New Delhi: Unlike previous visits by American presidents, President Obama has made it amply clear that this one is about jobs and exports beyond geopolitics. The deals announced on day one amount to $ 10 billion.
US firms such as GE, Boeing etc. are to benefit from the deals. The deals are said to create 50,000 jobs in the US. But, are the benefits of export led (aided by quantitative easing and a weak dollar) in the US limited to large Fortune 500 companies and their vendors, shareholders and employees? Can American small business, the engine of jobs take advantage of the booming Indian economy too?
Despite fiscal and monetary stimulus by the US government, the unemployment rate in the US is hovering near the 10 per cent mark. The weakness in consumption outlook is not helping American small business, traditionally focused on the domestic market. As a result, the pace of job creation is affected.
In essence, the US consumer and small businesses are not able to help each other. Exporting to emerging markets, including India, is a possible solution.
However, exporting to India and other emerging markets takes capital, time to market and operational/marketing expertise. Indian customs laws remain byzantine and ever changing. FDI in multi-brand retail is something the Indian government is still undecided about. Given the credit situation and lack of experience in exporting, American small business might not exactly find the Indian consumer market a low hanging fruit.
But there might be help around the corner. There is a growing interest among affluent and upwardly mobile Indians to buy global products/brands from India, even those products/brands not readily available in India. There are companies that import goods from the US to cater to such needs, be it electronic gadgets or musical instruments or designer shoes or outdoor adventure gear.
20North, one such venture from India helps consumers in India buy goods from the US without logistics and customs hassles. 20North has also started working with American suppliers to help them in market development - study the Indian market, sell and build brands in India with very little upfront cost.
Jawad Ayaz, CEO of 20North says, "We offer American small business the ability to test the Indian market and be present here as a brand without having to commit tens of millions of dollars into doing so. We are in discussions with bilateral trade agencies and will soon announce deals with some American brands to represent them in India". Ayaz declined to divulge further details.
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