The crashing Sensex notwithstanding, foreign direct investments (FDIs) coming into our country are growing day by day. Furthermore, India is still a very attractive destination for investors. An all seem to believe that the Sensex will rise again, bringing the foreign institutional investors (FIIs) back.

But these facts require us to focus on whether we (Indians) are the right people for foreigners to bank on?

One of the ways through which we get foreign direct investments (FDIs) is joint ventures (JVs). This is where a foreign company ties up with an Indian one for business opportunities.

Both of them come together to gain from the partnership.

Kautilya has a word of advice for these situations too.

He says, that for such JVs to succeed, there should be a win-win situation between the two partners:

“In a work that can be achieved with the help of an associate, he should resort to a dual policy” (7.1.18)

Dual policy means a win-win policy.

We require funds for new business opportunities. Thus, an investor becomes an associate.

Any one of the new, private insurance companies could make a perfect illustration for understanding JVs. These young insurance firms are pure joint ventures between an Indian company and a foreign one. Both come together in the field of insurance when the government opened up the sector for FDI.

The Indian partner in the JV has got experience of Indian customers. While, the foreign investor is an expert in insurance. As India is a new market for the latter, it gains knowledge of the market by tying up with its Indian counterpart. While the domestic firm benefits from venturing into another business field, riding high on the years of experience of its foreign backer. This is win-win situation.

Here are some tips on how to get into successful joint ventures:

1. Be sure of your expertise

Your organistion should be good in one area at least. You should be an expert in that field with a proven track record.

2. Make a business plan

Make a business plan in order to approach a possible investor for expanding your current business. Make sure that, when you approach him, it has to be a win-win situation. You get the investment and he gets your expertise.

3. Find like minded partners

Just getting an investor does not solve your problem. Both need to trust each other and should be able to see a value addition by coming into the partnership.

Both the partners should be a support to each while running the business.

“Finally it’s not weather we lost money in our JV that counts”, said an investor, “rather, it’s if we bet on the right person”

Be that right person and, once again set the stock market on fire.

Contributed by Radhakrishnan Pillai