November - 1999 - issue > India Business Kit

Setting up shop in India means addressing the big question of where to locate your office. Several obvious factors go toward selecting a location, such as accessibility, costs, familiarity, availability of talent, and your ties to your home town.. However, there are several not-so-obvious factors that can have a significant impact on your operation, depending on the location.

Travelling within India is still a big challenge. Indian Airlines (the Government-run domestic airline) flights are extremely unreliable. The good news is that Jet Airways is giving Indian Airlines a run for its money, with good service and far more reliable arrivals and departures. The issue, however, is that travelling within India is not as simple and straightforward as elsewhere, though there have been significant improvements in recent times. Day trips in the US are so common and effective partly due to availability of flights and conveniences created by the various time zones. Depending on where your business is located in India, it is possible that flights might not be available for you to fly in and out of a city or town the same day. This inconvenience is likely to be the case if your operation is not based in one of the leading metros (Mumbai, Chennai, Calcutta, Delhi or Bangalore). This can be a serious impediment to your operation, depending on the nature of your business.

Another critical aspect of running a successful India operation lies in being able to hire and retain good talent. Hiring good talent means settling in a place where such talented individuals will not necessarily hesitate to move to if need be, or choosing a city close to good schools and universities. The challenges of retaining this talent are similar to those faced by most Silicon Valley-based companies. Two obvious factors that help retain talent are the nature of the work and the compensation. For example, in places like Bangalore turnover is extremely high when compared to most other cities, the reasons mostly being the availability of highly competitive opportunities within the city, not to mention the lure of opportunities in the US. Thus, it is important to remember that a good location could also result in a serious employee retention challenge.

Finally, there are the issues of basic infrastructure, including water, power, roads and basic communication. In most Indian cities, rains still create havoc on roads. Power cuts are very much a part of life in several states. Many leading cities like Mumbai are swamped with road constructions. Until the improvements are completed, traffic problems are everyday events. Although progress is being made all across India, there is still a serious need for further improvements. It is critical to consider these and several other factors likely to affect your business when choosing a location for your base in India.