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Most Indian entrepreneurs now want to go global on the first day. How good is the strategy to venture abroad?
It is encouraging to know that Indian entrepreneurs are looking beyond the shores of India. Every entrepreneur should look at global opportunities to source better quality and cost-effective products or to locate in external foreign currency markets for their products or for going in for technology transfer or learning the best practices. Despite the fact that India has got a huge market, there are many merits in venturing out as well. Of course, not at the expense of the domestic market, but having both of them side by side. In that regard, we are seeing a constant stream of companies coming out. Invariably when they do so, Singapore seems to be the location of choice to have your first staging post.
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Pradeep Menon
Chief Executive Officer Singapore Indian Chamber of Commerce & Industry (SICCI) |
How good is the presence of Indian companies in Singapore?
I think Singapore is home to most Indian companies than any other in the world. We have 3,500 plus companies in Singapore. There are companies coming out of India, basically majority-owned or controlled by personnel of Indian nationality. This does not include the companies in Singapore that are owned by people of Indian origin. If you add that, then it is a much bigger number. The reason why companies come out to be based in Singapore is because it is a stepping stone to the rest of the Asia-Pacific region. Even in ASEAN countries, with a population of 550 million people and a trillion dollar economy, if you put that collectively, it is a very attractive market. You can’t find a better channel to enter into this market than through Singapore. Within ASEAN there are tax concessions and a whole host of benefits. Today more than 50 percent of India’s bilateral trade with ASEAN flows through Singapore.
How could Singapore be helpful for Indian companies wanting to do business with China?
If you look at the trading relationships, one of the fastest growing is the one between India and China. That has grown from a mere $300 million perhaps a decade and a half ago to about $30 billion. Analysts who study the two economies say that if you look at the real potential, it should be around $100 billion by now. India and China are neighbors and they could have a lot of democratic similarities, but no two countries from a cultural and business standpoint can be further apart. The big players within the business fraternity would know how to go about tapping it. They will have their own resources. But there is a huge number of SMEs on either side, and those companies have to think how they can tap each other’s huge market. Because you are not familiar with the place, you don’t speak the language, and you don’t know the culture, so there is this perfect bridge called Singapore with which both the Indians and the Chinese are quite comfortable. If you go through Singapore, it makes the job a lot easier. Take the example of TCS, which spring-boarded into China through Singapore. It used Singapore’s manpower and expertise to get into China.
How important is it for companies to be present in Singapore? How does it help?
Singapore is home to over 10,000 MNCs. If you are vying to tap this as your customer, you cannot do it in India. You have to be in Singapore, especially companies in the IT sector. Singapore is not just a market. It is a hub, has the world’s busiest port, it is a hub for logistics, hub for finance with more than 1,600 financial institutions here. It is a hub for telecom, tourism, hospitality, education, healthcare, etc. Being a hub, if you are in these sectors, you have got to be where the core is. You got to have a presence there. If you are not, you cease to be a regional player, let alone a global player. That is the reason why companies are coming here. If they want to source, they can source it here in Singapore. If they want to sell, they come here. With excellent infrastructure and connectivity, this is an extremely conducive environment for business.
How easy is it to raise money for your business?
There is no such thing as free money, but it is a free market with a fairly easy environment. However, the onus is on the entrepreneur that he has a good business plan, a quality product and service and it is going to be a viable business. Money is available; it is a question of how you prove that you deserve that money. If you can put a plan together and can fund it yourself partially or find the money from your friends and prove that it’s doing well at the mezzanine or the phase two level, then there are plenty of institutions that have come in. The government has lot of schemes and grants to help but only after a certain track record has been built.
What role does the Singapore Indian Chamber of Commerce play?
We are a Singapore entity but we are focused on Indian businesses and naturally the ethnicity also has the roots back to India. So we have a predominant portion of our resources and attention focused on India. We help Indian companies of Indian ethnicity here in Singapore to grow and expand outwards towards India and the rest of the world. We also help Indian companies coming in from India to establish themselves here and go beyond. Then, we also help non-Indian companies, be it multinationals who are based here or the local Chinese companies to engage with India. As far as SMEs are concerned, we help them depending upon which stage of development they are in. For SMEs we run between 70-100 events annually.
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