Page last updated at 07:52 GMT, Friday, 27 June 2008 08:52 UK

Long-term key to Indian success

By Gillian Marles
BBC Scotland

Sir Bill Gammell
Sir Bill Gammell and Cairn built their success on good relationships

Gillian Marles reflects on the opportunities and challenges of doing business in India.

Scottish companies must be "bold, brave and persistent" if they are to be successful in India, according to the head of the Edinburgh-based oil and gas exploration group, Cairn.

Speaking after the AGM of Cairn India in Mumbai, Sir Bill Gammell said: "If you have long-term goals and long-term objectives and you work with communities, it's a fabulous place to do business."

Scottish economic development bodies are encouraging more Scottish firms to consider doing business with and in India.

The country has one of the fastest growing economies in the world and is expected to match the US economy in size by 2050.

The Cairn group has been one of the most successful Scottish companies doing business in India.

Mumbai construction site
A labourer at a construction site in Mumbai

Cairn first became interested in the early 1990s. Sir Bill Gammell said India was being overlooked.

He added: "The major oil companies had only drilled 12 wells in India, whereas they'd drilled 8,000 in South East Asia".

It took nearly a decade before Cairn made a significant strike.

The energy journalist, Richard Orange, said Cairn is a good example of what it takes to do business in India.

"By the time they made the strike, they'd already had all the relationships they needed with the local government and with the ministry," he added.

'Good relationships'

The need for firms to foster good relationships is a point stressed by Michael Cannon in Delhi.

He is the country manager for India with Scottish Development International, an economic body which helps companies trade overseas.

He said: "Come to India and build relationships, you need to experience the size and scale of the opportunity here."

SDI has identified four areas of the Indian economy with the most potential for Scottish firms: energy; infrastructure; consumer goods and education.

Enquiries are coming in on a daily basis to Michael Cannon.

It's easy to think we're at home and everything works like it does in the UK, which is definitely not the case. Relationships have a lot more importance."
Richard Orange
Energy journalist

He said: "The heartening thing is it's both sides of the economy. It's manufacturing and services".

The telecoms and construction sectors have seen the most overall foreign interest so far.

The Edinburgh-based architecture company, RMJM, recently announced it had just reached its target of 1bn worth of construction projects in India. The practice is now looking at setting up a permanent office in Mumbai.

Doing business in India is not without its difficulties.

Poor roads can add hours on to a journey. Energy shortages mean there are power failures in outlying districts of the major cities.

And Richard Orange says there are cultural differences which many companies are slow to recognise.

He added: "In India, the business class are incredibly Anglicised and it's easy to think we're at home and everything works like it does in the UK, which is definitely not the case. Relationships have a lot more importance."

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