What challenges do foreign companies face in entering the Indian market?

What challenges do foreign companies face in entering the Indian market? Some companies, just because of their name, appear alien to Indian consumers. If the company is involved in a category where consumers look for global signs of social status, then that foreignness can be played to advantage. But for categories like packaged food, it often doesn't sit well with consumers. So you see a company like Pillsbury making very clear efforts in their advertising to show that their foods fit into traditional Indian family structures. The other common challenge comes from offering new types of products. Commodities that we take for granted in the West might not be completely new, but they don't have the same kind of penetration in India. Take shampoo or toothpaste and you will find that the market penetration of these products is actually quite low when compared to Western countries. For example, the penetration of toothpaste in India is only around 50%, while for shampoo it is around 30%. So companies new to India face competition from alternatives that are very different from what they encounter in the West. For example, in the toothpaste category, Colgate isn't competing only against Procter and Gamble's products and brands. It is also trying to create a market by convincing people to upgrade from tooth powders and natural ways of cleaning their teeth, to toothpaste. The vertical stretch of many product categories is simply different, and it's one of the main challenges for foreign companies in India. A great deal of that stretch comes from the huge population and the large disparities in income that you find in India compared to a more homogeneous middle class in the U.S. or Europe.