Enterprise Ireland expands Indian operations

27 August 2006   By Tom Sullivan

There was little fanfare last week when Enterprise Ireland opened its latest overseas office in New Delhi, India. Gabriel McCarrick, Enterprise Ireland 's Asia manager, is in charge of the new office.

McCarrick was posted to China in the 1990s and to the Soviet Union and eastern Europe after the fall of the Berlin Wall. He arrived in the Indian capital to humidity of almost 100 per cent, the regular power cuts that plague New Delhi in the summer, and a daunting task.

Increasing Irish business ventures in India 's fast-growing but over-regulated economy will not be a soft sell, he told The Sunday Business Post.

‘‘People are more attracted to authoritarian regimes like China and Vietnam,” he said, joking. ‘‘It is hard to get companies enthusiastic about India .

“The general experience is that it's a difficult place to do business so it's consigned to the category of ‘too much trouble.'”

However, with India 's software and services sector predicted to grow by 30 per cent this year and revenues of more than €30 billion expected in the country, he said there were big opportunities for Irish firms that did their homework and invested the time and resources.

‘‘India is the world's big service provider and Irish companies are big product-producers,” he said. ‘‘We have products which can enhance the services of the big players here like Wipro, Tata and Satyam.”

Investing in India can be fraught with difficulties, caused by crumbling airports and power grids, stark cultural differences and labyrinthine government regulations.

However, since Ireland's first major trade mission to the country last January, there have been growing numbers of joint ventures and licensing agreements between Irish small and medium-sized businesses and large Indian corporations in the engineering, biotech and, particularly, the IT and services sectors.

According to an Irish embassy source in Delhi , the presence of Taoiseach Bertie Ahern and senior ministers helped to open doors and kick-start business relationships in a country where hierarchy and decorum are everything.

Precise figures for the number of Irish companies making their way to India are difficult to obtain, but at least 60 firms are exporting to the country and almost 60 more are in the process of negotiating deals, according to industry sources.

Astec Global Consultancy, a former subsidiary of Eircom that has sales of just under €3 million, signed a joint venture immediately after the trade mission earlier this year and has since bought a 15 per cent stake in its partner firm in Bangalore .

The Dublin-based biotechnology firm Biotrin, with sales close to €11 million, recently signed a distribution deal to sell diagnostic equipment and is discussing opportunities with Indian partners to conduct clinical trials.

Irish firms are increasingly attracted to India's large multinational companies, where there is less resistance to buying in services from abroad.

Dublin-based software firm Softedge, which has 12 staff, signed a deal to sell its multimedia product to the IT giant Tata Consultancy Services.

Tata employs 28,000 IT consultants in 23 countries and boasts seven of the Fortune Top 10 amongst its clients.

Similarly, before it was sold to the US-based Compuware Corporation for $20 million last April, the Irish firm Steeltrace signed a deal with Siemens Information Systems in Bangalore worth more than €210,000 in the first year.

However, Enterprise Ireland 's new man in Delhi - who will divide his time between the country's other business capitals of Mumbai, Hyderabad and Bangalore - said that not all Irish firms were ready for India .

‘‘Sometimes we expect too much of companies, dragging them out to China , the US and wherever, before perhaps they have the legs and the stamina for it,” he said. He added that small and medium-sized firms often lacked the resources to break into the Indian market.

‘‘Any marketing operation out here requires stamina, resources and money,” he said.

However, there are big opportunities for companies with ‘‘good niche ICT products'', particularly in India 's growing telecoms and financial services sector, he said.

The Cork-based company Qumas, which has a turnover of more than €20 million, negotiated a reselling deal in India this year worth €1 million in the first year for its software product designed for the financial services and life insurance industries.

More than three-quarters of enquiries to Enterprise Ireland 's Asia desk are about outsourcing, but cheap labour is not likely to be the driver for future Irish ventures on the sub-continent.

‘‘Irish companies have a lot of experience in providing solutions to the Fortune 500 and can enhance the services most Indian back-office and technology firms are providing them,” said McGarrick, pointing to the growth of large Indian multinational companies.

‘‘But first we have to sell India to Irish companies. We have to convince them to expend resources in investing in India and that's not often as simple as it sounds.”