V. Marketing U.S. products and services Following the 1991 reforms, India's international trade environment has been liberalized. Gaining access to India's markets requires careful analysis of consumer preferences, existing sales channels, and changes taking place now. Distribution and sales channels India is a Subcontinent, nearly 2,000 miles from north to south and 1,800 miles from east to west. India's coastline is 3,800 miles long and its area is 1.3 million square miles. Vast distances separate the most populous cities of India. Table 6. India. Population of major cities, 1991. City Population Bombay 12,572,000 Calcutta 10,916,000 Delhi 8,375,000 Madras 5,361,000 Hyderabad 4,280,000 Bangalore 4,087,000 Source: India. 1991 Census. There are no national department store chains. Shopping centers are unknown, though all cities have well-known market districts. Retail sales outlets are almost always locally owned. Buying and selling is often a process of bargaining and negotiation and frequently take place in a market. Outside the major metropolitan areas, India is an intricate network of rural villages. Poor roads make many rural districts inaccessible. Although villages may have satellite dishes and receive cable TV, moving goods is still much more difficult than broadcasting information in India. The largest cities of India, Bombay in the west, Delhi in the north, Calcutta in the east, and Bangalore and Madras in the south, give the country a strong regional character. Just as the languages in different areas vary, so too do consumer and business preferences and marketing practices. India has both organized and unorganized channels for selling goods. Before import liberalization, smuggling such luxury consumer items as color TV's, videotape machines, air conditioners, jewelry and gold developed into a thriving "unorganized" sector of the economy. By avoiding customs duties and delays, using cash transactions, and avoiding taxes, the unorganized merchants could offer better prices than those in the organized sector. One factor encouraging India's Government to reform was the growing revenue loss due to the activities of the "black" economy. Use of agents and distributors - finding a partner India has nearly 5,000 years of cultural history backing up its merchants and business families. The major business houses of India are large and powerful dynasties of family-owned businesses. An American executive learning about the business world of India will quickly learn some of the following names of India's prominent business families: Ambani. Synthetic textiles, textile intermediates, petroleum, petrochemicals, refining, and finance. More recent interest in telecommunications. Renowned for ability to manage government relations. Group name Reliance. Tata. Iron and steel, information technologies, hotels, power generation, automobiles, finance, consumer products, printing, engineering, consultancy, research & development and education. Several U.S. collaborations, including AT&T, IBM, Honeywell and Raytheon. Birla. Textiles, paper, jute, cement, steel, aluminum, shipping, automobiles, edible oils, engineering, education, consultancy, publishing and research institutions. Best-known companies are Century, Indian Rayon, Grasim and Hindalco. Thapar. Paper, telecommunications, electronics, textiles, glass, aquaculture. Best-known company is Ballarpur Industries. Goenka. Tires, telecommunications, power, cables, audio tapes & records, electronics, engineering, chemicals. Group name RPG, although there are other Goenka's with other businesses. Bajaj. World's largest manufacturer of two wheelers. Ruia. Shipping, steel, oil, finance. Group name Essar. Singhania. Textiles, cement, consumer goods, tires, paper. Group name JK. Hinduja. U.K.-based trading, manufacturing and financing conglomerate with strong political connections. Shriram. Fertilizers, automobiles, consumer goods, engineering, financial services, fibers, textiles, real estate, sugar. Group name Shriram and DCM. Modi. Steel, tires, electronics, chemicals, cement, telecommunications. Best-known collaboration is with Xerox for office automation products. Most group companies are not doing well. Mallya. Breweries, distilleries, aviation, pharmaceuticals, medical, processed foods, petrochemicals. Group name UB. New businesses, widely-held and professionally managed, are also part of India's business world: ITC. India's largest private sector company and largest export earner. Tobacco, hotels, edible oils, printing, packaging, financial services, software. Larsen & Toubro. India's premier engineering company in the petrochemical, cement, telecommunications, electronics and process machinery sectors. In many cases, the best advice we can offer an American who wants to do business in India is, "Pick the right partner." The more difficult question becomes, "Who is the right partner?" In identifying a universe of potential agents for your firm in India, you may wish to consider any of the following steps: A) Advertise your interest in a business journal or daily newspaper; B) Attend a trade fair or product exhibition in your industry; C) Contact your U.S. accounting, market research, or consulting firm for their contact lists in India; D) Order an Agent Distributor Service from the US&FCS. ADS. US&FCS India offers an agent distributor service for a user fee of USD 250 per post. On the basis of information provided by the U.S. client, a commercial specialist with industry expertise seeks to match the business interests of an exporter with three or more potential candidates. We provide a snapshot description of the market, identify the Indian firms who have expressed interest, and give an evaluation of their strengths and weaknesses. The Agent Distributor Service is a customized overseas search for qualified agents, distributors, and representatives for U.S. firms. We produce up to six foreign prospects that have examined the U.S. firm's product literature and expressed an interest in doing business in India. In addition to the information you develop through any of the steps above, you may wish to seek answers to some or all of the following questions. This will allow you to screen, qualify, and evaluate the potential business partners. Agency Agreement Data Sheet Name, address, telephone (office and residence), fax and telex numbers Tax registration number Years in business, year of incorporation Names and titles of principal owners, directors, and partners Background information on each principal manager or owner (qualifying education or previous experience, etc.) Past projects and contracts (customer, rupee value, service required, delivery date, current status of project or contract) U.S. commercial references (name, title, and company for any U.S. business you have a previous or current relationship with; did you work for a fixed fee, a commission percentage of the sale, or on a specific subcontract?) Company literature in English and an outline of capabilities Please state your preference for type and amount of compensation desired from this agency agreement Although publicly-listed Indian firms produce audited financial statements, small and medium-sized closely- held partnerships or proprietorships do not. Obtaining accurate and credible information to confirm the statements made by a potential agent can be a challenge in this market. U.S. firms may wish to consider obtaining the assistance of the US&FCS to prepare a report on a firm short listed as a business partner. WTDR. US&FCS India offers a World Traders Data Report (WTDR), a means of checking the reputation, reliability and financial status of prospective Indian trading partners. Information in a WTDR includes type of organization, year established, product lines, size, business reputation, principal owners, financial and trade references. A recommendation from the nearest US&FCS office as to the suitability of the Indian company as a trading partner for a U.S. firm is included. The user fee for this report is USD 100 as of June 1994. Franchising Franchising is almost unknown in India. The U.K.-based Wimpy's chain has opened several stores in Delhi, but the costs of land acquisition and the length of time required to obtain local governments' approvals for water, power, and other essentials have delayed the entry of major franchise operations. While Pepsico's Pizza Hut and the McDonald's Corp. have announced plans to open in India, both are moving slowly to avoid any unexpected disappointments. Direct marketing The mail service in India is slow though generally reliable. Telephone service is poor. While private courier services are growing strongly and the telecommunications sector is opening up for a range of modern services, until goods can be ordered conveniently and delivered with certainty, direct marketing will be limited to door-to-door sales. An inefficient state-owned banking system also prevents prompt transfers of funds from consumers to retailers. The most successful direct marketers in India today are the millions of door-to-door sales representatives who visit neighborhoods and villages across the Subcontinent. From ice cream vendors to carpet sellers, India's residential neighborhoods are frequently visited by merchants offering a variety of products. Joint ventures and licensing Between 1974-1991, U.S. firms were prohibited from owning 100 percent of their Indian operations. Under the Foreign Exchange Regulation Act (FERA) of 1973, the share of foreign equity in an Indian corporation was limited to 40 percent. U.S. firms found several solutions to the problems created by FERA. Kodak offered its shares to the Indian public. While Kodak owns 40 percent of its Indian affiliate, the other 60 percent is owned by thousands of private individuals. Not all U.S. firms took this option. Many, like Exxon, IBM, and Coca-Cola believed that they had no choice other than closing their businesses in India. Since 1991, the Government of India has taken a positive attitude toward foreign direct investment into India. The change in law and attitude is reflected in the fact that Coca-Cola, Exxon, and IBM have all returned to India, in one business or another. U.S. investment in India requires approval by the Foreign Investment Promotion Board (FIPB) and the reserve bank of india (RBI). Knowledge about the process and precedents will assist U.S. firms seeking such approvals. The U.S. Embassy promotes U.S. export-enhancing investment into India and can provide business counselling to U.S. firms on a client-confidential basis. India's 1991 economic reforms. The government of Prime Minister P.V. Narasimha Rao issued a "New Industrial Policy Statement" in July 1991 welcoming foreign direct investment (FDI) which will contribute to india's industrial development. The Rao government identified broad categories of industries and agreed to give automatic approval of foreign technology transfer and royalty agreements and foreign equity investments of up to 51 percent in these high-priority industries. The actual list of such industries is called the "Annexure III Industries" list and contains specific items listed with code numbers based on the indian trade classification. This list may be revised from time to time. Before applying for approval of a specific project, U.S. firms should seek competent legal, taxation, negotiating, financing, and accounting advice. High-priority (Annexure III) industries. High-priority industries, as defined by the government in Annex III to its statement on industrial policy of July 24, 1991, include: metallurgical industries; boilers and steam generating plants; prime movers other than electrical generators; electrical equipment; transportation equipment; industrial machinery and equipment; tools; agricultural machinery; earth-moving machinery; industrial instruments; scientific instruments; fertilizers; chemicals; drugs and pharmaceuticals; papers and laminates; heavy-duty rubberized and plastic products; plate glass; ceramics for industrial use; cement; high-technology reproduction equipment; carbon and carbon products; high-pressure rcc pipes; printing machinery; welding electrodes; industrial synthetic diamonds; biological products; prefabricated building materials; soya products; high-yield plant products; food processing; packaging; hotels and tourism; software development. U.S. investors seeking approvals. U.S. investors who wish to invest in industries not listed in the high- priority list (for example, in consumer goods, financial services, etc.) or those who wish to invest in a venture with more than 51 percent of the equity (including a wholly-owned subsidiary operation) must submit an application for approval to the Foreign Investment Approval Board (FIPB), which is located in the office of the Prime Minister, New Delhi. FIPB Members. The FIPB has four permanent members: The Principal Secretary to the Prime Minister (Mr. A.N. Verma); the Secretary of Finance (Mr. Montek Singh Ahluwalia); the Secretary of Industry (Mr. Surendra Singh); and the Secretary of Commerce (Mr. Tejendra Khanna). Depending on the content of the investment proposal, other secretaries (from the Ministry of Power, for example) will be invited to join the FIPB meeting. The Prime Minister's Office (PMO) staffs the FIPB and is responsible for organizing and summarizing proposals for the meetings of the FIPB. Mr. Dinkar Khullar of the PMO now acts as Secretary to the FIPB. FIPB Meetings. The FIPB is scheduled to meet weekly on Saturday mornings to review investment proposals. The members of FIPB review the summaries of proposals and then make a recommendation on approval to the Foreign Investment Committee of the Council of Ministers. This committee, which includes both the Prime Minister and Finance Minister Dr. Manmohan Singh, is also referred to as the "Empowered Committee" and may give final approval to proposals, deny approval, postpone action, or refer a proposal back to the FIPB or a concerned Ministry of government. Meetings are not public and only approvals are announced. Results to April 1994. According to the India business and investment report of May 1994, in the 34 months from July 1991 through April 1994, the FIPB received a total of 1,222 foreign investment proposals. Of these, 900 were approved, 65 were denied, and 257 have been withdrawn or referred. Table 7. India. Foreign investment proposals, 1991-94, by action Approved 900 74 Withdrawn/referred 257 21 Denied 65 5 Total 1,222 cases 100 percent Source: May 1994 India Business and Investment Report. Time required for application and approval. If the U.S. investor has written a proposal well, provided details, and the FIPB is fully satisfied that the investment meets India's industrial development goals, approval can be granted in as little as three weeks. Proposals that are badly formulated, do not meet goals, and invite objections on political, environmental or public health or welfare grounds are likely to be denied. FIPB Precedents. On the basis of approvals to date, we believe a U.S. investor is more likely to receive approval for a proposal which: 1) is well written; 2) includes transfer of technology or new skills to india; 3) helps to increase exports from india; 4) shares future profits with an Indian equity partner (particularly in cases of consumer goods investment proposals). Often, a key element in the success and rapid approval of a proposal has been the quality of the preliminary work. A U.S. investor or a professional process manager (lawyer, consultant, Indian business partner, etc.) may seek the advice of relevant Indian government officials. In such meetings, a U.S. investor may answer questions and resolve uncertainties before making a formal proposal to the fipb. The U.S. Embassy seeks to promote U.S. investments which enhance the export of U.S.-origin goods and services to India. Embassy officers in the Economic and Commercial Sections can provide client-confidential advice and counsel to interested U.S. firms. For more information, please contact the U.S. Embassy or one of the U.S. domestic offices of the U.S. and Foreign Commercial Service (listed in the government pages of your telephone directory). Steps to establishing an office Any investment from a U.S. firm into India requires the prior approval of the Government of India. Investments in high-priority industries or for trading companies primarily engaged in exporting are given almost automatic approval by the RBI. U.S. firms may also seek approval from the Foreign Investment Promotion Board or from the Secretariat for Industrial Approvals in India's Ministry of Industries, New Delhi. This checklist outlines the steps we recommend a U.S. firm follow in opening an office in India: 1. Assess your commercial opportunity; 2. Plan your business, obtain legal, financial, official, environmental, and tax advice as needed; 3. Choose to go it alone or select a partner; 4. Choose legal structure; 5. Choose capital structure; 6. Select a location; 7. Obtain personnel; 8. Develop a product marketing strategy; 9. Comply with all laws on registration, approvals, and taxation. Selling factors, techniques One consequence of the high protective tariffs India enacted was that all too often Indian firms produced high-cost, low-quality goods. Indian consumers, lacking any other choice, were compelled to buy these products. As import duties have dropped -- though they are still high by world standards -- Indian consumers have gained some freedom of choice about what products to buy. Since returning to India in late 1993, the Coca-Cola Company has upgraded local bottling plants and advertised heavily. Pepsi has matched this marketing effort with a variety of competing techniques. The "cola wars" are the subject of press stories and marketing analysis reports. Consumers are finding that competition brings some attractive benefits as prices are lowered and bottle sizes increase. The basic requirements of an Indian customer are quality, price, delivery, and after-sales service. In making preparations for selling in India, a U.S. firm may wish to consider some or all of the following questions? What are Indian customer requirements for our type of products? Will we need to adapt sizes, voltages, weight, design, etc. for the Indian market? Who is the final customer for our product in India? Consumer, industry, government, etc. What quantities of this product can be sold in the first year? How much can sales grow in India? Do our customers have priority requirements for our type of product? How are they meeting their current needs or is this a new demand? Of three variables (price, quality, performance) which one is key to the sale? Does the customer already have a specific budget or authorization for expenditure? What amount? What is the deadline for spending this budget? What is the competitive situation? Who are competitors for this type of product? Are competitors engaging their Embassies or High Commissions in support of their sales efforts? Have the names of competitors been featured in press reports or advertising? How much information on the competitor's offer (price, terms, delivery) is available? Can more competitor intelligence be obtained? How? If the customer is a public enterprise or part of the Government of India, what is required in terms of transfer of technology, offsetting purchases (direct or indirect), vendor qualification and training, countertrade, export obligation, or financing terms? If the customer is an organization or combination, what does the decision-making process look like? What are the critical decision points and who will make them? Can you identify the name of the individual who will: -- define the requirement for this product or service; -- approve the requirement; -- set a time limit on the process; -- justify and make a presentation of the budget; -- set the schedule for the project; -- approve the budget; -- approve tech transfer arrangements; -- approve offsets or export obligations; -- negotiate the final contract; -- approve the final contract; -- appoint business partners for offset sales; -- influence the decision-making process; -- slow or accelerate the timing of final approval; -- test prototype or conduct demonstration; -- evaluate technical merits; -- evaluate commercial factors; -- pay for demonstration or prototype? What other issues (exchange controls, political relations, official aid donation, etc.) may affect the selection of product? What is your own assessment of the chances your firm can make the sale? To win the contract, what level of effort, measured in visits, meetings, document preparation, technical drawings, project proposals, is required? Is the risk/reward ratio favorable? What business alliances might be formed to increase the chances of our firm's success in this project or contract? Do previous bidders seek U.S. partners to strengthen their competitive position for this procurement? In this market, who are our friends, who are our detractors, and how do we handle them? What can we do to strengthen our friends, neutralize our detractors? How can we expand our circle of friends and advocates? In dealing with Indians, are we aware of cultural sensitivities and courtesies that will enhance our efforts to communicate and persuade? Do we pay attention to such things as the time difference, local holidays, dietary preferences, respect for elders, privacy of families, social and professional role of women, entertaining and hospitality expectations by hosts and guests, etc.? As a case study, the recent experience of General Electric Corporation and the Godrej Group is described. India's reforms and its growing middle class provide commercial opportunities to U.S. firms producing consumer goods. India's remaining restrictions on direct imports of consumer goods require U.S. firms to consider alternate entry strategies. One case study of consumer durables suggests mutually profitable alliances can be made with private Indian firms. A case study in consumer durables. In February 1993, the privately-held Indian company Godrej & Boyce Pvt. Ltd. Joined hands with GE Appliances, one of the core businesses of the General Electric Corporation (GE). The venture agreed to develop, manufacture and market selected household appliances in India. The early positive results of the venture offer several lessons for other U.S. firms. As of June 1994, this appears to be a successful strategy to address the demand for home appliances in the Indian market. Demand among middle class households. Refrigerators were formerly luxury items but the growth of India's middle class can be measured by expanding sales. In 1986, less than 800,000 refrigerators were sold in a nation with a population of 850 million. Sales in 1990 had grown to well over 1 million machines. Having been in the refrigerator business for more than three decades, godrej had already developed a strong brand image among Indian households able to buy such appliances. The success of its "Puf" range of refrigerators strengthened its position further as households added this consumer durable good. Around the time of the 1993 joint venture with GE, Godrej was earning about usd 76 million on its refrigerators, net of excise taxes. Although its sales were good, Godrej senior managers realized that the appliance business would face stiff future competition. India's 1992 reform program opened India to global manufacturing and consumption trends. Refrigerator manufacturing and marketing was a specialized business that was driven primarily by local markets. At the time Godrej was scouting for a foreign tie-up, GE Appliances was seeking an entry into India. They found each other and the joint venture was formed. Godrej took 60 percent of the equity, and GE Appliances, 40 percent. As of 1993, GE was among the top three in appliances worldwide and was without an Indian partner. Whirlpool had tied up with the TVS Group and Electrolux with Kelvinator. For GE, the joint venture represented an essential market entry strategy. Richard Stonesifer, President and CEO, GE Appliances U.S.A., is quoted saying "we are very aggressively expanding our business around the world through partnerships. India was a very important part of GE's global strategy." In just over a year since its inception, Godrej-Ge has achieved a (unaudited) sales of USD 109 million net of excise. It has become the first company in India to cross the 600,000 units mark, having manufactured and dispatched 616,000 refrigerators in the last twelve months. It has also made a foray into the washing machines market, with the launch of its powerwash range early this year. The Godrej-GE joint venture has enabled Godrej, already a strong market force, to expand its product range. Godrej-GE now offers refrigerators for every consumer segment - from its tiny, low cost model with 100 liter capacity to its high-end model with a 3-door, 390 liter capacity. This complete line has increased the brand's presence in the market. Godrej-GE has also taken the lead in the replacement segment, offering incentives to trade-up. Development of consumer finance and time purchase arrangements have increased growth in this market, too. Godrej-GE's entry into India's USD 85 million, 400,000 units washing machine market uses a well thought-out strategy. GE sought to leverage Godrej's trusted "Puf" brand by extending it to washing machines. Powerwash, an attractive, top-loading machine with high acceptability was launched. The powerwash is the only machine that comes with a mini-wash basket for smaller, delicate clothes. The machines, with built-in castors for easy movement, come in three models, priced from USD 220 to 440. Godrej-GE did not built a new plant to manufacture consumer appliances. Instead, borrowing from GE appliance experience, the joint venture chose out- sourcing. For the manufacture of its washing machines, the company brought in Videocon Pvt. Ltd., India's number one washing machine maker, with a 60 percent share, and also the smaller, Delhi-based Maharaja International. Purchases from these companies are branded under the Godrej name and marketed through its 4,000-plus retail outlet dealer network. By 1994 year- end, Powerwash aims to be a strong number two, with a 15 percent market share. Over the next few years, Godrej-GE plans to introduce other domestic appliances such as microwave ovens, cooking ranges, dishwashers and room air conditioners. Although each of these products will be designed and marketed by Godrej-GE, the products would be sourced from outside original equipment suppliers, like the arrangements it currently has for its washing machines. The outsourcing option adopted by Godrej-GE is a new innovation in the Indian context. The main reason Godrej-GE may have adopted this practice is to save time in establishing its larger presence in the market. According to the local press, the company has plans to launch more of GE's international products two years down the line. While GE is number one for room air conditioners, the firm has not manufactured a single unit in the last five years. Combining marketing skills with existing production capacity is the key to success. GE is in India to build markets, not factories. Godrej-GE believes that demand will justify adding its own capacity in India. According to the business news, by 1996, Godrej-GE will set up two plants, one to manufacture washing machines in Maharashtra State, which has the highest demand, and the other for refrigerators, in Punjab state. The company already has two refrigerator plants near its Bombay office. The Punjab plant, with an installed capacity of 500,000 units a month, will cater to the growing demand for the Godrej brand, specially with the growth in the replacement market and may be the source of future exports to regional markets. Godrej-GE is using a double strategy to win market share. To challenge its competition, the company is concentrating on shorter introduction times for new products. Besides this short-cycle marketing push, Godrej-GE also plans to attract new consumers through its programs to make machines more affordable. With countrywide consumer financial services, a joint venture between GE capital and the Indian housing development finance corporation, Godrej-GE dealers can arrange consumer financing and monthly payments for new refrigerators and washing machines. Although the joint venture has not yet launched a full range of GE appliance products in India, we view the initial year's experience as positive. Godrej has benefited from GE's technology and knowhow in basic refrigeration technologies. These, along with process knowhow, have already been passed on to Godrej. GE has also helped with product innovations, planning and productivity. For GE, the venture has provided GE appliances an entry into a market with high import tariffs on finished consumer goods. India's growing middle class will continue to be a very important part of GE's global strategy. The combination of a major Indian firm with a global giant, along with the careful alignment of their shared philosophies and approach has produced a powerful force for the expansion of U.S. sales in this market. In time, Godrej-GE aims to be the number one player in the home appliances market. If they can sustain their skillful and well-supported initial strategies over the long run, they may achieve this goal. Advertising and trade promotion Advertising and trade promotion activities are well- developed in India. Most major U.S. advertising firms have chosen local Indian partners for their work in this market. Bombay remains the center of the advertising business in India. Pricing product Indian consumers are very sensitive to price considerations. Many consumer product suppliers have found it helpful to package smaller portions at reduced prices rather than "economy" sizes. Sales service and customer support Businesses insist on the highest standards of maintenance services and prompt response to problems. Engineering support for manufacturing technologies, medical equipment, state-of-the-art products and processes are required for successful sales to private firms or to the Government of India or one of its public enterprises. Selling to the Government The Government of India regularly advertises its requirements for the purchase of supplies and new equipment. These foreign government tenders are reported to the U.S. Department of Commerce, which publishes them on the Economic Bulletin Board and then in the National Trade Data Bank. For more information about these information services, including subscription prices, please call the U.S. Department of Commerce (202) 482-2000. Protecting your product from loss of patent, copyright, or trademark protection Present Indian law prohibits product patents for any invention intended for use or usable as a food, medicine, or drug. The Indian Patents Act (1970) also forbids product patents for substances prepared through or produced by chemical processes. While the process used to produce such a food, medicine, drug, or chemical product can receive a patent under Indian law, the product itself cannot. The life of a process patent is five years from the issuance of the patent or seven years from the date of filing a patent application, whichever is shorter. India grants patents to products which are not chemicals or drugs. The life of a product patent on such inventions is 14 years from the date of filing. U.S. chemical and pharmaceutical firms have lost many millions of dollars in revenues to Indian pirates. These firms employ talented scientists and technicians who reverse-engineer foreign products which lack product patent protection. These firms then sell them in India and other markets lacking adequate protection for intellectual property rights. In response to complaints, the U.S. Trade Representative (USTR) initiated an investigation of India's intellectual property practices in May 1991. The "Special 301" section of the U.S. Trade Act of 1988 authorized this action. In April 1992, USTR concluded that India failed to provide adequate patent protection to U.S. commerce. As a result, the U.S. withdrew benefits granted to Indian-origin drugs and chemicals under the Generalized System of Preferences (GSP). As of June 1994, India remains a priority foreign country under the "Special 301" section of U.S. trade law. India's decision to sign the final act of the GATT (General Agreement on Tariffs and Trade) Uruguay Round on April 15, 1994, in Marrakesh, Morocco, obligates the Government to enact a comprehensive system of product patents by 2005. Current Indian law protects copyrights. India is a member of the Universal Copyright Convention and the Berne Convention. In May 1994, Parliament approved amendments to the existing copyright law (Copyright Act, 1957) which enlarged the scope of protection and introduced stiff mandatory penalties for misuse of copyrighted material. Trademark protection in India is also considered good. A U.S. firm may register a trademark in accordance with the Trade and Merchandise Marks Act (1958). An application is advertised and objections are received and adjudicated. A license/royalty agreement between a U.S. trademark owner and an Indian licensee is subject to prior approval by the RBI. Amendments to the existing law have been introduced and may be enacted by 1995. Police are being trained in enforcement and courts have acted to expand the rights of owners of copyrights and trademarks in recent decisions. Need for legal services Like the U.S., India has adapted a legacy of British common law and precedent to its national circumstances. Most major U.S. international law firms have existing correspondent or informal relationships with leading solicitors and advocates in India. As of June 1994, one U.S. law firm has opened a representative office in New Delhi and at least one other firm has requested approval for opening its office here. The U.S. Embassy may not recommend any individual or firm to supply legal services. We do maintain a list of such firms who are used by the local offices of U.S. corporations. This list is available on request. Need for accounting and tax advisory services All of the major U.S. accounting firms have offices in India. The U.S. Embassy may not recommend any individual or firm to supply accounting or tax advisory services. We do maintain a list of such firms who are used by the local offices of U.S. corporations. This list is available on request. Need for business consulting and market research services Following the 1991 reforms, many U.S. firms have decided to gather information about commercial opportunities in India. Over the past year, the demand for market research has increased and prices have risen. The U.S. Embassy offers an introductory market research service designed to answer nine basic questions. The "Comparative Sales Survey" is priced at USD 1,000 as of June 1994 and is available on request and payment. The U.S. Embassy may not recommend any individual or firm to supply market research or competitor intelligence information. We do maintain a list of such firms which we have used in the past with good results, or which have been used by the local offices of U.S. corporations. This list is available on request.