2010-23963. U.S. Franchise Trade Mission to India Mumbai, Hyderabad, and New Delhi

Mission Description

The United States Department of Commerce, International Trade Administration, U.S. Commercial Service (CS) is organizing a Franchise Trade Mission to India (Mumbai, Hyderabad, and New Delhi) from April 10-15, 2011. The mission will be led by a senior official and will focus on assisting U.S. franchise companies to launch or increase their business in the Indian market. The mission will help participating firms gain market insight, make industry contacts, solidify business strategies, and advance specific projects, with the goal of increasing U.S. business in India.

India is witnessing an unprecedented consumption boom. While the rest of the world still faces the impact of the economic slowdown, India is growing at approximately 8% per year, the second fastest growing economy in the world. This rapidly growing economy has led to a population of over 300-350 million middle-income Indians with high disposable incomes. This group continues to fuel the consumption demand in India. Mission participants will have a first-hand opportunity to assess the market potential in India and meet with key partners. The mission will include business-to-business matchmaking appointments with potential master and regional investors, networking events and meetings with potential investors. The delegation will be comprised of U.S. franchise representatives in various industry sectors with the potential to open or increase operations in India.

Commercial Setting

India is a rapidly changing country. The many factors that contribute to increasing consumption there include the emergence of a young urban elite population with increasing disposable income, changing lifestyles, mounting aspirations, penetration of satellite TV, increasing appetite for western goods, international exposure, options for quality retail space, and greater product choice and availability. The greater demand for goods in India is in turn generating a greater demand for franchises.

The franchise market in India has the potential to grow to $20 billion by 2020. Franchising in India is growing at an impressive rate of approximately 30% per year. Presently, there are 1,200 franchisors in India, of which 25% are of international origin, with U.S. companies the most prevalent. The top prospects for franchising include: Food, education, retail, beauty salons/cosmetics, business services, apparel and travel/tourism. Based on these market trends and previous successes at post, we will focus on food, health/wellness, and services franchisors, as these represent the largest growth areas for U.S. firms.

• Food Franchising: The Indian food franchise sector is on fast-track growth in India. The organized food and beverage retail sector is worth approximately $280 million and is growing at 25-30% annually, with franchises constituting approximately 17% of this growth. Food chains such as Yum Brands, McDonalds, Dominos, and Café Coffee Day have aggressive expansion plans for India. Yum Brands, the parent company of the Kentucky Fried Chicken and Pizza Hut fast-food chains, plans to add 40-60 restaurants in the next 12-18 months. Dominos Pizza India has announced an investment of $55-58 million in India over the next three years for expanding its retail fast food chain and manufacturing capacities.
• Services: Contributing over 50% to India's GDP during FY 2009 (April 2008 to March 2009), the services sector holds the key for India's rapid economic growth. Education and training services, professional services, and hospitality services tops the list of growing subsectors in the services franchise sector.
• Health & Wellness: The $520 million Indian fitness market is growing at 40% annually. The Indian population, particularly young Indians, support the demand for personal fitness products. Middle class Indians are increasingly spending their disposable income on spa treatments, health clubs, and wellness programs due to a growing awareness to lifestyle diseases, peer-influence and exposure to media and advertising.

Now is the time for U.S. franchises to enter the Indian market. After years of advocacy efforts, in December 2009 the Government of India announced a liberalized policy that royalty payments/franchise fees (both one time and ongoing) will not need prior approval from Government authorities, including the Reserve Bank of India. In addition, the caps of $2 million on one time fees and 5% on ongoing fees have now been removed. With these hurdles cleared, more U.S. franchises will seek opportunities in India.

Mission Goals

The goals of the U.S. Franchise Trade Mission to India are to: (1) Introduce U.S. mission participants to the vibrant Indian market, especially in the three main metropolitan cities of Mumbai, Hyderabad and New Delhi; (2) assess current and future business prospects by establishing valuable contacts with prospective investors, franchisors, and franchisees; and (3) develop market knowledge and relationships leading to U.S. export sales.

Mission Scenario

The trade mission will be a springboard for U.S. companies planning to enter the Indian market. Besides learning first-hand about the market and its potential, the trade mission will help U.S. franchisors to initiate or expand their business in India by providing business-to-business introductions and market access information. The mission will also provide networking opportunities for participating companies. The trade mission participants will have the opportunity to participate in briefings, one-on-one matchmaking meetings, site visits, and networking receptions.

The first stop on the mission itinerary is Mumbai, the business and financial center of India, to participate in matchmaking meetings, briefings with industry associations, and a networking reception. CS Mumbai will arrange matchmaking meetings with potential franchisees as well as investors. CS Mumbai will seize opportunities to tap into the wealth of industry contacts and offer matchmaking, and networking opportunities for the mission members.

Then the group will travel to Hyderabad, a booming organized franchise market in India and a destination of many global franchise brands. Hyderabad is the capital of the state of Andhra Pradesh and has a population of 7 million. Hyderabad is India's 5th largest metropolis and is gaining recognition as a dynamic trade and franchise investment destination for many U.S. franchisors, such as Church's Chicken (the first outlet in India) Hard Rock Café, Curves, and more. The trade mission participants will have the opportunity to participate in briefings, a networking reception, and one-on-one meetings.

Finally, the delegation will visit New Delhi, the capital city of India. New Delhi is the largest commercial center of North India and is one of the fastest growing cities in Asia. Along with its satellite towns, New Delhi is the sixth largest metropolitan region in the world, with an estimated population of 20 million, and has a buoyant private sector. With more than 160 embassies and an ever-growing expatriate population, New Delhi is a cosmopolitan city, with its own multi-ethnic and multi-cultural presence.

Participation in the mission will include the following:

• Pre-travel briefings/webinars;
• Embassy/Consulate, and Industry briefings;
• Pre-scheduled meetings with potential partners, investors, and franchisors in Mumbai, Hyderabad, and New Delhi;
• Airport transfers in Mumbai, Hyderabad, and New Delhi;
• Participation in industry receptions in Mumbai, Hyderabad and New Delhi;
• Site visits in Mumbai and New Delhi;
• Newspaper advertisements in the three cities featuring the participating companies.

The precise schedule will depend on the specific goals and objectives of the mission participants.

Proposed Mission Timetable—April 10-15, 2011

Mumbai—April 10-12, 2011

Sunday—April 10, 2011

—Arrive in Mumbai

Monday, April 11, 2011

—Briefing

—One-on-one matchmaking meetings

—Evening Networking reception hosted by the Mumbai Consul General

Tuesday, April 12, 2011

—Morning Site Visit

—Afternoon/Evening departure for Hyderabad

Hyderabad—April 12-13, 2011

Arrive in Hyderabad and check into hotel

—Evening Networking reception hosted by the Hyderabad Consul General

Wednesday—April 13, 2011

—One-on-one matchmaking meetings

—Late Evening depart for New Delhi

—Arrive in New Delhi and check into hotel

New Delhi—April 14-15, 2011

Thursday—April 14, 2011

—Morning—Site visit to Select City Walk, an upscale mall located in South Delhi that houses numerous franchisee outlets. Site visit followed by hosted lunch.

—Evening Networking reception hosted by the Minister Consular for Commercial Affairs

Friday—April 15, 2011

—One-on-one matchmaking meetings

—Late evening/early morning (Saturday) flight back to the United States

Participation Requirements

All parties interested in participating in the Trade Mission to India must complete and submit an application for consideration by the Department of Commerce. All applicants will be evaluated on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. This mission is designed for a minimum of 12 companies to participate in the mission from the applicant pool.

Fees and Expenses

After a company has been selected to participate on the mission, a payment to the Department of Commerce in the form of a participation fee is required. The participation fee will be $4,885 for large firms and $4185 for a small or medium-sized enterprise (SME),* which includes one representative. The fee for each additional firm representative (large firm or SME) is $750.

* An SME is defined as a firm with 500 or fewer employees or that otherwise qualifies as a small business under SBA regulations (see http://www.sba.gov/​services/​contractingopportunities/​sizestandardstopics/​index.html). Parent companies, affiliates, and subsidiaries will be considered when determining business size. The dual pricing schedule reflects the Commercial Service's user fee schedule that became effective May 1, 2008 (for additional information see http://www.export.gov/​newsletter/​march2008/​initiatives.html).

Expenses for lodging, some meals, incidentals, and travel (except for transportation to and from airports in-country) will be the responsibility of each mission participant.

Conditions for Participation

• An applicant must submit a completed and signed mission application and supplemental application materials, including adequate information on the company's products and/or services, primary market objectives, and goals for participation. If the U.S. Department of Commerce receives an incomplete application, the Department may reject the application, request additional information, or take the lack of information into account when evaluating the applications.
• Each applicant must also certify that the products and services it seeks to export through the mission are either produced in the United States, or, if not, marketed under the name of a U.S. firm and have at least fifty-one percent U.S. content.

Selection Criteria for Participation

• Suitability of the company's products or services to the mission goals.
• Applicant's potential for business in India, including likelihood of exports resulting from the mission.
• Consistency of the applicant's goals and objectives with the stated scope of the mission.
• Additional factors, such as diversity of company size, type, location, and demographics, may also be considered during the review process.

Referrals from political organizations and any documents containing references to partisan political activities (including political contributions) will be removed from an applicant's submission and not considered during the selection process.

Timeframe for Recruitment and Applications

Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Commerce Department trade mission calendar (http://www.ita.doc.gov/​doctm/​tmcal.html) and other Internet web sites, press releases to general and trade media, direct mail, notices by industry trade associations and other multiplier groups, and publicity at industry meetings, symposia, conferences, and trade shows. Recruitment for the mission will begin immediately and conclude no later than February 18, 2011. We will inform applicants of selection decision as soon as possible after February 18, 2011. Applications received after that date will be considered only if space and scheduling constraints permit.

Contact Information

Newport, CA U.S. Export Assistance Center

Kristin Houston, Senior International Trade Specialist & CS Global Franchise Team Leader, Tel: [phone], ext. 314, E-mail: [e-mail].

U.S. Commercial Service in India

Mala Venkat, Commercial Specialist, Chennai, Tel: [phone], E-mail: [e-mail].

Aliasgar Motiwala, Commercial Specialist, Mumbai, Tel: [phone], E-mail: [e-mail].

Sathya Prabha, Commercial Assistant, Hyderabad, Tel: [phone], [e-mail].

Smita Joshi, Commercial Assistant, New Delhi, Tel: [phone], E-Mail: [e-mail].

Karen A. Dubin,

Global Trade Programs, U.S. Commercial Service, Office of Trade Missions.