I’ve learnt two big lessons this week. One is that there’s no limit to how ridiculous a piece of technology can get. Two is that there’s no accounting for human tastes.Who would have thought that someone would go to the trouble of putting together an app that goes “Yo” (in the most annoying little voice, I might add) from one user to another and that this app would then go on to become among the five most popular apps on Apple’s App Store with 790,000 users already? And the story does not end there; investors are actually willing to back it up with $1.2 million – with more promised! Luckily, the Israeli duo, Moshe Hogeg and Or Arbel of Mobli, a company that develops more serious applications, seem to be unwilling to go crazy with Yo. Very sensibly, they’re waiting to see how it goes. It’s being suggested that Yo could be developed to include more interesting features, including different sounding Yo’s, and that it would be a perfect fit on a smartwatch.The Yo app and phenomenon has dominated social media news, made it to the Stephen Colbert show, and received due attention from hackers who’ve used it for a bit of target practice. You can check it out for yourself on iOS and Android and see if you become one of its addicted fans. I tried it for a bit and promptly and without regret, offloaded it. Like the developers, I’ve also often used punctuation marks to communicate with someone who understands the context. But a Yo is probably something I’d be able to tolerate say once a year at best. It’s funny when you think that the app wasn’t supposed to be out in the wild in the first place but was meant for internal communication. Even Apple reportedly rejected it as having too little substance. Who would have thought it would get that popular, though who knows how long the world’s amusement with it will last. When you look around, there are many other apps and games that are simple one-trick ponies but end up becoming frantically popular. I’d count Flappy Bird in that category. In fact, I’d even say Talking Tom, mimicking everything you say, should have outlived its funniness. But oh no. The art and science of viral content and its longevity has not been cracked yet. Which is why the future of Yo is being watched with great interest. But at this point I’d say one can neither ensure virality nor can you take it for granted and sometimes, it just knocks you off your feet. One thing’s for sure: things like Yo certainly teach us something we didn’t know about people.
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Something that started off as a nice to have channel has now overtaken other traditional channels of consumer interaction and purchase. Customers are searching for vendor information, checking user reviews, making purchases on the go with the help of mobile devices. The latest mobile usage statistic by WebDam shows that 1.4 billion people own and use smartphones globally; that's 1 in 7 people worldwide! According to a projection by ComScore monthly data consumption by an individual using a smartphone will increase from 150 MB in 2011 to 2.6 GB in 2016. Mobile devices have changed the way customers think and purchase and this is evident more than ever in the year 2014.Looking for more proof? Well, Forrester finds that more than half of retailers they surveyed stated mobile as top priority in 2014 with increase in investment, and 48 per cent will continue to remain the same. Speaking of the power of mobile, it is delightful to know that 70 per cent of mobile searches leading to online action within an hour!What does this mean for marketers?A huge opportunity is up for the grabs, and success goes to the fittest. A few things to keep in mind:Email CampaignsA study by Radicati showed that currently 46 per cent of email users access their email via a mobile device and this number is expected to increase to around 80 per cent by 2018. It is critical for marketers to ensure that email campaigns are not just focused towards engaging desktop users but also target an increasing mobile audience. Mobile Apps Vs Mobile WebsitesThere was a time when marketers were scrambling to create mobile websites to cater to the mobile audience but in 2014 that doesn't cut it anymore. 85 per cent of users prefer native mobile apps to mobile websites with iOS apps generating about 4 times the revenue compared to Android apps. If you want higher engagement and ultimately higher revenues, mobile apps are the preferred mode of engagement with your target audience.Evolution Of Human Interactivity In Mobile AppsThe availability of apps on our smart phones continues to play a much greater role in defining user experience. The ability to download an app in seconds, in real-time has evolved rapidly. Now consumers are seen spending more time in mobile apps and less on the web. An interesting research says, 75 per cent of Americans actually carry their phones even to the bathrooms! Interactivity between human and mobile is now seeing a major step-change. The industry is moving towards making app experience more and more humane, with better touch, feel and sound. A testimony to this is also the gaining popularity of wearables - which is perhaps a sneak peek into the future. Measuring ROIWhile this marketing channel gains speed rapidly, its newness is keeping businesses from being able to measure its ROI and most of them are not sure how. Good news is that measuring ROI in mobile is possible. The first step to it is setting up an appropriate measuring strategy with clear goal setting and key performance indicators. Besides, there are now several third party tracking tools for both in-app and site activities. Setting up custom events based on the KPIs, such as installs, in-app purchases or time spent on the app makes tracking streamlined and lot more effective. With the right approach, mobile marketing can soon move from a trend to a measurable, profit-making business strategy. As mobile devices permeate almost every aspect of our lives, marketers need to utilize the immense potential to understand different consumption patterns of consumers and tap into their lives with the right products at the right time.
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A Secret For AllPeople have always loved secrets. But with the app Secret, it's not a matter of "don't tell anyone..." rather the opposite. Secret is all about anonymous confessions and gossip and you can use this social network to get things off your chest. The immensely popular iOS app has just made it to Android as well as to the world outside of the US. Now you can just say whatever without anyone knowing who you are. Sounds childish? It probably is — but it's also addictive. Very much like another app Whisper, Secret, so far, has been more focused on corporate gossip. That may change as the app opens up to the world at large. Secret knows who you are so it can let you see stuff from nearby and from contacts, but anonymously. Secret is worth a look to see what we humans can really be like when allowed to.Travel And Tellmotormouth, a free iOS app, is based on a great idea. However, I think someone should rebuild and improve on it. What MotorMouth does is pair voice notes from users with a map. Wherever you happen to be, you can leave a voice clip, created from within the app. As people travel around they can open the app and get interesting information and reactions from others who've been there. Sadly, a nice idea doesn't mean people use it nicely. I heard wholly unnecessary clips saying, 'Hello, how are you?' And some others were in languages I didn't know. But it's early days yet for this new app, which has the potential to be really cool if users let it be. If the app were better designed and used images as well and allowed you to use ratings and leave more detailed text notes, it would be far more interesting.Slack Off To Do Stuffa collaborative tool still in limited preview (but downloadable), Slack is a combination of chat, email, file sharer and more. You add others, who also need to download the app on Android, iOS, PC, or Mac, and form a team to work together on something. Chat would have been too temporary and difficult to exchange files on. Email is sometimes too confusing as multiple people send mails and inevitably someone doesn't get someone's mail. But Slack is that combination that makes collaborating easier. It also works with other services such as Google Drive and Dropbox. Everything concerned with your project is all in one place and searchable as well. On top of that, you can use it as a task manager by setting reminders to complete your part of the work(This story was published in BW | Businessworld Issue Dated 30-06-2014)
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If it were a murder, it would have been the perfect murder. It was quick and quiet. In February, while India’s corporate governance vigilantes obsessed over Maruti and its deal with Japanese parent Suzuki, Alstom Transport India, a wholly owned subsidiary of French engineering major Alstom, bought out the transportation division of Alstom India, another arm of Alstom. The division was sold for Rs 176.9 crore, a figure far lower than the division’s sales for the previous 12 months, leaving minority shareholders of the Indian arm high and dry.
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If the barbs, wisecracks, jabs and wordplay by politicians in the electoral fray have not particularly tickled your funny bone, here’s something that certainly will: Portly politicians taking each other on in a game of cricket. Narendra Modi, BJP’s prime ministerial candidate, decked up in a maroon kurta and a saffron scarf walks to the crease to face the bowler — none other than Rahul Gandhi, the Congress’s de facto PM candidate. Rahul begins his run-up — rather long for a 43-year-old — and delivers a fast ball. Modi is clean bowled! This in no way implies what is in store on the D-Day, 16 May. The setting is just part of a gaming app — Kursi Cricket — available on Android and iOS platforms, where Modi, Rahul and Arvind Kejriwal fight it out on the cricket pitch. The three of them battle it out to defend their wickets, well, kursis, if you get the drift. Kursi Cricket has been developed by a Mumbai-based gaming firm Games2Win. The game has seen close to half a million downloads since its launch in February this year. While India is witnessing one of the most debated, fractious and exciting elections ever, app developers are doing their best to cash in on the poll sentiment. Developers, from India and abroad, have introduced several election-themed gaming apps which have attracted considerable traction. In the past three to four months, such games have seen between 10 and 15 million downloads on iOS and Android platforms. Some developers say they have also managed to make money out of this euphoria and will be launching upgrades till the election fever lasts — that is, till the results are declared. Election-themed apps are not limited to games alone (though gaming apps constitute a majority). Some of them have utility value as well. For instance, there is an app — India Politics by XAPPSO — that provides background information such as educational qualifications, past experience, etc., on those contesting the elections. Then, there are apps poking fun at politicians. Yo Yo Kejru Singh! by IOTASOL is an app which parodies rapper Yo Yo Honey Singh’s ‘Lungi Dance’ number on your cellphone. You can also watch Kejriwal dancing to ‘Lungi Dance’ with yesteryear character actor . A Modi Wave? Even as political pundits continue to argue about whether or not there is a ‘Modi wave’, when it comes to the gaming industry, there is no denying the phenomenon. Of the 500-odd games launched on the two major platforms, around 70-75 per cent have Modi as a central character. In the remaining 25-30 per cent, characters based on Kejriwal and Rahul are in the lead; Tamil Nadu chief minister J. Jayalalithaa has around 10 apps with her in the lead. A Knockoout: Games modelled around BJP's prime ministerial candidate Narendra Modi have dominated the election gaming apps market“I am a big fan of Modi and that was the main reason I decided to come up with an application based on him,” says Lakshmikant Reddy, founder and CEO of Outset Apps Technologies, a Hyderabad- based firm. The firm’s app named Narendra Modi gives you information — news, views, his social media status updates and tweets — on the Gujarat chief minister. It has been downloaded around 5,000 times. The most popular of the gaming apps — Modi Run — has seen 8.68 lakh downloads. It attracts 4,000 new users every day. “Modi Run was our first India-specific game. Due to the popularity of Modi in the 18-30 age group, which forms the majority of our target audience, we launched Modi Run in India,” says Kumar Mettu, founder, Dexati, a California-based gaming firm. In the game, Modi runs through different states with varying difficulty levels. Gujarat, not surprisingly, is the first and easiest level. As you progress, levels get tougher — Maharashtra, then UP, and so on. The toughest levels are Jammu & Kashmir and Sikkim. All these games have popped up in the past three months and most will find it difficult to survive once the election euphoria fizzles out. “We are aware that after the elections, the interest of most users in election-centric games will dry up. So, we are coming up with an update that will not only give a new look to the game but will make it even more interesting and relevant once the election results are out,” says Mahip Vyas, head, Alliances and Distribution, Games2Win. While most games and apps are not offensive, some tread the thin line between freedom of expression and its abuse. So, there are games like Pappu Versus Modi, Feku Versus Pappu and Pappu Prime Minister. In Feku Versus Pappu, you can “choose your favourite party leader and vote for him. You can punch and slap the opposition”. So, this game can serve as a virtual punching bag and help you get rid of your anger at politicians’ hollow promises. Sadly, the Samajwadi Party leadership has not found favour with app developers. break-page-breakPolitics & ProfitsWant to rile a game developer? Ask him whether India will ever see a game as big and as successful as an Angry Birds or a Temple Run. “It is like asking whether India will ever see a Microsoft. It depends on several factors. India is a different country and our games are different, but we are doing everything in the book and even outside it and we are seeing results,” says an agitated Alok Kejriwal, co-founder and CEO of Games2Win. As gaming apps gain traction globally, gaming enthusiasts in India are migrating towards them. However, the acceptance of locally developed games is still not high. According to mobile measurement and analytics firm Infomate Mobile Intelligence, globally popular games such as Temple Run and Angry Birds figure in the top 25 apps used by Indians in 2013. There is no built-in-India gaming app in the list. Some industry trackers say that built-in-India gaming apps, especially those with elections as their theme, will find a place in the list of top 10 games to have been downloaded in the past four months in India. Are these games making money? Currently, the Indian mobile gaming industry is at a nascent stage with revenues estimated to be around Rs 560 crore, according to KPMG and the Federation of Indian Chambers of Commerce and Industry. The mobile gaming segment could increase to Rs 1,800 crore by 2016-17, says their report. Compared to global figures, the Indian gaming industry is very small.The global mobile gaming industry is estimated to be around $13 billion and, by 2015, it could become a $22-billion industry, according to a report by technology research and advisory firm Gartner. While the exact data on the number of apps launched around elections is not available, industry experts estimate, collectively, between Rs 10 crore and Rs 15 crore has been spent on their development. Developing an app may cost as little as Rs 60,000 ($1,000) or as much as Rs 1.5 crore ($250,000). Industry experts say that Angry Birds creator Rovio spent between Rs 75 lakh ($125,000) and Rs 1 crore ($ 180,000) in developing the app. This is, however, not the case in India. Apps developed during the election season are estimated to have cost between Rs 1 lakh and Rs 10 lakh. No app developer was willing to disclose the exact cost incurred. App developers are, however, willing to talk about the money they have made from these apps. They estimate that political apps have generated between Rs 40 crore and Rs 50 crore in the past few months. While this number may look small, it is quite substantial given the size of the industry in India (though not all developers are based in India). Most election-themed apps are free-to-download. In-app advertisements provide the revenues. “The games around elections have huge potential for earning profits. Normally, profits are made through the advertisement pop-ups, and we have seen very good numbers,” says Vishwas Dwivedi, founder, Born2Win, an Indore-based firm that has developed the Modi As PM game, in which the player has to make Modi jump over hurdles to reach the “PM’s throne”. The game has seen close to 5,000 downloads. It broke even after 500 downloads and is now making profits. “Once we launched the app, we aggressively approached advertisers who saw the potential,” says Dwivedi. One such advertiser, Poland Tourism, is the game’s main backer on the Android platform. Similarly, Dexati’s Modi Run has generated returns through advertisements which, till date, are 10 times its initial investment. While advertisements may be an irritant for users, they are a dependable revenue stream for app developers, particularly because mobile users may not be inclined to pay for such apps. Also, these apps are more popular on the Android platform where only 3 per cent of the apps downloaded are paid for. Some developers, however, have decided to forego profits from their apps. Games2Win, for instance, has kept its game free of advertisements and is not planning on monetisation. “Our focus right now is to give a good user experience,” says Vyas. Riding the election wave, mobile app developers have managed to generate interest among users. The big question is: How will they transform themselves once the elections are over? (This story was published in BW | Businessworld Issue Dated 02-06-2014)
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As market data clearly shows over the last months, key economic indicators for India have made for ever depressing reading. The slow down in G DP growth, industrial pr oduction (IP) and also slip in the value of the rupee against the US dollar have made observers jittery about India’s future growth prospects. While, expected increasing pressure on inflation from higher fuel costs is expected to negatively impact household expenses. Therefore, it is not surprising that the automotive industry is also feeling the pressure, with year-on-year new vehicles sales down 12 per cent in May 1, as fewer consumers visit their local showroom to buy a new-vehicle.Recently, we asked over 600 dealers across India about their business and how satisfied they were with the support they were receiving from the manufacturer. The results from the 2013 J.D. Power Dealer Satisfaction with Automotive Index study, or DSWAMI for short, showed that one-in-five dealers expected to make a loss, up from 9 per cent, in the financial year 2012-13 and only 44 per cent of dealers anticipated to make a profit, down from 62 per cent the previous year.Although the results of the study make for some sobering reading for a number of OEMs, it also highlights how important the partnership between the manufacturer and the dealer is on improving both positions.Indeed, not all dealers are struggling in the market, and results from the study showed that Toyota and Maruti Suzuki were notable for the high ratings their dealers gave on measures around t he support and concern provided by the OEMs on their business requirements. Importantly, the majority of the highly satisfied dealers referred to a strong partnership existing among themselves and the brands they represent.Fundamental for dealers’ viability is the ability to increase footfall and sales in th e showroom, as well as promoting increased loyalty for their service business. Notable in the finding is that after-sales and the spare parts represent more than 40 per cent of the revenue for dealers and new car sales account for only 28 per cent on average. Therefore, ensuring customers repeatedly come back to the dealership for service is a critical part of the dealers’ revenue stream. Brands that both support and encourage their dealers to provide excellent after-sales care, and support them with operational efficiencies in the supply chain, will be in a better position to secure future business for their network.Moreover, those automakers who work closely with their dealers to make the service visit more enjoyable also benefit greatly in terms of improved customer loyalty. From the most recent J. D. Power In dia Customer Satisfaction Index study, 93 per cent of after-sales customers who reported the highest level of satisfaction (in the upper quartile of satisfaction) said they woul d definitely revisit the same dealer for both service work during and post warranty coverage. This was in stark contrast to less than half of customers wh o reported satisfaction levels in the lower quartile reporting similar intentions.However, for an automotive brand to fully succeed in India and help maintain the viability of their dealer network they have to match the ever-changing customer requirements in their product lines. The DSWAMI results show over 85 per cent of dealers, including those of Maruti Suzuki, Hyundai, Mahindra and Toyota report they have the right model line-up to compete in the market, but for some notable volume players this is not the case. For two key volume brands, less than 65 per cent of their dealers agree that they have right product line-up to compete effectively in the market.Honda, for example, whose dealers score the brand below the study average has a relatively limited product range. While, Tata despite having a st rong product range on “paper” arguably suffers from a relatively dated product line-up. This further underlines the importance the refreshed and new models, including Hond a’s first diesel model in India, the Amaze, have in promoting increased sales.Moreover, from J.D. Power’s analysis on new-vehicle shoppers, the top three rejection reasons are related to high fuel consumption, the purchase price and thirdly the exterior design. This also underlines the need for manufactures to support their dealers with strong value propositions - that cross the whole model range - and are complemented with designs that match Indian consumer preferences. Notable with changing lifestyles and aspirations, customers are becoming more discerning about the products they want, be it with the quality, ownership costs and styling of the vehicles offered. Strong sales performance of the Renault Duster, Maruti Ertiga, Mahindra XUV500, alongside the growing number of other smaller SUV models entering the India market highlights the importance that Indian buyers place on new vehicle segments. While, new entrants like Datsun, expected to introduce a range of new models in 2014 shows a growing tendency amongst foreign OEMs to focus on product designs more attuned to the needs of consumers in India.Therefore, in a challenging sales environment it is important that OEMs work closely with their dealer network in order to increase service retention and deliver a product line-up that matches the needs and aspirations of Indian customers. Brands which have been able to support their network on these areas, have been given the thumbs-up by their dealers in the 2013 DWSAMI study and show that for some dealers hostile market conditions can be overcome through proactive planning and greater customer centricity.The author is Executive Director, J.D. Power Asia Pacific
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Several multinational enterprises have set up Indian subsidiaries engaged in Research and Development (R&D) services. These captive service providers, also called R&D Centres or Indian Development Centres (IDC), are set up to take advantage of the talent pool and cost advantage of India. These centres can be put under three categories — entrepreneurial, those based on cost-sharing arrangements, and contract R&D service providers. The centres of the first and second category carry out significant functions and assume significant risks, while the functions and risks associated with the third type are minimal.The disputes between taxpayers and tax authorities have been on two accounts – characterisation of the IDCs and resulting compensation structure. In most cases, taxpayers claim the centres to be of the third category, having minimal functions and risks, while tax authorities take the position that the centres have greater functions and risks leading to creation of intangibles. Thus far in India, dispute had been around the quantum of mark-ups. However, this landscape was sought to be changed dramatically with the issue of two circulars (both issued on 26th March 2013) by the Central Board of Direct Taxes (CBDT). Circular 3 provides five conditions which an IDC must fulfil cumulatively to qualify as a low-risk service provider that is entitled to a cost plus treatment. Circular 2 provides for the consequences that follow if an entity fails one or more of the five conditions provided in Circular 3. Among the five conditions mentioned in Circular 3, three refer to “economically significant” functions, assets and risks that should not be performed, used or borne by the Indian entity to qualify as a limited risk R&D service provider. These circulars sought to introduce a new approach which ran contrary to conventional transfer pricing principles. Under this approach, it was presumed that major risks cannot be managed by the principal and the routine functions performed by the R&D centre resulted in assumption of significant risks and creation of intangible assets. Accordingly, if the Indian captive service entity performs entire range of R&D functions without any significant assistance from the foreign principal, it is considered to be the economic owner of the intangible and is entitled to receive a portion of the non-routine returns derived from the intangibles developed by the IDC.Mere funding of the R&D by the foreign principal does not entitle the funding entity to the entire residual profits. Apparently, Indian tax authorities drew support from the recently released United Nations Manual on Transfer Pricing and the Organisation of Economic Cooperation and Development (OECD) discussion draft on intangibles which seem to bless the approach of economic ownership of intangibles by the party which creates them without any outside supervision or control. Unfortunately, the extent of supervision and control is rarely black or white, and we expect persistent debate on the level of independence that tips over an entity from being characterised as a service provider to being an intangible owner. Furthermore, if an entity is characterised as an intangible owner, questions around the value of platform intellectual property and the appropriate return on investment for the investing entity will cause further debate. Obviously, in the absence of clear guidance as to what would amount to “economically insignificant”, the conditions were fraught with uncertainty. The most onerous consequence provided in Circular 2 that arises on account of being treated as a risk bearing R&D centre is the application of profit split method and rejection of the cost plus mechanism under Transaction Net Margin Method. It further mandated that in situations where PSM cannot be applied and cost plus structures have to be perforce accepted with suitable upward adjustments to the mark-up to account for transfer of intangibles and location specific advantages.It is quite clear that the positions taken in the two circulars were highly contentious. Apart from the challenge of determining the relative contribution of the Indian entity, the process of quantification of profits arising from India-specific intangibles can be quite a difficult task.Appreciating objections from all around, on 29th June 2013 the CBDT issued Circular No. 05 /2013 withdrawingCircular No. 2 observing that the said circular appeared to give the impression that PSM was the preferred method. On the same date CBDTissued Circular 6 amendingCircular No.03.An important feature of the revised circular is that the conditions mentioned are to be evaluated independently and not to be applied cumulatively for determining whether the development centre is a contract centre or not. Further, the conditions have been made more reasonable along with explanation of “economically significant” functions.The modifications brought in by CBDT would provide relief to R&D centres operating in India and hence is a welcome step. The revised circular will certainly provide the tax payer with an opportunity to explain the actual arrangement to the field officers and convince them that the development centre is a low risk or a contract development centre warranting a cost plus return. Needless to emphasise that it would be very critical to have a robust transfer pricing documentation with detailed functional analysis in place to demonstrate that the Indian development centre is a contact development centre.(S P Singh is a Senior Director with Deloitte Haskins & Sells and Gautam Mallick is Director with Deloitte Touche Tohmatsu India Private Limited)
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Most of us don’t realise it, but India is becoming increasing dependent on African countries. Recent months have seen increasing investment from India into African countries. Bilateral trade has risen sharply. And now the interdependence is at its highest level in history. Between 2001 and 2011, bilateral trade rose $10 billion to $63 billion. This was same as India’s trade with US at $63 billion. But the next three years will overshadow all previous growth. A study by Confederation of Indian Industry and the World Trade Organisation estimates that bilateral trade will balloon to $176 billion in the next three years. The surprising element here is that India now depends on African countries for 20 per cent of its petroleum imports. Just six years ago in 2005, India did not import any oil from African countries. Today the top importers from Africa to India are Nigeria, South Africa, Angola, Egypt, Algeria and Morocco. These countries export mostly oil and gold to India. This is a significant shift in the bilateral relationship which is benefitting both regions. For India it is important to reduce dependence on middle east for oil and for the African countries it was important to find more buyers to get the best price for their products. This growing dependence on Africa will be a key dynamic that will shape trade and investment with India. It is not just natural resources. There is a growing shift towards services and manufactured products. Indian tourists to Africa doubled. There was an increase of close to 50 per cent from African countries to India. While absolute numbers are growing, new opportunities in travel and hospitality are being tapped. Inorganic chemicals and pharmaceutical made in countries like Egypt, Morocco and South Africa are signs of rising imports of technology intensive imports to India. Efforts are on to invest in food processing industry in Africa by Indian companies so that the products can be imported back to India. Indian companies have invested about $32 billion in various projects in Africa. Now a reverse flow is emerging. Companies from Morocco and South Africa are leading the investment into India. These include FirstRand Bank and SAB Miller from South Africa to 74 per cent Moroccan joint venture with Paradeep Phosphate. The CII-WTO report says that as outward FDI from Africa grows, it is likely to head towards similar markets like India. Indian companies are now making clear distinctions between the diversity of regions within Africa. They are creating dedicated strategies for East, West, South, central and North Africa. Each of these regions is a unique market with specific strengths. Companies are increasingly choosing to specialise in a region and are not treating Africa as a single homogenous market. This approach promises to pay greater dividend as even African companies are studying Indian states before making trade decisions. The study has highlighted steps that need to be taken to remove hurdles to trade and investment based on a survey of Indian and African business leaders. Surprisingly, the problems are common. There is lack of market access and adequate knowledge of each other’s markets. Lack of trade finance and bilateral investment treaties is holding back transactions. While large companies have the ability to overcome such hurdles, mid-sized companies are hesitating to invest in the absence of institutional support. High cost of transport and logistics in Africa is a barrier and an opportunity for investment. Governments in both regions have to work harder to make business environment safer and easier. Africa’s trade with India grew by 48 per cent while with China it grew only 28 per cent between 2005 and 2011. This eye-opening fact should be tempered by mentioning that the Africa’s bilateral trade with China stands at $166 billion, more than double that of trade with India. But the higher rate of growth is an indication of where the economic relationship can go if the atmosphere is made more conducive. Removal of fundamental hurdles will ensure that Indian and African countries develop deeper and balanced ties that will be healthy and sustainable. (Pranjal Sharma is a senior business writer. He can be contacted at pranjalx@gmail.com)
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