5 good reasons to highlight our Indian debt collection partner

You might not yet have thought about possible interesting business opportunities in this gigantic country? Well maybe you should! Concerns about potential problems like unpaid invoices in India or other obstacles might cause you  missing the boat of its progress – the last decade driven at a dizzying pace. Or maybe you are already active in the area, but you would like a reliable partner in debt collection to have your back? Then you are at the right address!

Rising Elephant India, as Ashutosh Sheshabalaya (founder of the International network company IndiaAdvisory in our own backyard Hainaut) describes the country, does not need an introduction. Or as professor Salvatore Babones labels India in Forbes as “a country of contrasts”.  Perhaps we also have to add a new sort of reflection to the typical list of colours, flavours and customs that automatically pop up in our mind when we think about India. What about a country of huge possibilities for (Western) businesses? In that case, our local partner, MNS Credit Management Group, can offer support to Belgian gold diggers.

Let’s briefly list up the most important Indian evolutions and their economic impact:

1. India will soon be the country with the largest population

India will soon (if not already) be the country with the largest population, following China on its heels. But unlike China, and many Western countries, India is not yet suffering from an ageing population and its active, young population is growing faster than the total population. This young guard also receives an increasingly better education. Increasing incomes will result in a broader middle class and higher purchasing power. So India might therefore become a (larger) potential market for your product or service than you initially considered.

2. India, a multi-faceted country

However, we should use the term middle class with some caution. Rob Rühl, ING economist and author of The India Challenge report, predicts that by 2020 only 50 million Indians will earn $10 000 or more ( a year). And there are huge regional differences. Babones even writes that we can only talk about a middle class in India when all states in the country can enjoy the Incredible India Economy at the same level. India’s current Prime Minister, Narendra Modi, promises to work on this in detail with his election slogan Sabka Saath, Sabka Vikas (together with all, progress for all). For example, he wants to bring electricity to all Indians through mass investment in solar energy. Now tens of millions of inhabitants still have to make do without electricity.

• With more than 1.3 billion inhabitants and almost as many rituals, religions, cultural, but also economic and – as mentioned above – regional differences, you can imagine that the diversity is immense in the vast country. As an outsider, it is extremely difficult to take the right approach when it comes to handling sensitive issues such as claiming unpaid invoices in India. It is therefore useful to have a professional local partner on site, such as our TCM partner MNS Credit Management Group. This debt collection partner, based in Delhi, started its activities in 1999 and employs more than 100 people who, in cooperation with TCM Belgium, can ensure a personal follow-up of your receivables.

3. India has a large pool of labor force

In addition, the growing young population, yearning for progress, also creates a larger pool of labor force. Considering aligning your product with that Indian middle class might lead to an immediate increase of potential sales, according to Rühl, but with the condition that production also takes place in India. Because your product needs to be adapted to the Indian market, and therefore it is also convenient to produce on site. In the opposite direction, labor costs in India are low, but product optimization has been the trend since the 1990s. The country is the right breeding ground to feed both import and export opportunities to or from India. The chance of breaking even in India within a few years is very high, according to Rühl, at least when companies adapt to local customs.

4. India is innovating

In turn, many Indian companies (such as Tata Group or Mittal Steel, now ArcelorMittal) have found their way into the Western world and, thanks to IT innovations and highly-skilled management talent (often placed in Western top positions), have created great added intellectual value. Vice versa (according to Sheshabalaya in Trends) “India’s top private companies have perfectly understood that we are evaluating from a global economy based on products for Western consumers, to a model with mass production in which price is all-important, with a big scoop of innovation”. Cheap, but innovative, products with small margins but large volumes.

• Among its hundreds of clients, MNS Credit Management Group can count leading financial institutions and banks in India, credit insurers, international conglomerates from various sectors, publishing houses, companies in logistics and shipping, exporters, importers, IT and communications companies, companies that carry out fast-moving consumer goods procedures, etc. So there is undoubtedly also room to take your company under their wings and provide a proper specialized service, tailored to the local culture.

5. Fewer political barriers than other emerging Asian nations

Entrepreneurship in India has fewer political barriers compared to other emerging Asian tigers. India is a democracy, with a strong American connection and a developed legal system. For example, there has been much controversy worldwide about the recent progress made under the Insolvency and Bankruptcy Code at the NCLT (National Company Law Tribunal), including addressing unpaid corporate loans. According to The Economic Times, this reform has contributed to India’s leap into the World Bank’s ease of doing business rankings (23 places up to 77th position).

• Despite the relatively safe trading environment, it is still important not to get lost in the legal and administrative landscape of the amicable and judicial trail. For example, it is important to know that the statute of limitation for claims is 3 years and that payments in cash or by cheque cannot be collected by a lawyer/agency for a foreign account. There is no Trust Account system in India. The payment is transferred directly to the exporter’s bank account. Besides the NCLT there are of course several other tribunals, where our partner can guide you in the best direction.

• Also useful to know: depending on the existence or non-existence of a mutual treaty between the countries concerned, a decree/judicial order of a foreign court can be enforced. To make things easier (both amicably and legally), it is important to have the following documents: an order form, copies of the outstanding invoices, transport documents, possible documents recognizing the debt, relevant (e-mail) communication between debtor and creditor.

• A few final tips from our local partner to simplify the trade: consider using solvency reports and recommendations from third parties before closing a deal, and possibly have your goods inspected in advance by an independent inspection agency.

The above list contributes to India’s position as the fastest growing economy in the world. Soon India will become the fifth largest global economy. Economists even predict that in the coming years India will cross Germany and thus take fourth place behind the US, China and Japan.

If you have any questions or would like to know more about our debt collection partner in India, please contact us via 016 74 52 00 or email us at info@tcm.be . And don’t forget to take a look at our PointDrive

5 good reasons to highlight our Indian debt collection partner

You might not yet have thought about possible interesting business opportunities in this gigantic country? Well maybe you should! Concerns about potential problems like unpaid invoices in India or other obstacles might cause you  missing the boat of its progress – the last decade driven at a dizzying pace. Or maybe you are already active in the area, but you would like a reliable partner in debt collection to have your back? Then you are at the right address!

Rising Elephant India, as Ashutosh Sheshabalaya (founder of the International network company IndiaAdvisory in our own backyard Hainaut) describes the country, does not need an introduction. Or as professor Salvatore Babones labels India in Forbes as “a country of contrasts”.  Perhaps we also have to add a new sort of reflection to the typical list of colours, flavours and customs that automatically pop up in our mind when we think about India. What about a country of huge possibilities for (Western) businesses? In that case, our local partner, MNS Credit Management Group, can offer support to Belgian gold diggers.

Let’s briefly list up the most important Indian evolutions and their economic impact:

1. India will soon be the country with the largest population

India will soon (if not already) be the country with the largest population, following China on its heels. But unlike China, and many Western countries, India is not yet suffering from an ageing population and its active, young population is growing faster than the total population. This young guard also receives an increasingly better education. Increasing incomes will result in a broader middle class and higher purchasing power. So India might therefore become a (larger) potential market for your product or service than you initially considered.

2. India, a multi-faceted country

However, we should use the term middle class with some caution. Rob Rühl, ING economist and author of The India Challenge report, predicts that by 2020 only 50 million Indians will earn $10 000 or more ( a year). And there are huge regional differences. Babones even writes that we can only talk about a middle class in India when all states in the country can enjoy the Incredible India Economy at the same level. India’s current Prime Minister, Narendra Modi, promises to work on this in detail with his election slogan Sabka Saath, Sabka Vikas (together with all, progress for all). For example, he wants to bring electricity to all Indians through mass investment in solar energy. Now tens of millions of inhabitants still have to make do without electricity.

• With more than 1.3 billion inhabitants and almost as many rituals, religions, cultural, but also economic and – as mentioned above – regional differences, you can imagine that the diversity is immense in the vast country. As an outsider, it is extremely difficult to take the right approach when it comes to handling sensitive issues such as claiming unpaid invoices in India. It is therefore useful to have a professional local partner on site, such as our TCM partner MNS Credit Management Group. This debt collection partner, based in Delhi, started its activities in 1999 and employs more than 100 people who, in cooperation with TCM Belgium, can ensure a personal follow-up of your receivables.

3. India has a large pool of labor force

In addition, the growing young population, yearning for progress, also creates a larger pool of labor force. Considering aligning your product with that Indian middle class might lead to an immediate increase of potential sales, according to Rühl, but with the condition that production also takes place in India. Because your product needs to be adapted to the Indian market, and therefore it is also convenient to produce on site. In the opposite direction, labor costs in India are low, but product optimization has been the trend since the 1990s. The country is the right breeding ground to feed both import and export opportunities to or from India. The chance of breaking even in India within a few years is very high, according to Rühl, at least when companies adapt to local customs.

4. India is innovating

In turn, many Indian companies (such as Tata Group or Mittal Steel, now ArcelorMittal) have found their way into the Western world and, thanks to IT innovations and highly-skilled management talent (often placed in Western top positions), have created great added intellectual value. Vice versa (according to Sheshabalaya in Trends) “India’s top private companies have perfectly understood that we are evaluating from a global economy based on products for Western consumers, to a model with mass production in which price is all-important, with a big scoop of innovation”. Cheap, but innovative, products with small margins but large volumes.

• Among its hundreds of clients, MNS Credit Management Group can count leading financial institutions and banks in India, credit insurers, international conglomerates from various sectors, publishing houses, companies in logistics and shipping, exporters, importers, IT and communications companies, companies that carry out fast-moving consumer goods procedures, etc. So there is undoubtedly also room to take your company under their wings and provide a proper specialized service, tailored to the local culture.

5. Fewer political barriers than other emerging Asian nations

Entrepreneurship in India has fewer political barriers compared to other emerging Asian tigers. India is a democracy, with a strong American connection and a developed legal system. For example, there has been much controversy worldwide about the recent progress made under the Insolvency and Bankruptcy Code at the NCLT (National Company Law Tribunal), including addressing unpaid corporate loans. According to The Economic Times, this reform has contributed to India’s leap into the World Bank’s ease of doing business rankings (23 places up to 77th position).

• Despite the relatively safe trading environment, it is still important not to get lost in the legal and administrative landscape of the amicable and judicial trail. For example, it is important to know that the statute of limitation for claims is 3 years and that payments in cash or by cheque cannot be collected by a lawyer/agency for a foreign account. There is no Trust Account system in India. The payment is transferred directly to the exporter’s bank account. Besides the NCLT there are of course several other tribunals, where our partner can guide you in the best direction.

• Also useful to know: depending on the existence or non-existence of a mutual treaty between the countries concerned, a decree/judicial order of a foreign court can be enforced. To make things easier (both amicably and legally), it is important to have the following documents: an order form, copies of the outstanding invoices, transport documents, possible documents recognizing the debt, relevant (e-mail) communication between debtor and creditor.

• A few final tips from our local partner to simplify the trade: consider using solvency reports and recommendations from third parties before closing a deal, and possibly have your goods inspected in advance by an independent inspection agency.

The above list contributes to India’s position as the fastest growing economy in the world. Soon India will become the fifth largest global economy. Economists even predict that in the coming years India will cross Germany and thus take fourth place behind the US, China and Japan.

If you have any questions or would like to know more about our debt collection partner in India, please contact us via 016 74 52 00 or email us at info@tcm.be . And don’t forget to take a look at our PointDrive