Blog: Dean BestIs investing in India all it's cracked up to be?

Dean Best | 21 November 2007

India remains a long-term prize in the ambitions of many food and retail multinationals.

This week, retail giants Carrefour and Metro have both spoken of their plans to expand in the country.

In recent months, the likes of Cadbury, Ferrero and Nestlé have unveiled plans to expand either their brand portfolios or manufacturing footprints in India.

The prize is India’s burgeoning middle classes, growing by the year and with rising disposable incomes to spend on Western-style goods in Western-style stores.

However, for all the optimism, foreign firms would be wrong to ignore the perils of operating in India. Overseas retailers are facing fierce opposition to their expansion. Sections of India are even against the growth of domestic retailers – just ask Reliance Retail.

And don’t be too pleased when you secure that (hopefully) lucrative contract with a local partner. Investing in emerging markets like India and China is fraught with unknown problems and what can at first seem a fruitful partnership can turn sour. Just ask Danone.


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