Why China and not India?

International Business: Why didn't American companies choose India instead of China for manufacturing products?

- Haosen Cai, Engineer

I’ve come across similar questions from time to time on this very topic and I don’t recall anyone ever pointing out the true reason.

The reason as to why India can’t out perform China in manufacturing is NOT because of infrastructure, it’s NOT because of skilled labors, it’s NOT because of corruption, and it’s also NOT because of “superiority of the Chinese mentality”.

I’d like to answer this question with this noun

Unpredictability

Now repeat after me.

Unpredictability

Unpredictability

Unpredictability

This is the single most powerful noun that’s preventing India from being a manufacturing hub - because doing business in India is so god damn unpredictable, therefore it is impossible to calculate your return on investment when dealing with India.

Bad infrastructure? No problem, that can be factored into shipping cost & delivery time

Lack of experienced labors? No problem, that’ll factor into capital/startup cost

Corruption? No problem, tell me who I need to pay and how much, that’ll become part of operating cost

Lots of paper work? No problem, longer startup time means lower return on investment, but that again, can be calculated, and can be made up with higher profit margin.

You know what the problem with India is?

NOTHING CAN BE CALCULATED

In India:

When a someone says “yes”, you have no idea whether he/she actually meant yes or no.

When a worker say that “I’ll be there in 5 minutes”, you have no idea whether he’s one of those workers who keeps his word, or he’s one of those workers who’ll just show up 4 hours later

When an official approaches you and ask for “expedition fee”, you have no idea how much he’s asking, and how much faster he can expedite, and how many more like him are coming

When you are presented with a pile of paper work, you have no idea whether this is the last pile, or whether there are 20 more piles that’s coming after, and whether you were even given the correct paper works to fill out.

Heck, even if you have someone coming in to help, you have no idea whether he’ll hit a cow on the way here and then forced to wait for another 8 hours for a shaman to show up and complete the ritual.

All that plus the occasional “I refuse to work with people from that caste” plus union strike and power outages makes doing business in India extremely unpredictable.

If you are a business owner, would you buy from someone who sells you the same item with $3, knowing that the goods will likely be delivered on time and to specification, or are you going to buy from someone who sells you for $2, but you have no idea when, or even if you’ll get that item?

Most people would buy it for $3, then just markup the profit.

Business is all about predictability, trying to make money without ability to predict is called gamble, and business owner don’t like to gamble when they could avoid it.

So to wrap this up.

Unpredictability is what’s killing manufacturing in India. Not infrastructure, not mentality, not corruption, not skilled labor.

It’s UNPREDICTABILITY, in capitalized bold letters.

According to Bhagwat Geeta, the book of wisdom by Lord Krishna,

“Obstacles don’t keep you away from your goals, it’s shorter path to lesser goals”

Discouragement comes from various factors, One of the biggest factor is availability of easy jobs is India is home to outsourcing center for entire world. Setting up business and competing with international brand is really tough.

People often talk about government policies and poor infrastructure, But they do not know that similar challenges exist everywhere. They’re all pretty excuses. Ambitious people always find the way through the difficult times.

I believe you can achieve everything that you want but most people do not want anything more than a stable income so everybody’s running after jobs.

Parents play a huge role in discouragement but at the same time it becomes a big excuse for not trying hard. success is really tough it’s really difficult to get in before it comes to you it will put all the obstacles in your way including your parents your loved ones and people give up too soon.

also I believe in India people think a lot about what others will say instead of realizing the fact that everybody will still talk bad about you behind your back so there’s no point in thinking about what everyone will think about.

There are several challenges and risks associated with starting a business in India, and some of these may make it more difficult for some people to start their own business right now. Here are some of the reasons why people might hesitate to start a business in India:

1. Economic uncertainty: The COVID-19 pandemic has caused significant economic disruption and uncertainty in India, and this could make it more difficult for new businesses to get off the ground.
2. Bureaucratic challenges: Starting a business in India can be a complex and time-consuming process, requiring significant paperwork, approvals, and registrations. This can be particularly challenging for first-time entrepreneurs who may not have experience navigating government regulations.
3. Infrastructure challenges: India's infrastructure, particularly its transportation and logistics networks, are still developing and can present challenges for businesses that rely on efficient supply chains.
4. Access to financing: While India has a growing startup ecosystem, access to financing can still be a challenge for some entrepreneurs, particularly those without established networks or a proven track record.
5. Regulatory risks: India's regulatory environment can be unpredictable, and businesses may face unexpected changes in regulations or policies that can impact their operations.

Compared to what ? There is nothing in absolute terms. It all depends on who you are and what you do. Kites are flown keeping the flow of the wind in mind. India has a big tail wind due to its large English speaking workforce but has many hurdles due to some head winds. Lets try to understand the problem.

A relative started a blockchain based technology business in the US and got 200,000 $ in funding. Valuations of tech businesses are hitting the sky since we are in the Information Age. The largest companies in terms of valuations are in the US which are trillion dollar companies. You have the understand that there is a equity and investment culture apart from a large early adopter customer base in the US. An Indian Billion is 100 Crores while and American billion is 7000 Crores Rupees. Now, you can imagine the scale of a trillion dollar company like Microsoft, Amazon, Saudi Aramco and Alphabet. Wonder if Tesla can rise up again. Note that these companies are from only Tech and Energy sector.

Indian politicians understand the value of religion over economy and focus on gaining the vote bank from the large undereducated population. Most of the wealth goes to large businesses capable of funding elections and retaining the politicians in their chairs. There are plenty of MNCs which are struggling in India. Take Vodafone Idea for that matter. Government licenses and laws can both enable and disable businesses. Many small businesses have gone under due to Demonetization, GST and the pandemic. The rising population has given rise to a large consumer base but it has also created pollution and adulteration of all kinds. Poor health conditions of workers, financial stress and now inflation are silent killers of many a dreams. We do not emphasize on the health much while loads of Indian food produce get rejected when exported to the Middle east.

Small Businesses

1. Today, I was speaking to small business who was complaining of police harassing the small shops and collecting money. Local politicians collect money for all festivals and use muscle power if not paid. Elections cannot be won without money. Period. We need self sacrificing politicians which is unrealistic currently.
2. Laws are not implemented properly for various reasons.
3. Most youngsters are unemployable because the education did not prepare them to think and gain relevant skills. Some of us have gone abroad and learnt on their own and became highly qualified to enter the workforce at lowest cost. An Indian worker is not paid as much as an European or American counterpart.
4. There is lack of interest in youngsters to work for local and small companies. They prefer to work for MNCs. Only well funded startups can afford these employees.
5. Clients do not pay on time and some don’t pay at all.

To survive in an hostile environment, one needs to have the cleverness, agile, resourcefulness, knowledge, network and good common sense to stay out of trouble.

The answer is that doing business in India can be quite tough for locals as well as foreigners. Tough as you think it is and easy if you focus on actions and do not worry about the outcome.

Indians are dreamers. Most Indians are constantly working on improving themselves and think of wealth creation. Our society has always been savers compared to other countries and we are now learning to invest. Bitcoins and gold is largely owned my Indians. Many unicorn startups are created by the young and aspiring Indians. Zomato and Paytm for e.g. Parents are focusing on education and education should only get better. This is forcing politicians to focus on development activities. Indians are early adopters of technology.

If you understand Indian culture and design the business accordingly to the aspirations, culture and market condition, it is easier to do business in India.

Feel free to connect with me. I am interested in any speaking opportunities.

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Remember this, you’ll need this in some time!

China

Tesla recently opened a Gigafactory in China, if you take a look at the timeline you’ll be amazed!

May 2018- Tesla Shanghai is incorporated

July 2018- Shanghai govt clears land for Tesla Gigafactory

December 2018- The foundation stone of Gigafactory laid

December 2019- The first Chinese Tesla Model 3S rolls out of the factory

India

May 2018- Tesla files an application for incorporation

July 2018- Government Babu scratches the application because the name Tesla resembles to that of Tosali(a hotel group) because it resembles the name any other already registered company and violates the provisions of Emblems and names (Prevention of Improper Use Act, 1950).

August 2018- Second Govt Babu rejects it because Elon Musk declared his birthday as 06/28/1971, to which the Govt Babu laughs off saying that there is no 28th month. The Americans always had it coming though!

December 2018- Random CM of a state calls him to one of those Rising/Shining/Progressive/Glowing/Shimmering/ state govt Investor Conclaves, he commits to invest money in that state, the CM gives him the land. Mr Musk is happy, some progress finally!!

February 2019 - Locals of the allotted land protest, initial work stopped.

April 2019- Random dude files PIL citing pollution

June 2019- Court defers hearing date to September 2019, all construction on that land ceased until then

November 2019- Case Dismissed, Tesla can build a factory, yay!

December 2019- Foundation stone laid, construction begins!

February 2019- Some NGO takes out a protest against Elon Musk, with erroneous Social Media Trends and arm twisting facts to vilify him.

“Deer were killed in the production of Musk”- The Wayar

“National Green Tribunal slaps a showcause notice on Tesla because trees were cut to make Elon”- The Preent

April 2020- Government which gave the land loses the election, everything is withdrawn.

June 2020- Tesla relocates to another state, opposition cries foul saying it has moved to a state ruled by the current government.

August 2020- Opposition files a PIL in High Court citing infringement of a list of sections in Land Acquisition Bill 2013, cites corruption, favouritism, nepotism, and every other -ism under the sun. Hue and Cry

December 2020-Court dismissed the case, saying it’s selective targeting, a witch-hunt.

February 2021- Government Babu strikes again, hands out a list of 420 NoCs from 69 departments to be obtained for Factory construction. I hope Elon Musk is wearing Paragon Office Chappal though because he’s going to make a lot of trips now.

May 2021- Babu issues a stop-work order, citing flouting of pollution norms while construction, NGT involved.

July 2021- Random NGO files a review petition on Supreme Court for review of High Court ruling about illegal land acquisition.

September 2021- Supreme Court appoints a reserve bench for evaluating the merit of the case, cite the concerns, date of hearing April 2023.

April 2023- SC dismisses the appeal, hands out a 17721 page order.

July 2023- Construction begins in full swing.

February 2024- Workers go on strike for poor wages, They’ve been “informed” by the opposition that the workers in US earn 100X what they earn.

August 2025- Govt of India levies a 20% additional surcharge(named Surcharge to promote Homegrown Industry and Technology) on foreign imported machinery to curb it’s use.

December 2025- Car manufactures protest the lack of any carbon tax on Tesla, so Govt levies a 12.9% Anti carbon tax on Teslas, to maintain parity.

May 2026- Indian customs hold exported machinery in port citing lack of paperwork, levy 690% penalty.

August 2027- State election is round the corner, local netas sit on a dharna in front of the factory, asking for 80% local employment quota.

January 2028- RBI files a case against Tesla under FEMA(Foreign Exchange Management Act)

June 2028- CBDT(Central Board of Direct Taxation) sends notice on GST slab of Electric Vehicles over a certain KV and Luxury cess.

November 2028- Factory ready for production, but no electricity and water supply as NoC is invalid.

March 2029- Production starts, plans to roll out first Tesla, but ruling party opposes saying you can’t inaugurate until CM does the ribbon-cutting ceremony. CM is busy.

May 2029- RCB wins IPL, Congress wins general election.

By now poor Elon had seen everything, things he could never fathom of.

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Year 2031, Prayagraj- Elon Musk was seen amongst Naga Sadhus, praying with them, chanting with them, and of course, doing this

Legends are that he can summon the Gods by just uttering his son’s name

However hard a Government may try,

May it be any government, there

WILL exist bureaucracy that’ll bottleneck the process

WILL exist an opposition which will not let bills pass because they won’t get the credit

WILL exist NGOs which will lobby for some vested interests to stall projects

WILL exist Media which will jump to conclusions and vilify any decision made for easing norms

WILL exist PIL stiflers who’ll use it just to shakedown Tesla

You may not have liked the answer, but the fact that you felt for a moment that this is very much possible in India tells us how bad things are over here

KB

P.S- No Elons, or Musks, or Elon Musks were harmed during the writing of this answer.

Giga Shanghai - Wikipedia

Bureaucracy & archaic or ambiguous laws are the biggest reasons why doing business is extremely difficult in India. I will give an example:

A company had placed order for import of gold and the consignment was on its way to India. On the same day (22nd July 2013) at around 8pm, the Reserve Bank of India (RBI) came with restrictions of import by such companies. Bills of entry were filed for consignments upon reaching to their destined ports in India. An authorized dealer (Bank) permitted outward remittance of consignments after referring to their legal department if the circular was applicable for goods in transit. Thereafter, the goods were cleared from the Customs Authorities (representatives of Government itself), after considering the in-applicability of the RBI Circular.

Eventually these import restrictions were waived. The license under which it was imported was renewed in April 2014. However, suddenly on 31st October 2014, the Directorate General of Foreign Trade (DGFT), the regulator for imports and exports, suspended the license without hearing or giving a reason (for an import made 15 months ago!). This order was stayed by the High Court. However, upon the Court’s insistence, the DGFT heard the company but suspended and cancelled the import license and put a penalty of Rs 100 crores!!! This information was given to the media even before giving the notice to the company. The company seeked clarity on media reports from the DGFT and it is then that the DGFT sent the order by Fax the next day.

The matter was challenged in the High Court on the premise that the RBI circular was applicable only to authorized dealers (banks) as per the Foreign Exchange Act and not to companies who were regulated by the DGFT. For them, the DGFT had to issue separate circulars. Again, all this was because of multiple regulators, multiple laws and ambiguity in their application.

The company even filed a defamation case against the officer, Kavita Gupta. She was recently in the news over an alleged lottery scam.

The value of the consignment was Rs 50 cr. The duty paid was around Rs 4–5 cr and the probable profit that the company made was around Rs 25 lacs on 200 kilos. There was no change in import duty or otherwise which could have led to extra profits on the import or so. Most of this gold was pre-booked by purchasers.

There were 117 other consignments across India which were cleared by the Customs in the same way by different importers but no action was taken against them.

Hence, bureaucracy and ambiguous laws are the biggest reasons why doing business in India is extremely difficult.

I have a friend of mine who invested his life savings and opened up a small pub.

He quit his job to run the business.

He hired two people to be behind the bar.

He felt like he was fulfilling his dream. He was a business owner.

Life was good.

Then one guy quit and all of a sudden he was in his pub for long hours.

Way longer hours than at his previous job.

Then he went home all stressed and tired and he had to sit with the paperwork of his business. Accounting, payroll, taxes, marketing, social media, dealing with suppliers, etc.

In a few months’ time he was exhausted.

He did find another guy but in the meantime he had to let the first guy go because he stole, he didn’t ring up all the drinks.

There was always some shit going on.

Something always went wrong.

He started to have problems with his girlfriend and eventually they broke up.

Owning a business is not easy.

Especially at the very beginning, when you are in the jungle stage. You need to cut through this seemingly neverending jungle that has all kinds of scary shit behind every bush. And all is there to eat you.

Many businesses fail.

My friend’s business did too. In his case, he sold the business for pennies and went back to work.

Now he is an office manager at a multinational company in Hungary.

Sure, he has stress.

But he leaves that stress at the office at 5:30pm.

Then he goes to the pub, that he used to own, orders a drink, looks around and with a big smile on his face he tells the bartender/owner that

“Finally, life is good.”

It is headache to me as well, I really don’t know what is wrong to me. Last year, I had a India customer, everything is confirmed, he ask for discount, hell yet, then we gave discount, price met his target price, and we signed the contract, and sent him the invoice, and he mentioned he will make the payment in the following days. customer disappeared a while, then his said his CEO want to meet me, I am welcome him for sure. While even meeting his CEO did not go as smoothly as planed. First day, He asked me to pick him up at Shenzhen North station, I was there 1 ahead of time, but I wait there for 2 hours, then my client call me, “ sorry, since we have a long meeting this morning, we can’t meet you today, let us meet at my hotel tomorrow.” I understand, hope to meet him tomorrow. Second day in the morning, I was on my way to the hotel, I got calling from customer, saying, “ We have to go to Hong Kong today, could we meet tomorrow at Hong Kong airport? ”, I was like “what!?”, The lucky thing is that I also have business trip to Hong Kong the same day, Even though I am sad about that, but still hoping to meet him at the airport, while I think your guy might know the results, I was disappointed again, he siad he and his wife will take the early flight in the morning, so don’t have time to meet me. I was……, your guys know what ellipsis means when I heard of this. The fourth day, He contact me and apologize, and he said not problem, don’t worry we will make the payment in the following days. But unfortunately, I have been wait for one year now, still not get the payment, and customer disappear a while now. I also wondering if there is any thing I am missing, Did I do any thing wrong?

Till now, we are PCB, PCBA manufacturer, I have many inquiries from India customers, but none of become my customers, It is very hard for me quote for India customer now. Should I give up india customers? I really don’t know. I think our business might not have any market in India.

This may be wrong. The question should be rephrased as “why are educated people in India are discouraged from getting in to business?” Most parents in India are from some kind of entrepreneurial background, and often without enough education. Their dream is to make their sons and daughters opt for salaried jobs. Because, they would have already undergone this problem. From the days of British Government, Indians have noticed that the officers have more power than business people. This is because, we developed as a highly regulated economy for a long time. Such regulations made it difficult for people to start organized business. However, if you see, those who do not have formal education in are all entrepreneurs, running nano, micro, small and medium business taking extreme risks and even without big support from banks. The concept of venture capital to support ideas are of very recent origin. Even this has not reached to those who are not educated or had other social capital. However, this trend is changing. Indians are among the most entrepreneurial people.

Most kids want to become entrepreneurs. That’s understandable - doing your own thing, the freedom, the excitement, the massive upside potential.

Source: Visual Capitalist

But less than a quarter of 20–34 year olds give it a shot.

Most of those that want to but end up not even trying:

1. don’t believe in themselves; and/or
2. are too lazy.

I won’t put down not having access to money because anyone that goes to high school and can get a job can raise a bit of money.

There are two types of Businesses in India:

a. Businesses where you require minimum govt intervention:

These are the businesses where you hire a CA, Register your business, and get started. Most of the companies in this line of Business are IT/ITES like Software Company, Accounting firm, Call Centre, etc. Your CA will handle taxation while you focus on business.

b. Businesses where Govt. is supposed to give you Clearance for every step:

Alright. Brace up for a life full of challenges.

You will be expected to grease some very rough hands (a lot of grease) at every stage.

Be ready to run around govt offices to get clearances or hire some agent/broker to do the job.

Some of the businesses in this line of work include Hotels, Industries, etc.

How easy is it to set this second line of business?

You need to be street smart to deal with govt babus and negotiate the right price for getting the job done.

The smarter you are in negotiating the deal, the faster the file moves.

By the way, the Kamal Mills Fire in Mumbai was a business where govt clearance was required. Unfortunately, the guys who owned the restaurant either bribed the govt officers quite well or the govt officers were too lazy to do a safety check.

What do I do for a living?

I fall in the first section of Business Owners (IT/ITES), where my interaction with govt is next to zero.

I have lived peacefully to date, and other than the few years of torture I suffered working for government projects, I have just done fine. (note: I have also promised to never do slavery directly for govt as a vendor).

In between, you should thank your stars. Despite all its shortcomings, VAT is gone, and GST is at least better than VAT, where you had to deal with state-level tax officers.

I guess - your answer is answered.

For similar answers and something better, visit Lessons At Startup.

Of course it is

A HUGE HASSLE

India is claiming life is easier for the businessman by automating things and streamlining the business process. Sure - that helps by around 5%.

Sure it now takes a much shorter time to register a company or partnership than it took around 10 years ago and its much easier to pay taxes and get requisite licenses.

But that is not DOING BUSINESS , that is Starting a Business

Starting a Business is the First of 100,000 steps.

Doing Business involves :-

• Ability to keep away Local Officials from demanding payoffs and bribes
• Reducing Taxes that make it uncompetitive to do business in India
• Fast Legal Courts to cut through Bureaucratic Government related Harrassment
• Arbitration Courts to be obeyed entirely and Indian courts to be entirely bypassed
• Reducing and Avoiding Local Politics when it comes to Business

In fact Doing Business in India is worse today than it was 10 years ago because of the Political Conflicts between Regional Parties and the Centre.

A Company wanting to do business in AP or TN or West Bengal is pressurized into doing the same Business in Gujarat or Uttar Pradesh by the Centre (As per Elon Musk). If they dont comply - they get penalized by Government Agencies.

A Company providing better services than Crony Friends of the ruling parties either in the Centre or the State will be obstructed in a million possible ways.

Acquiring Land is a huge complication and appeasing 500 sections of people, communities and groups are required

Courts Interfere in everything thanks to the Atrocious PIL system

So Starting the Business has been made easier

However Doing the Business has been made more tougher and difficult and chances of Bankruptcy is higher.

In fact it is estimated that 61% of Businesses in India leave or fail to deliver within a 20 year frame.

Of the Businesses that have left - 83% Businesses say they have left due to Political Changes happening in India over the last 10 years (2011–2021)

1. Entrepreneurs tend to be generalists and it is a role hard to play for specialists. If you were a specialist in UI design or brain surgery or tax audits — you might want to spend most of the day in that particular task, while as an entrepreneur you have to think everything from accounting to trash collection to sales.
2. They might not be able to afford huge financial risks. Entrepreneurs of all kinds have more risk appetites than the normal people. Most people love having paychecks deposited promptly on a specific day. No uncertainties.
3. They might prefer order over chaos. Working for an established company means you don’t have to think about whether you are building something others would use. In entrepreneurship you start with a huge chaos and many don’t like chaos.
4. They might not have control over their spending. Most people I see around are terrible at managing their money and are extreme overspenders. An entrepreneur has to become extremely stingy — especially early in your business. You cannot afford to fritter away your valuable capital. During most of the last 8 years, my wife and I have lived in average of $1000/month — in the times we were in silicon valley and Boston it was around $1500 and in the times in Mumbai and Bangalore it was more like $600/month. Most of my friends cannot even imagine this — that I don’t own a car or an iPhone or a home theater system. This kind of adjustment is hard for the overspenders.
5. They might not like people interaction too much. As an entrepreneur you cannot avoid people. From customers to employees, you need to have deep human relationships. In many jobs, you might be able to avoid most human interaction apart from your immediate boss and team members. I knew of people who would barely speak 2 sentences in their entire work week.
6. They might find comfort with a large group of people. Large companies provide various fun activities from team outings to all-hands to water cooler conversations. Entrepreneurs can sometimes feel quite lonely.
7. Hiring and firing can be very stressful things and so is losing a sales deal or an investment. Many would not like the stress. Many would not like their life being rated publicly. As an entrepreneur you cannot avoid your baby being rated, reviewed and criticised by random people.

With all the negatives, it is just amazing that how many people take up entrepreneurship. We are just screwed up people. For 8 of the last 10 years I have been an entrepreneur and it has been hard. I was ahead of my peers in my career path and finances at the start of the decade, but my liquid assets now are next to nothing. Why do I still do that? Because I’m screwed up and I cannot imagine living a normal life. Most normal people are not like that.

… Scary moment as the plane took off from the runway … the pilot confidently thrust the turbines, pushing the plane through the violent wind and rain.

With NO HESITATION the pilot took off.

Uncertainty filled the cabin. Each one of us was scared!

Total silence. No conversations were happening while everyone was praying or fighting off the terrible thought of a plane crash.

The plane gained speed and altitude. The cabin shook violently. BAM! WHOOSH!

A woman started screaming as she couldn't hold back her fear anymore.

Meanwhile the pilot DECISIVELY kept thrusting, up and up and up …

The turbines roared through the wind when a sudden darkness filled our windows.

Zero visibility.

The plane was immersed in the dark clouds filled with rain. BAM! WHOOSH! The shaking and the bumping intensified — tension overwhelmed everyone in the cabin.

It was too much. The scared lady couldn't control her fear any longer and lost her mind, yelling and screaming with sheer terror.

“I want to get off! Please get me out of here! I don’t want to die!” she desperately cried, out of control.

The pilot continued to push the plane through the cloud — with NO visibility, focused on his dashboard, trusting in his abilities and the data available in his cabin.

With the intense bumps and the lady screaming, I heard a little boy say to his mother sitting behind me, “Mommy, are we going to die?” The mother looked at him speechless with no answer.

Suddenly, in an instant, the plane stopped shaking.

As the plane pushed above the clouds, the shaking stopped and a beautiful CLEAR BLUE SKY appeared. Everyone of us was rewarded with the indescribable feeling of relief from the stress.

The flight attendant rushed over with a drink in her hand to assist the scared lady. “Calm down! Everything will be okay! Look outside! EVERYTHING IS OKAY. It’s a beautiful sunny day.”

IT WAS A PERFECT FLIGHT.

To answer your question:

• Lack of information leads to uncertainty.
• Uncertainty leads to fear.
• Fear leads to inactivity.

I know your reaction: “But starting a business is very risky! Most businesses fail! I can’t afford any losses.”

Education empowers you with a broader perspective!

Why don’t people start a business? Because most of us were indoctrinated, NOT really educated to see the reality of things.

• Like the passengers in the analogy above, all we could see was the storm around us.

Understand how ironic this is: People in the same plane, same stormy weather, same shaking and bumping … one is screaming and pooping her pants — while another is in full control.

• The pilot KNEW there was a sunny sky ABOVE the clouds! Why?
• The pilot has information!
• The pilot has education!
• A pilot NEVER flies a plane on feelings.

This is one of the most common reasons most businesses fail:

• Most people live their lives, select their careers and start businesses driven by feelings, NOT BY FACTS!
• It is perfectly normal to feel scared!

To eliminate fear, we need relevant information. Information is critical for staying ahead of the massive technological disruption that is quickly changing our world.

What do you think? Share your story!

India does produce many entrepreneurs but at very small or non existent cases.

Economically:India ranks second with highest number of start-ups. But is way behind in innovation. Despite the ease of doing business index, many Indian entrepreneurs prefer small scale investments over building strong firms.

Here are a few proved reasons :Please read all the 12 reasons carefully till the end.

1)Number of people who aspire to be entrepreneurs are low:

In Indian society, children are told to study early, get good marks and get into a good college. No one is given a slightest idea or told about the importance of deciding what you want to become. The full focus is on surviving till college.

2)Dreams are not encouraged for those who aspire it when they are young :Most young kids who aspire to be entrepreneurs are not supported by their parents when they take such decisions and parents do not even care to help them rise up to their dreams but force them to learn and teke Jobs by stating:What business will you open? Stop daydreaming and go study? Only sons of Industrialists like Ambani will get this.Business is purely based on luck and many other excuses.

3)Lack of investors on innovative products :Many countries provide and advise investors to fund projects of aspiring entrepreneurs till they succeed. Basically Indian investors have been observed to only invest in IT sector and already existent businesses. Therefore lack of investors make a innovative entrepreneur to surrender his idea .

4)Funding and process:Basically,The Indian market is the most different, bizzare and mysterious market in comparison to the rest of the world. Many Indians tend to have genius ideas and innovative products. But there are no people who Wat to fund their projects. Her is an expected instance:A person aspires to open a robot company, he comes up with a master robot with all features, best ideas but when he realizes that he is not having any funders or investors in his project, he eventually ends up selling it and surrenders. This is 100%of the main reason why entrepreneurs ready to start their career end up losing.

5)Situation handling :Beginning from registration of the company to come up to manage the business successfully as a strong leader is a skill which many Indians lack and are never educated about. Therefore they are afraid of opening a business .

6)Past economic situation ridden:In the past, Indian markets were small, standards of living and perfect capita income were low and therefore economy of India was slow and no one wanted to invest or try to open up businesses in such situations.

7)The type of startup:Indian entrepreneurs tend to be less innovative when it comes to new start-ups and end up copying foreign start-ups causing failures and giving them a bad reputation internationally.The type of startup also matters as some sectors of Indian industries are not so efficient.

8)Support and stocks :Like U.S has a research and development tax,meaning less or no tax on activities conducted for research purposes. This helped many scientists who came from poor backgrounds to make groundbreaking Ideas and later market them with funds provided by the government. India gives less subsidies to such entrepreneurs and they tend to go to other countries to gain such benefits.

9)Competiton:Very serious, an Indian entrepreneur interested in making a pure Indian phone brand has to deal with defeating Xiaomi and Vivo,oppo first before entering as he cannot face the competition from such phone giants. He eventually ends up giving his ideas to other companies but doesn't become an entrepreneur.

10)leadership stand :In this stance, An entrepreneur is meant to learn how to take leadership and have experience and Co operative skills but Indian society never let's anyone have any of these but focus on non skill mugging.

11)Infrastructure:Basic infrastructure required for setting up large scale companies is high and requires good infrastructure which India can provide but no for all situations. So Indian entrepreneurs emigrate to other countries to start start-ups.

12)Skilled labour:Admit it. We lack it. And we will have to overcome this to encourage entrepreneurship.

These situations are the most commonly profound situation leading to the lack of skilled workers and entrepreneurs in India.

Last:Do not worry, India is now in modern day era,ease of doing business has increased, Make In India works ,infrastructure is improving, skilled workers are increasing and people are smart enough to realize the truth, India is industrializing ,improving it's conditions,attracting investors and soon we will win the world economy. 😊😎

Because right from our childhood, we are trained to serve. Our mentors teach us to become doctors, engineers, MBAs and get employed which is considered stable and steady occupation with regular flow of income. What they don't realize is that the employers only pay a small part of what the employee has actually earned, in the form of salary. Employee meets the target, business earns money, employee gets a salary. Next quarter the target increases, employee works day and night, business earns more money, but employee gets just a bit of that incremental income and that too at the end of year in the form of appraisal. Is that how every youngster in India should lead his life, running in a hamster wheel faster and faster until he eventually crashes? You maybe a topper from a premier institution bagging a hefty salary package and considering yourself the smartest of the lot. But the truth is the person paying that hefty package, although not as bright academically, is much smarter than you and knows how to tame you and your intelligence.

There is a social background. Indian society was classified into four "varnas" by by an evil genious MANU. the elite Brahmin, the warrior Kshtriya, the calculating Merchant and the artisan Farmer and his support trades. Business remained the domain of the merchant class. Even today this class is mainly into business.

Then came a 1000 years of foreign rule. First under the Muslims and then the British. During the British rule things changed. More people had access to education. However the coveted honour was becoming a government employee.

I don't know how far this socio cultural background is relevant now.

Good question. There are a lot of factors due to which India has fewer entrepreneurs. Some of these are:
1. The education system: Everyone knows this. We had a great education system in ancient India. Creativity and curiosity were promoted. Practical education was emphasised over theoretical education. But then the British came and changed this. We tried to copy their education system and hence, created the most fucked up education system in the world. Currently, schools don't promote creativity and do not allow kids to freely express themselves, be curious and question things. The only thing they give a shit about are marks. Competition for marks drives kids, not the curiosity to learn something new. This discourages a lot of people who could be great entrepreneurs.
2. Lack of rebels: Rebels are very important for societies. They question the current ways of doing things and they change things they find wrong. India lacks rebels. Forget rebels, we don't even have people who can say, "I don't have passion for engineering, I won't do it" to their parents. Rebels are very important. They challenge the old and replace it with the new. We, however try our best to supress rebels and make them live a life of conformity. Rebellion is hated by everyone from school teachers to parents to any random uncle who lives in your neighbourhood. Everyone wants kids to live the default life. Those who don't want to, are viewed as losers. Very discouraging. But Its these rebels that make great entrepreneurs. If you discourage them, you won't have many entrepreneurs.
3. Mindset of society: Indian society truly hates entrepreneurs (before they succeed). My uncle is currently working on his second start-up after his first one failed. I truly admire him. But many of my relatives? They consider him a loser who couldn't get a job. He will make it big one day and hopefully make everyone shut the fuck up. So mindset of people plays a big role. Why would someone go for entrepreneurship if most of the people he knows are against it? Only true rebels still have the balls to go for it.
4. Fear of failure: This is a big problem too. Indians truly fear failure. My classmates cry when they get 94% instead of 96%. Most of the people I meet just want an engineering degree to get a job. A job is considered a cloud of safety which most people are too scared to leave. They just don't have the guts to take risks because risk = possibility of failure. Has anyone become a successful entrepreneur without taking risks or failing?
5. No passion for anything: I believe that you need to be passionate about something if you want to be an entrepreneur. Make your passion your business. But in India, I barely see people in real life doing something they love. I joined an engineering coaching class (and quit 3 months later) only to find that most of the kids there had no interest in engineering. But they still come to that class and learn and mug and cram so they can get into an IIT and get a "good" job. If people don't have any hobbies or interests, they won't have many ideas. I haven't seen any entrepreneur till date who wasn't passionate about his business. And if we have a bunch of people who aren't passionate about anything, we will never have many entrepreneurs because these people will be busy working in companies of entrepreneurs from other countries (aka the MNCs).

There are a lot more things. But these few are the main factors. Its not that all Indians are like this. But a majority of our population fits in with this. However, thigs are changing slowly and we are seeing more and more start-ups. Hopefully, things will change for better in the next decade. Its these times that create the best entrepreneurs. :)

Reasons are many , few common i felt more responsible are

Low budget or no budget.. Dreaming for business with only talk, not real action or plan.

No guts to take high risk or high investment budget.

Seek , fix income in business too like 9–5 jobs. Sure end up start up right from first day.

Depends a lot on social media sites.. ( whatsapp , facebook, linkedin etc.. ) Unfortunately , ive seen many times, our Indian start ups, sees social media as very serious place for business, not applicable for almost businesses.

As no budget, lac of patience and hard work too, that too sometimes in wrong direction.

Always try for Jugaad .. In reality jugaad works for few , fails for many.

and many more..

these i felt personally could be reasons .

When I was in school, I was good at one thing: slogging.

I mean…logic was never explained, and we didn't even care to learn or understand. It was always about scoring.

By the time I reached college - I was a decent student who would always be in the mid-class rankings.

In college, I took the slogging to another level by literally writing whatever I learned on blank sheets and comparing it with answers to questions.

No one taught Logic, and I never learned the need to understand Logic.

That’s how the education system was. Lecturers focused on marks. Teachers focused on marks, and parents too only wanted marks.

We were given some ten programs to choose from in our college practical exams.

The invigilator would give us an option to pick from the chits that had the program number. So you had to select a chit, and the program you got was the one you had to execute on the machine.

I would slog and remember every single line of code.

In one of the exams, I got a program with some 400 lines of code to write.

As I mentioned, there was no logic.

I slogged, and then whatever I had learned by heart, I vomited.

During one of these practice exams, I forgot a single line of code ( in 400 lines of code). So, as expected, the final output went for a toss.

The invigilator would time and again come to me and tell me, “You have made a small mistake. Apply logic and fix it”.

The logic was an unknown entity to me. I had literally learned the program by heart. Now finding that one line was a task for me.

The exam ended without me writing that single line, and as expected, I could not complete the practical exam to perfection.

I got some 30 odd marks out of 50.

This is how engineering got over.

As usual, the target was never to become an entrepreneur but get a decent job in a software company and then go onsite - earn some quick buck. Then, come back to India (foreign return) and settle down.

If you are lucky, get a Green Card and never come back.

Being an Entrepreneur wasn't part of our thought process.

I got placed in an MNC as a software engineer, starting my struggle.

Within one year, I could figure out that I was decent but not amazing with coding.

I quit my job and started my company. But, as I figured out, I am good with many things, and coding isn’t one of them.

Being an Entrepreneur taught me everything I should have learned during my college days.

Guess what? I even learned to code well during my entrepreneurial days.

Today, I can write code as and when required.

Why does India not produce Entrepreneurs?

Because from day one, we are forced to follow an education system which the British had imposed on us. They aimed to produce executives, managers, and not entrepreneurs.

Guess what! We are still living up to their expectations.

Here is my journey: How our Unplanned Startup Started

I think it is because a lot of youngsters are preparing only for exams.

They are preparing for IAS, CAT, GATE and several other exams. Every year lakhs of candidates apply for these exams. These exams demand serious dedication, focus and hardwork which doesn't leave any room for other things such as entrepreneurship.

It is not that youngsters are afraid of taking risks. They do not have time for taking risks. It’s just that they are busy in their exams preparation so much that they are not able to experiment with their cool ideas.

Number of entrepreneurs will increase if students take some time free and think about their ideas and opportunities available to them instead of giving exams.

It just came in my mind few minutes before. In Japan there is a single bed residence named capsule hotel where you can stay overnight and it cost very less.

We can use the same business near railway stations,bus stands or airport because it’s highly in need for our country.

People of economic country like India are surely going to get attracted and the 1st rule of business is customer satisfaction.

Hope this idea attracts you.

Widespread corruption, government hurdles, lack of funding and poor technology and training have resulted in low efficiency and high start-up costs in India, making the country the worst for entrepreneurshipin Asia, according to a Gallup poll.

Willingness to take the risk of running a business is not a common trait among Indians

The survey, however, noted that India has an abundant reserve of entrepreneurial talent. It found that business thinking, optimism and persistence - all important for entrepreneurs - are common traits among Indians. But it found that the willingness to take the risk of running a business is not a common trait among a majority of Indians. "More than 60% of the Indian population possesses personality traits that are crucial for success as an entrepreneur population possesses personality traits that are crucial for success as an entrepreneur -- such as business thinking (69%), optimism (66%), and persistence (65%) -- which suggests a wealth of entrepreneurial capacity. However, willingness to take the risk of running a business is not a common trait among a majority of Indians," it said.

The Gallup study found that only 16 percent from a sample of 5,000 own business, of which only a fifth had formally registered.

One of the major factors hindering entrepreneurship is that it is not easy to start a business in India.

"In addition, the World Bank's report 'Doing Business 2012: Doing Business in a More Transparent World' ranks India at 166 among 183 countries in terms of starting a business. This ranking is unchanged from 2011, indicating that little progress has been made toward reforming rules and procedures to benefit those planning to start a business," the study said.

Reliable support from honest and efficient government institutions is essential

According to the survey, around 46 percent of Indians say the government is the biggest stumbling block to starting a business. More than seven in ten adults believed corruption is widespread in the government. More than six in 10 agreed that corruption is widespread in business. This perception was particularly high among current business owners (72 percent) and those planning to start a business in the next 12 months (80 percent), it added.

Entrepreneurs need more diversified, localised funding at the initial stage.

The most helpful factor in becoming an entrepreneur in India is access to funding. However, "The key problem for entrepreneurs seems to be less about the availability of funding and more about finding the right type of funding. The majority of existing venture capital funds for start-ups are focused on export-oriented IT or mobile solutions," the study said. Few seem to facilitate startups that offer the high-demand products and services in the healthcare or energy sectors in India's massive domestic market.

Foreign investors need to understand India's business culture

Another problem with funding is the disconnect between investment funds and local entrepreneurs. This is because foreign investors ignore India's unique market demands, talent supply and business culture. Instead they often make inaccurate assumptions based on what has worked well in their home countries and other emerging markets, said the study.

Moreover, the lack of angel or seed funding and investor participation in managing start-ups in India acts as another hurdle. Venture capitalists in India choose to only finance expansion of existing businesses, rather than funding a start-up from scratch.

Indian entrepreneurs need more access to training and mentorship

Gallup also found that 22 percent of aspirational entrepreneurs who plan to start their business in the next 12 months have access to formal or informal training to start a business - which is much lower than the Asia average of 44 percent.

Secondly even though India has some high-profile entrepreneurs who can serve as inspirational icons, there are not many who offer success stories from which aspiring entrepreneurs can learn.

And finally, finding trusted partners is another big problem

Only 16 percent of Indian adults say a non-relative can be a trusted business partner, the survey said. The lack of judicial infrastructure on enforcement does little to protect the trusting relationship between entrepreneurs and business partners or between entrepreneurs and customers.

A good question indeed and Boy! And am I glad a question of some importance and substance has been asked on Quora after ages!

This answer is primarily from the viewpoints of starting of a venture and expanding a venture in India of Large -scale businesses and Industries.

If one were to leaf over the list casually that you have attached, one would be able to observe a few things :

1)These nations are able to meet the Power/Electricity supply demands

2)These nations do not have a history of relying on some other form of activity as their chief backbone of their economy.For e.g Singapore was established by the East India Company as a designated trade post and a stop on their trade routes further east.

For India though the reason is a complex concoction of historical events,reasons, excuses, and rules coupled with our attitude which does not allow us to be on that list.

The “activity” that I spoke of in the observation is the activity of Agriculture. India has historically been a large agrarian economy dating back centuries. Today that has led to agriculture accounting for 13.9% of the GDP of India(Agriculture in India).Though there has been a steady decline in this from 2013 , we cannot swiftly shift our focus to manufacturing, R&D and hence we cannot avail of the incentives provided to new businesses(startups) that are available in some other countries. Though we are pushing for growth in that sphere with schemes such as “Start-up India”, “Make In India” etc.(About - Make In India) and our present PM’s push with various bi-lateral deals as well as the youth opting for research(though it is a very small number of them).

British colonialism also played a part in making us a nation on our knees, my focus is more on the modern aspects (i.e. from our independence in 1947 onwards). The British left us a country with debts and a divided landmas. We were a newly formed country we had massive problems of our own from the moment the bells of independence rang. We had food scarcity, teeming refugees and to a certain extent no world class infrastructure. To face these problems our leaders thought it best to fashion ourselves as a democratic socialist republic with learnings from both the capitalist world as well as the communist. This led to a high( read excessive) level of bureaucracy and the red tape and many impediments such as the need to obtain a certain “Licence” in that period (hence the coining of the term “Licence Raj”). Now for any entrepreneur from a middle class background (such as Zuckerberg or Branson) stating the task of starting a business during the period as an uphill one was an understaement. Many palms had to be greased (if you had the money) or it was a little less steep if you had a ceratin amount of “Influence” or “knew someone higher up”.

Another law that our founding fathers implemented in order to make our country self-sufficient was that the presence of any foreign MNC in India could happen if the said MNC would produce their products India by Tying-up/ having a Joint Venture with an indeginious corporation of India ( for e.g. FIAT and PAL to produce the Padmini). This stopped many foreign MNC’s such The Coca Cola company and GM from being manufacturers in India till we became a part of the free market after the economic liberalisation in the early nineties. We may have done the liberalisation, however we did not focus on the massive overhaul nedded to support it leaving the bureaucracy teeming at every nook and cranny.

Though we did change our socialist structure we still have the problem of excessive bureaucracy(which was originally put in place to help the people) that has hindered the growth of indigenous businesses as well as tax structure which poses a problem to both estabilished foreign Co.’s as well as the ones trying to be estabilished. (Why is Flipkart registered in Singapore?)

The last factor is our mindset that businesses are for the rich and the ones with “enough people behind them”. The idea of starting a business until very recently in most of the population was either regarded with disdain or the fact that one was not employable.

Although there are impediments such as these there are industrial greats from our country too such as Dhirubhai Ambani who cornered the plastics and garments market on a large scale in a relatively short span. His sons feature today on the list of richest people in the world. There are small scale businesses too in our country from the small towns and the good thing is that most of the people who won them in some way are content and that is something that soothes the heart.

Regards.