Challenges and risks of doing business in India

India is a price-competitive market and price is an important consideration for consumers. You will be
expected to negotiate on the price for your goods and to discount. You must check what the import duty
is for your product in India to see if your export is viable. It’s likely to be a minimum of 35% once all
additional taxes are included. You should be aware of:

• multiple religious, ethnic and annual variations in holiday timings, requiring careful planning for
business trips

• barriers to trade and investment in some sectors because of regulatory constraints, local sourcing
requirements and import tariffs

• intellectual property protection (IP) • risk of delays due to administrative requirements

• difficulty of land acquisition

• access to the right skills in the local workforce

• infrastructure challenges, including for distribution and logistics

Language Consideration:

Language Consideration is a big barrier if we are trading in a foreign country. But As a neighboring
country, India is widely used English as their formal language. So it won’t be a problem for
Communicating with Indian people. India is hierarchical, even in the office situation. In meetings, small
talk, particularly about the family, is highly valued as you build a relationship. Important rules of
behavior include:

• using your right hand in all situations

• always having a business card to present Business and official contacts are addressed as Mr/Mrs/Ms or
Sri/Smt (Srimati) with surname. Refer to business superiors and those senior in age as ‘sir’ or ‘madam’.
Do not use first names unless invited to do so.

Contract Terms & Conditions:

Complying with HMRC regulations to export to India You must make export declarations to HMRC
through the National Export System (NES) to export your goods to India. You must classify your goods as
part of the declaration, including a commodity code and a Customs Procedure Code (CPC).

Risk That May Face Over there India:

▪ Country Risk: ➢ Lack of infrastructure and shortcomings in the education system ➢ Bureaucratic red
tape and persistent political tensions ➢ Net importer of energy resources ➢ Rising level of private firm
indebtedness ➢ Weak public finances ➢ Persistent uncertainties over the Kashmir issue
▪ Market Risk: ➢ Demand and Supply Risks ➢ Quantities, Qualities, Suppliers, lead time, interest rate
risks ➢ Raw material rates Interruption in the supply of Raw material ➢ Raw materials are procured
from different sources at competitive prices. ➢ Alternative sources are developed for uninterrupted
supply of raw materials Demand and supply are external factors on which company has no control, but
however the Company plans its production and sales from the experience gained in the past. ➢ The
Company tries to reduce the gap between demand and supply. ➢ Proper inventory control systems
have been put in place.

▪ Political Risk: ➢ Slow-down in government decisions due to political instability ➢ Adverse changes or
unpredictability on foreign investment, import, ownership, pricing or tax issues ➢ Cultural problems,
delays or legal disputes due to local partners and suppliers ➢ Labor unrest and industrial action ➢
Disruption of normal business due to social and political unrest ➢ Corruption and bureaucratic
inefficiency ➢ Unexpected delays and cost-overruns due to overlapping governmental jurisdiction ➢
Fluctuation in interest, inflation and currency rates

▪ Credit Risk: ➢ Risks in settlement of dues by clients. ➢ Provision for bad and doubtful debts. ➢
Systems put in place for assessment of creditworthiness of Customers. ➢ Provision for bad and doubtful
debts made to arrive at correct financial position of the Company. ➢ Appropriate recovery management
and follow up

Conclusion

Globalization has brought the world in one place. Due to mutual understanding among countries, the
trade barrier is being abolished in the world of business day by day. India and Sri Lanka will be the new
milestone of export business for N. Mohammad. Due to their favorable government policies and trade
policies with Bangladesh, it will be easier for N. Mohammad to export its goods to India and Sri Lanka.
Their political stability, supportive population, suitable geographical location, trade policy will make the
export of N. Mohammad Plastic Company easier and profitable. As globalization has allowed every small
businesses to dream of being a globally recognized brand. Our vision for the future is plain and simple.
We want the name N. Mohammad to compete on a global scale and enlighten the every corner of the
world, as they have in this country