Pradesh has a population of eight million.  Hyderabad is the biotechnology and pharmaceutical center for India, as well as being a major hub for the information technology (IT) industry.  Many American companies have a strong presence in Hyderabad including: Microsoft, Accenture, ADP, Google, GE, IBM, Motorola and Hewlett Packard.

We also met the Chief Minister of Andhra Pradesh, Konijeti Rosaiah.  His role is similar to that of our governor.  I've noticed when you're greeting someone it is very common to either shake hands or put your hands together and bow down slightly to the person.  In one of the meeting rooms there was a huge, almost life-sized, picture of Gandhi.  There were many things discussed in our meeting, including: IT, biotechnology and tourism.  One of the other issues we discussed was the importance of having direct flights from Hyderabad to the United States, specifically Indianapolis.

An interesting thing I learned while talking to Hyderabad's city manager was that traffic is under the control of the state police.  Traffic has become a major issue and is wildly chaotic.  There are no stop lights or stop signs and everyone is weaving in and out of everywhere - cars, scooters, motorcycles and motorized rickshaws.  One of the only traffic control devices they use are roundabouts.  The city has absolutely no authority over traffic and can't do anything to get it under control.  The officials we met with were shocked to learn that we have city police and fire.  They were amazed that from a budgeting standpoint the mayor is able to manage both.

There aren't strong restrictions on who can obtain a license and mass transit is not very popular, although it has taken off in a few cities like New Delhi.  In general, the people, similar to Americans, like driving their own vehicles.  When there is mass transit, capital expenditures are covered by the private sector and the costs of operations are handled by the state. 

The trade mission is occurring in the middle of summer, so it's very hot (about 102) and very humid.  The heat hasn't deterred my excitement of the trade mission and culture.  The Indian people have been very welcoming and very warm.  There has been genuine excitement about the trade mission.  Hyderabad had previously been talking to U.S. cities like New York and Chicago.  They've now begun building relationships with Indianapolis.

In the evening we traveled to Mumbai.  I would make the comparisons that Hyderabad is like Chicago and Mumbai is like New York City.  New Delhi, which is where we're headed after Mumbai, is similar to Washington, D.C.  Mumbai is densely populated and there was business establishment after establishment from the airport to our hotel.  There are stores with open fronts where merchants are selling food, clothing, jewelry and Internet services.

Tomorrow, we meet with numerous government and business officials.  I'm looking forward to visiting the "Gateway of India" and the "Indian Railways."  The Indian Railway system is considered to be one of the most efficient rail systems in the world.
 

Indianapolis mayor Greg Ballard and the 14-member delegation have arrived in Hyderabad, India, and have begun meeting with various government and business leaders.  I will be joining the delegation at the end of the second day.

In preparation for this trade mission, I've spent time researching cultures and customs of India, in addition to time spent looking at business opportunities.  I will include more information about specific business customs later in the blog, but in this posting I'm providing a brief overview of a few things I have learned about Indian culture.

As a result of its heritage and traditions, Indian culture places a strong emphasis on hierarchy.  Every relationship – business and social – has a clear hierarchy that is expected to be observed.  In business, the boss is seen as the source of ultimate responsibility.  When in meetings, the delegation will greet the most senior or eldest person first.  Each person must be bid farewell individually.

Indians often associate themselves more with the groups they belong to than their individual status.  A person may be affiliated with a specific state, region, city, family, career path, religion, etc.  This group orientation derives from the close relationships that many Indians have with their family, including extended family.  This group association creates various interrelationships and customs.

As a result of the group association, many Indians prefer to have long-standing relationships with a person prior to doing business.  This trade mission will enhance the foundation of Indianapolis' relationships with the cities we'll be visiting.  In India, meetings can have a great deal of "getting to know you conversation."  This further illustrates the importance they place on dealing with people they know.

Tomorrow the delegation will meet with the mayor of Hyderabad and the Sister City Ceremony will take place.  I look forward to sharing information about this wonderful event!