How to set up a business in Mumbai

Mumbai train terminal

Is this hyperactive megacity the ideal base from which to tap into the purchasing power of India’s burgeoning middle class? Our local experts certainly think so, citing its ambitious infrastructure plans, well-educated workforce and unquenchable entrepreneurial spirit

When foreign heads of state visit the UK, you generally know what sort of welcome they’ll be afforded: red-carpet receptions, black-tie banquets and a spin down The Mall in a gilded carriage, maybe. But few monarchs or presidents get the rock-star treatment that India’s PM, Narendra Modi, enjoyed in November 2015. A rally held in his honour – featuring a specially composed Hinglish theme song and what the organisers claim to be the UK’s largest fireworks display – packed out Wembley Stadium with supporters. The greeting may be slightly more subtle when Modi returns in April (firing off more rockets to mark his arrival at the Commonwealth heads of government meeting would be, well, flagrant favouritism), but rest assured that British politicians will be doing all they can to make him feel loved.

There’s a method behind the charm offensive. The International Monetary Fund has forecast that India’s GDP will increase by 7.4 per cent this year, making it the fastest-growing major economy. It’s on track to become the most populous nation by 2025 and, if Modi’s recent vow to build a £3.5trn economy is realised, it will also be the third-richest by that point, having leapfrogged the UK, Japan and Germany.

Mumbai is a microcosm of booming Brand India. This frenetic metropolis by the Arabian Sea is full of head-spinning contradictions. Nearly nine million of its 21 million citizens live in slums, yet if you peer up from the smoggy streets you’ll see sleek skyscrapers where many of the city’s 46,000 crorepatis – people with a net worth of Rs10m (£112,000) – rub shoulders with Bollywood stars. The world’s most expensive private residence is here: Antilia, owned by Mukesh Ambani, the MD of Reliance Industries, is a 27- storey tower with three helipads and a staff of 600. India’s wealthiest city is also home to the National Stock Exchange of India, banks such as Barclays and HSBC, and a cluster of fintech and insurance firms.

“If London’s the world’s financial capital, then Mumbai’s the financial capital of the emerging economies,” says Manoj Ladwa, a lawyer who served as communications director of Modi’s 2014 election campaign and co-founded the Europe India Forum, which organised his Wembley welcome.

The commercial environment will be familiar to UK firms looking to set up in Mumbai, says Cobra Beer’s co-founder and chairman, Lord Bilimoria. “The language of business is English, while the legal and financial systems of the UK and India are based on similar principles. It’s far easier to do business here than in, say, China,” he adds. “From a commercial point of view, you’re on the same wavelength.”

Mumbai is luring a range of ventures from the UK, reports Janhavi Dadarkar, a director of the Europe India Forum and an IoD course leader specialising in corporate governance. “Ten years ago everyone went to India for outsourcing, as it was the cheap option. Now businesses are going because of its expertise – its highly educated middle class – and tech,” she says. “Mumbai offers no benefits as a low-cost manufacturing base, but it’s a fantastic place from which to sell goods and services to Indian people.”

Despite these favourable trends, it’s evident that the “special relationship” between the UK and its former colony has been neglected. In the 1960s, India was second only to the US as a British export market. Today, it ranks 18th. India now buys more goods and services from Iraq and Nigeria than it does from the UK.

Indian PM Modi

Indian prime minister, Narendra Modi

Business friendly

As the “Mo-di! Mo-di! Mo-di!” chants echoed around Wembley, there was a relatively small, but similarly vociferous, protest outside the stadium against his visit, held by the Awaaz human rights network. When Modi was chief minister of Gujarat in 2002, more than 1,000 people, mostly Muslims, died in a wave of religious violence across the state. A 2010 Supreme Court investigation found no evidence of his complicity in the riots, but many of Modi’s opponents remain deeply unhappy with its finding. Although his authoritarian premiership has widened political divisions at home, his actions have generally been business friendly. By cutting a lot of red tape, he has helped to increase foreign investment in India during his four years in office, for instance.

Modi’s most radical reform came on 8 November 2016, when he demonetised the nation’s two most used banknotes (Rs500 and Rs1,000) without warning, partly to tackle corruption. This caused widespread panic at the time, yet Dadarkar believes that the move has proved “good for foreign companies, because it’s reduced the amount of black money in circulation. Corruption was a big concern before that. Now, the customers that UK firms deal with here are likely to have bank accounts.”

It was the first step in Modi’s plans to make India a digital economy, which include creating a biometric database of all citizens – no mean task in a nation of 1.3 billion people. Such policies have had a positive effect, says John Dawes, a regular visitor to Mumbai in his role as a director of architecture firm Benoy.

“Developers now have their land records and titles online, rather than in a red box somewhere,” he reports. “This increase in transparency has been brilliant for foreign entrants. Filtering out the good from the bad was always a big challenge.”

The government is also investing heavily in the Delhi-Mumbai Industrial Corridor, touted as the world’s largest infrastructure project. Connecting the two cities will be a high-speed rail link and eight new “smart cities”. As Ladwa says: “There’s a lot up for grabs in high-end engineering, house-building and training for British companies.”

Chai wallahs in Mumbai

Chai wallahs delivering hot lunches in Mumbai

Similarly, the Indo UK Institute of Health (IUIH) is planning to build 11 “medicities” across India. The goal, says Howard Lyons, a non-executive director at the IUIH, is to form centres of excellence, including hospitals and medical colleges, that will “take NHS-quality care – available and affordable to all – and promote the NHS model” to 400 million Indians. With building work on the first medicity under way in Nagpur, the project is seeking more foreign “construction companies with experience of working in India and offering big opportunities on the medical equipment side”, he adds.

As well as its business-friendly environment, market potential and pool of talent, Mumbai offers another attraction for foreign firms: jugaad. Ladwa defines this as “real entrepreneurial spirit based on frugal innovation. Even with limited resources, you can make something great.”

This can-do attitude is personified by Mumbai’s thousands of dabba wallahs, who wheel their precariously stacked steel tiffin boxes safely through the chaotic streets each weekday to deliver hot lunches and afternoon chai (tea) and snacks to the city’s 200,000 office workers. Their estimated error rate is one delivery in 16 million, so it’s little wonder that FedEx has visited them to discover the secrets of their phenomenal reliability.

When Modi (who himself started out as a humble chai wallah) gave Indians less than two months to exchange their expired rupee notes before the end of 2016, banks were inundated with people applying to open accounts. Sure enough, businesses sprang up in Mumbai offering “helpers” to hold people’s places in the queues that formed outside branches. This is one of the reasons why Richard Heald, CEO of the UK India Business Council, compares the city’s entrepreneurial culture to that of New York. “There’s buzzy creativity, aggressive opportunism and a real carpe diem attitude here,” he says.

Marks and Spencer Mumbai

M&S has opened 11 stores in the city

Demand for luxury

Of course, Mumbai is also home to Bollywood, a £1.2bn industry that churns out well over 1,000 movies a year. The potential for Anglo-Indian tie-ups here is rich. Bilimoria cites Cobra Beer’s first TV advert as an example: the ad combined “British creativity (Saatchi & Saatchi) with Mumbai’s production facilities. It was ‘rightsourcing’, not outsourcing.”

Many Bollywood stars live in the trendy Bandra West neighbourhood. Ostentatious displays of wealth are common here among a young nouveau riche with a taste for western goods. The demand for luxury cars (Aston Martin has had a showroom in Mumbai since 2011) and Scotch (India is the third-biggest importer by volume) is strong here. M&S has 11 shops around the city, while Ikea is planning to open stores nationwide next spring. Given that 60 million Indians went online for the first time in 2014, it’s no surprise that Google, Facebook and Microsoft have established a presence here too.

It’s worth remembering that premium products are still affordable only to the wealthiest of India’s estimated middle-class population of 350 million. For many citizens, the price of the latest iPhone represents five months’ salary. Also, most western brands have hitherto been slow to penetrate the subcontinent. As The Economist recently noted, despite having been in India for two decades, McDonald’s still only has as many outlets here as it does in Poland. There are 100 Starbucks cafes in India, whereas there are 3,000-plus in China. More encouragingly for these companies, the OECD has forecast that India’s middle class will comprise 90 per cent of the population by 2039.

After an abortive first foray into India, Starbucks improved its chances of success in 2012 by entering a joint venture with Mumbai-based giant Tata – a name that reminds many Britons that Anglo-Indian trade is no one-way street. Indeed, India is the UK’s fourth-largest investor, with more than 800 Indian firms employing 110,000 people here. Tata has been credited with restoring Jaguar Land Rover’s fortunes after acquiring the ailing car manufacturer in 2008, for instance. And late last year it promised a £30m investment in new equipment at the UK’s largest steelworks at Port Talbot, West Glamorgan. This was a welcome sign for the plant’s 4,000 workers, whose jobs had been at risk ever since March 2016, when the company had initially announced plans to divest.

Despite India’s successes on the global stage, Ladwa believes that outdated views persist among many British companies, which still see it as a cheap outsourcing destination. “People sometimes go in with a narrow-minded idea of India, thinking it’s low-tech,” he says. “In doing so, they’re missing some real opportunities.”

According to Heald, an easy mistake is to “classify India as one homogenised unit” instead of a diverse collection of states like the EU. Dadarkar agrees. Anyone planning to market their product nationwide will “find it very difficult, as each state has its own culture,” she says. “We’d advise any IoD member who wants to take their business into India to target one state first.”

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Social responsibility

India has made disappointingly slow progress in tackling social inequality, particularly sex discrimination. Mumbai can provide some strong female role models – for example, Deena Mehta, the first woman to become president of the Bombay Stock Exchange – but the hierarchical structure of most Indian firms tends to reinforce the status quo.

Munni Trivedi moved to Mumbai from London in 2009 with her husband Mark Hannant and their two young children, setting up creative agency Magenta “from our dining-room table”. Nine years later, they are operating from swanky premises in Bandra West and also in Singapore, serving clients including Tata and National Geographic.

“You might think that I’d have an easier time in Mumbai and people would easily accept me here, given that I’m Indian,” Trivedi says. “But being a woman and Indian is actually a double-whammy, whereas Mark will often gain appreciation and trust when he goes into meetings just because he’s a westerner and a man. We’ve had to learn to work around this.”

Living cheek by jowl with heart-rending poverty can also be difficult. Any Indian firm making an annual profit exceeding RS50m must spend two per cent of this on corporate social responsibility projects – something that foreign companies in India “should do straight from the start”, according to Bilimoria. They should also make every effort to ensure that their workers are not being exploited. In January, for instance, a supplier to Hugo Boss was found to have been holding young women captive in its factory.

“Indian labour laws are actually more restrictive than those in the UK,” Dadarkar argues. “But you do need somebody good on the ground who can conduct factory checks here and uphold standards.”

Despite India’s social inequalities and chasms in wealth, Dawes notes that Mumbaikars have an innate egalitarianism. “At street-food stalls around the city, you will see people from every level of society – from the rich to the poor – queuing together in an orderly fashion. It shows a great respect for human beings.”

For many foreign visitors, such a scene encapsulates the Mumbai experience. The city may offer the perfect entry point to India – especially if you can harness some jugaad – but you should always expect the unexpected here. As Bilimoria says: “Mumbai is not a place where British businesses can go and make a quick buck. It’s where you should be looking 10 years ahead.”

Howard Schultz and Ratan Tata

The chairmen of Starbucks and Tata, Howard Schultz and Ratan Tata, launched their joint venture in India in 2012


India’s high commissioner to the UK has warned that an agreement may not be signed until 2030. Why is it proving so hard? 


Lord Bilimoria believes that Brexit has been “absolutely damaging” to the progress of an Anglo-Indian pact, while Indian firms that have set up in the UK are irked that it may no longer give them easy access to Europe.

“India has made it clear that its priority is an agreement with the EU,” he says. “This is far more important than a deal with the UK.”


The UK may have to relax its qualification requirements on visas for skilled workers and students from India before a deal is inked. As Bilimoria notes: “The government cut the multiple-entry visa for Chinese visitors to £85, yet Indians still pay over £300 for one. This sends all the wrong signals.”

Import duties

“The whisky market is growing significantly in India,” says Richard Heald. “But there are still tariffs on alcohol of 150 per cent, which nobody likes.”

While the UK let their relationship slip in the late 20th century, India busied itself agreeing deals with emerging economies in Asia and Africa. These may yet prove useful for British firms, says Heald, who notes that JCB owns five factories in India from which it exports its heavy plant.

Lord Bilimoria is a fellow of the IoD and Howard Lyons is a member of IoD Hertfordshire. Click here for guidance from Lyons on setting up in India

For advice on doing business overseas, visit

About author

Christian Koch

Christian Koch

Alongside his work for Director, Christian has written features for the Evening Standard, The Guardian, Sunday Times Style, The Independent, Q, Cosmopolitan, Stylist, ShortList and Glamour in an eclectic career which has seen him interview everybody from Mariah Carey to Michael Douglas through to Richard Branson with newspaper assignments including reporting on the Japanese tsunami and living with an Italian cult.

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