How to Find a Supplier for Your Products in India
India is becoming an increasingly popular destination for finding product suppliers. The country has been pushing an entrepreneurial agenda and has reduced obstacles for both, Indian as well as foreign companies.
This guide will provide you with some thoughts on the benefits and risks associated to using an Indian supplier. You’ll also be able to find tips on how to find a suitable supplier and start ordering products. Since we’ve previously looked at how to find suppliers in China, we will compare the two countries at the end to help you decide which option is better for your business.
QUESTIONS TO ANSWER BEFORE LOOKING FOR AN INDIAN SUPPLIER
India is enhancing its position on the global stage quite quickly. Recently, its economy has been growing faster than the Chinese economy. In 2015, the Indian government launched its “Make in India”-campaign, which aims at attracting more businesses to the country and at increasing the country’s status as manufacturing location.
But before you head out to India, you need to consider the benefits and risks. You should also know why you want to find a supplier in India in the first place.
Do you want to sell your products in India or simply cut manufacturing costs?
Finding a supplier in India might be more reasonable, if you are also planning to sell your products on the Indian market. This could be a perfect way to cut down logistics costs, although you should be aware of logistics issues in India. Moreover, India could also be a viable entry point to other growing Asian economies.
On the other hand, if you are considering India simply to save costs, you need to consider your other options as well. Labor costs in India are, for example, still higher than in China and therefore, you might find cheaper suppliers elsewhere in Asia.
What type of quality do you expect?
Naturally, you should consider the product quality as well. Indian suppliers are catching up with Chinese and even western suppliers when it comes to product quality.
Are you prepared for the complex legal landscape?
You also need to be aware of the complex legal landscape in India. Labor laws protecting workers have improved over the years, but this could occasionally put companies into awkward situations if their supplier does not comply with these standards. Therefore, you should be aware of the contractual obligations before you sign any permanent contracts with your Indian supplier.
Payment issues are relatively straightforward in India. Since most major western banks operate in the country, this aspect of doing business with an Indian supplier shouldn’t be too problematic.
Can you deal with a different business culture?
India is culturally extremely diverse. Hence, business etiquette can be quite different, depending on where you actually are. As cultural differences can easily cause confusion when meeting or dealing with Indian business partners you should familiarize yourself with the Indian approach to business first. It can’t harm to hire an intercultural consultant if you feel insecure in this matter. However, in bigger cities there is an understanding about western businesses and what customers, as well as businesses, expect from Indian suppliers.
Check out the below CNN clip over the challenges of doing business in India:
UNDERSTAND YOUR NEEDS – WHAT DO YOU EXPECT FROM A SUPPLIER?
Besides understanding the benefits and risks of finding a supplier in India, you should also define your needs before venturing into the country. You should have a clear idea of what you expect from the supplier, not only in terms of the actual product, but also when it comes to the entire business process.
Before you start selecting potential suppliers, analyze your needs asking yourself the following questions.
- Do you want a manufacturer or a third party supplier?
You should be clear about the type of supplier you are looking for to guarantee you don’t waste time talking to the wrong businesses. The process can differ if you wish to work directly with a manufacturer rather than a supplier.
- Do you wish to deal with a small company or a big corporation?
Larger corporations often have better resources available, with the process running smoother. On the other hand, the costs can be higher and you might be required to order a certain amount of products.
Small companies can be a viable option – the relationship is often closer and they might be able to adapt the product according to your individual needs.
- What is your budget?
Be clear about your budget, as you can easily end up spending a lot more money than you want to. Ensure your supplier outlines all the associated costs upfront, as you don’t want to find out about additional expenses later down the line.
Furthermore, make sure to check whether the possible deposit will be paid back in case the products aren’t of an adequate quality.
- What product/service features are essential? What features do you consider a bonus?
Finally, you need to carefully analyze what you want from the product, as well as the customer service you expect. Are there certain features, which are essential? Could you do without certain features?
This way, you won’t be surprised by the final product or end up paying for things you don’t even need from the supplier.
Answering the above questions can save time and money. Since you are more aware of the service and product you are looking for, you won’t waste your time talking with inadequate suppliers. The above is also vital information for sourcing agents and lawyers you might use during the process.
BEGIN YOUR SEARCH – USE ONLINE AND OFFLINE RESOURCES TO IDENTIFY POTENTIAL SUPPLIERS
Once you’ve clearly defined the type of supplier you want and set your mind on finding one in India, it’s time to begin searching for the right supplier. There are a number of options available in India, with some suppliers offering better service and product quality than others. Finding the best option in the sea of suppliers won’t happen overnight and you should be prepared to conduct proper research before you place any orders.
It’s a good idea to keep track of suitable suppliers with a simple spreadsheet. You can add basic information to the file as you conduct research, which allows you to delve deeper into the candidates later on. Just include the supplier’s name, contact details, website address and any other possible notes in your file for further reference.
Conduct preliminary research on the Internet
Your first point of research should be the Internet. Google search “suppliers in India” and you will find tons of information on possible candidates and get further insights into the process. If you want to narrow down your search, use keywords related to your business and the industry. For example, you could search for “technology suppliers in India”.
Furthermore, you definitely want to check out social media channels. Platforms like LinkedIn are full of professional groups focusing on Indian suppliers. You can easily connect with suppliers, as well as other companies who operate in India through these channels. You should visit groups such as PCB India and Indian Trade Network.
Browse B2B websites
B2B websites and business directories are a handy way to find suppliers. Whilst there are numerous websites out there, the below sites are worth visiting:
The above sites are trusted platforms, but be aware that certain sites or suppliers in these directories are not always legitimate. It’s important to use verified and certified websites and suppliers to avoid any issues with your orders.
Talk to trade organizations and business chambers
You should also connect with different trade organizations and business chambers operating in India. For example, your country might have a business chamber in India, which is able to connect you with Indian suppliers directly. Don’t forget that you can also contact business chambers and trade organizations of other countries. If you operate in Europe, the European Union’s business chamber in India can provide you plenty of resources.
You can find trade organizations and business chambers by searching them with keywords such as “[country] business chamber India” or “[country] trade organization India”.
Furthermore, there are a number of trade associations and trade shows which operate in India. These are great for contacting suppliers and talking to them directly. Large industry trade shows in your country are likely to have Indian representatives as well. Before you attend these trade shows, you can contact the organizers to ensure Indian suppliers are represented.
In addition, you could visit India and participate in trade shows there. Most of the trade fairs take place annually and they are generally industry specific. A large number of these fairs typically take place in Mumbai, which is the centre of Indian trade.
Finally, GlobalSources.com organizes sourcing events online. These, together with their private sourcing events, can be a great chance to find an Indian business partner.
Network with other companies
When you are setting your sight on foreign suppliers, it’s beneficial to research your competition. You want to know whether your competitors are using foreign suppliers and if so, where are they sourcing their products.
Furthermore, you should also look beyond your rivals and talk to other companies, whether they operate in the industry or not, to understand the benefits and risks of sourcing in India. There are plenty of companies doing business in India that may help you to get in touch with local suppliers or sourcing agents.
In addition, these companies can help you understand the process better so you can avoid some of the pitfalls of using Indian suppliers.
Consider hiring a sourcing agent
Finally, you might want to consider using a sourcing agent. If you don’t have time to conduct research on your own or you don’t feel confident in your ability to find a suitable supplier, sourcing agents can do all the hard work for you.
Obviously, sourcing agents will add to your overall costs, but you should consider whether the additional expenses are worth it. Be aware that different agencies might operate under different fee structures, which could cause additional costs in case things don’t go according to your plan. Therefore, be aware of the fees before you hire an agent.
Furthermore, just like with B2B websites and directories, there are all sorts of sourcing agents out there. You need to check the agency’s credibility and license before you sign a contract with them. Again, you could ask business chambers or other businesses, which have chosen this route, to provide feedback and contact information of suitable candidates.
CONTACT YOUR SUPPLIER CHOICES, DON’T BE AFRAID OF A FACE-TO-FACE MEETING
The above channels should help you discover a number of suppliers in India. Once you have enough potential candidates in your file, you can start approaching these companies. The good news is that Indians generally are proficient in English and therefore communication shouldn’t be a problem.
It’s also worth noting that many Indian suppliers have representatives operating in other countries. This is especially true nowadays, after the Indian government has launched the “Make in India” campaign. You can check out whether your potential suppliers have local representatives and arrange a face-to-face meeting with them.
If you’ve previously made any local contacts in India, you can use these relationships as a point of reference as well. Business chambers operating in India can be especially valuable at this point.
You can also visit India yourself to meet face-to-face with suppliers. If you are planning such a trip, remember to arrange the meetings before booking your flights. This ensures that you make the most of the visit and are able to meet with as many suppliers as possible.
At this point, you should also hire a law firm to help you with legal due diligence and other related paperwork.
CHECK THE PRODUCT QUALITY AND CUSTOMER SERVICE
After the initial contact with some of the suppliers, you can narrow down your list further and order sample products from them. It’s important to only start with a small order, as you don’t want to end up with thousands of products, which aren’t what you needed. A sample batch will guarantee you are happy with the quality.
When you are ordering the samples, remember to focus on two things:
- The quality of the product – Are the products exactly what you wanted? If there are issues with the quality, can they be fixed?
When you receive the sample products, test them with your customers or friends and family. Do they like them? What sort of feedback are they providing to you?
- The quality of the service – Focus also on how the supplier deals with the order. Are you satisfied with the customer service? How does the supplier respond to your queries and issues?
If you aren’t satisfied with either the product or the service, don’t hesitate to walk away from the deal. You should first see if the supplier is responsive and able to handle the small issues. You don’t want to waste time with a non-responsive or non-cooperative partner.
FOLLOW UP, FINALIZE THE DEAL AND BUILD A LONG-TERM RELATIONSHIP
Finally, after you’re satisfied with the samples, you can follow up with your chosen supplier and finalize the deal. Take your time building up the relationship and create a better working relationship with the supplier. Also, keep an eye on the product quality. It might change after time, so consistent quality assurance on your side is mandatory.
At this point, you should hire a legal expert to help you out with the documents. Whilst it’s possible to draft the documents on your own, having a legal expert on your side can provide extra peace of mind. If you aren’t expert in dealing with foreign suppliers, external help can close the knowledge gap.
You should also negotiate the payment process with the Indian supplier. As mentioned above, many major banks operate in the country to make the process smoother. Furthermore, you can also consider the benefits of using services such as Escrow and Paypal, especially if the payments are relatively small.
Finding a supplier for your products in India will take a bit of time and you don’t want to skip doing research. There are a number of benefits to using an Indian supplier, but you also need to be aware of the risks and potential hurdles. Remember to consider your options before you select an Indian supplier. Other foreign suppliers might be worth considering and you could even find better alternatives closer to home.
CHINA VS. INDIA – WHICH ONE SHOULD YOU CHOOSE?
If you have read our article “ How to find a supplier for your products in China” you may want to compare the strengths and weaknesses of both countries.
China’s strengths still lie in its low cost suppliers, with the country enjoying improved quality control and enhanced technological expertise. Businesses in China have been operating with foreign companies for quite a few years now and mutual understanding over business practices has improved. On the other hand, the legal landscape in China can be quite complex and you need to be careful with things such as intellectual property rights.
India is also building up its expertise on a global stage.. The country is also more accustomed and open when it comes to foreign businesses, which can be a huge advantage. The downside in India is that the country’s logistics are still underdeveloped and the legal framework can be difficult, especially in terms of contractual agreements.
Ultimately the choice boils down to what type of supplier you are looking for. Both countries offer huge market opportunities and there are a number of high-quality and cost-effective suppliers in these countries. It is important to map out your needs first before looking into what benefits either country can provide for your business.
In Menlo Park (CA), we meet CEO and Co-Founder of GuideSpark, Keith Kitani. Keith talks about his …