Doing Business in India For Dummies®

Planning an Exit: It’s Hard To Say Goodbye!

Ideally, an exit plan for your Indian business should be something like packing a parachute while taking a flight. It’s an obvious precaution, but one that is commonly overlooked. Entering into a business anywhere should involve doing a risk-reward analysis at the outset. If that’s done, any foreign investor is fully aware of the inherent risks and potential rewards from the beginning. An exit plan therefore comes into play only in extreme situations where just about everything has gone dreadfully wrong.

Exiting from a business in India isn’t much different than from doing the same elsewhere in the world. The financial and personnel heartaches remain much the same. Probably the only significant difference is the legal factor (Chapter 13 points out the Indian legal system.)

Knowing when to say when

If you’ve tried every trick you know, knocked on all the doors in sight, and your business still isn’t taking off, you may start thinking about pulling out. I usually advise my clients to try for at least a year, if possible. If at the end of that time you don’t see how you’re going to make it work, it’s time to call it quits.

But don’t lose heart. One foreigner I know came to India with the idea of getting into the leather business. He went all out to make it work, but for one reason or another, he found that he couldn’t get the necessary clearances even after a year of trying. So he reluctantly had to abandon his plans. He did have a silver ...