Legality the major impediment to growth of Tibetan entrepreneurs in India

Tsewang Rigzin

Tsewang Rigzin

By Tsewang Rigzin

EMORY UNIV, US, 29 July 2014

With the help of many individuals and organisations, I was able to conduct a study, “Survey Research on Tibetan Entrepreneurs in India”. This study was the first of its kind, and conducted in association with the Federation of Tibetan Cooperatives in India limited (FTCI). Following is the synopsis of the report.*

More than 70% of Tibetan refugees in India depend on agriculture, handicraft, and other small enterprises as their primary source of income. Tibetans in India began their new life in exile by constructing roads in difficult terrain of Indian Himalaya. Gradually these Tibetans were resettled in various settlements in south India, and agricultural-related activities became their major source of income. Since there was plenty of time left after agricultural activities, a few Tibetan refugees came up with the idea of selling sweaters in various Indian cities and towns during winter season. Eventually this particular business activity spread widely among Exile Tibetans, and it is still practiced by a significant number of exile households. As exile life continues, many Tibetan started small and medium enterprises, both collectively as well as individually. This particular sector is growing.

The overall experiences of Tibetans in exile have been successful, and Tibetans have been widely lauded as the most successful refugee community in the world. However, the high unemployment rate and continued migration of Tibetans from their respective settlements in India to Indian cities and Western countries threatens the stability and sustainability of Tibetan refugee settlements in India.

According to the “Tibetan Demographic Survey 2009” (TDS 2009 CTA), conducted by the Planning Commission of Central Tibetan Administration (CTA), Dharamshala, in the ten years 1998-2009, 9309 Tibetans have moved to Western countries. Some other sources even indicate that each year around 3000 Tibetan move to Western countries. If this trend continues at the current rate, by the end of 2019 the total numbers of Tibetans in India will be reduced from current 94,203 (TDS 2009 CTA) to just 64,203 Tibetans (excluding new arrivals from Tibet) in India. Looking at this ever-increasing movement of Tibetans from their settlements, it seems to me that what we call Tibetan refugee settlement is not really a settlement, but more like a transit camp, and it is very possible that in near future that most of these settlements in India will turn into large old-age homes.

This survey seeks to understand the present state of Tibetan entrepreneurs in India by identifying and analyzing the strengths, positive trends, core competencies, and best practices by Tibetan entrepreneurs. It also seeks to identify and analyze the internal weaknesses and external impediments faced by existing and potential Tibetan entrepreneurs, and bring fact-based recommendation to all those concerned.

The method of sampling used for this study was stratified random sampling. In this the businesses were categorised in 5 different stratums and samples were randomly selected from these. These five different categories were manufacturing, retail outlet, hospitality business, health and wellness business, itinerant trade of sweater selling, and others.

The sample size for this survey is 96. This sample size is determined with +/-10% of margin of error (confidence interval) and confidence level of 95%. The estimate of total population for this study is 70,000, (estimated number of Tibetan in India whose main source of income is from small enterprise, agriculture, and handicraft) which are based on the Tibetan Demographic survey of 2009, conducted by Planning Commission of Central Tibetan Administration. These 96 Tibetan entrepreneurs were randomly selected from the above stratum out of four major Tibetan settlements in India, i.e. Byllakuppe, Mundgod, and Bangalore in Karnataka State, and Delhi. This stratification and different locations for data collection ensured an inclusion of different perspectives of Tibetan entrepreneurs in both urban and rural context, as well as five major types of business that exist among the Tibetan refugee community in India.

The data were collected using multiple modes of data collection including online questionnaires, face-to-face interviews, telephonic interviews, and focus-group interviews. This mixed-mode method of data collection enhanced the quality of collected data by reducing the weakness of each individual mode.

Many interesting findings were made through this study, and I would like to share a few of them with the readers and those who are interested in reading full report, I suggest them to go to the link provided below.*

The interesting finding from the demographic part is the formal educational attainment of respondents. Each year on average of 1,479 Tibetan students graduate from 12th grade (An average number of students graduated from 12th grade from 2011-2014, Department of Education, CTA), out of which more than 80% continue with higher education in various Indian universities. This clearly shows that the overall rate of Tibetans with higher educational degree is relatively high.

However, the formal education level of these randomly selected 96 Tibetan give rise to one very important question: Where are these graduate Tibetans? Definitely not in the private enterprise sector, as only 14% of respondent indicate that they have bachelor or higher degrees. There are only three possible answers for that: a) working in Tibetan or Indian institutions, b) unemployed, or c) have migrated to western countries. The possibility “A” seems not to be a strong justification, as the employment capacity of various Tibetan institutions including CTA is limited, and at the same time to be employed in Indian institutions is very competitive. So therefore it can be concluded that many of these graduate Tibetans are either unemployed or have already moved to western countries.

Another important finding suggested by this study is that there are various barriers that impede the growth of this sector and all the concerned stakeholders should put effort into eliminating these barriers. Among the barriers, one of the biggest challenges for entrepreneurs across the categories is related to government trade rules and regulations or lack of proper registration and licenses. This problem is more prevalent among the enterprises that are operating in settlements. Without these documents and licenses, it is impossible to grow their enterprises, although they have the capacity to do so.

Prior to this study, my assumption was that people do not register their enterprises intentionally to avoid tax and other obligation mandated by these acts, but I realized that I was wrong. Through interactions with around 100 entrepreneurs, I learnt that people do want to register their businesses but are so far not able to obtain these licenses due to various reasons.

One of the primary reasons that I heard from people is that they are not aware of the process, as it involves very long and complicated procedures. It is therefore, highly recommended that the concerned stakeholders, especially CTA, should appoint a special officer under the office of entrepreneur development desk of Ministry of Finance. The primary responsibility of this officer should be supporting the established and potential entrepreneurs in legal matters, such as registration of their enterprises and obtaining licenses for operation of their trade. This officer/s should further train these entrepreneurs on various legal issues pertaining to small and medium enterprises in India.

Training in general is very important for growth of any business. Even more so in the case of Tibetan entrepreneurs, as most of these entrepreneurs have limited technical know-how. As indicated in the findings, there is a positive relationship between training and net profit. The net profit seems to be higher among those who have attended some sort of training.

Access to finance is still a major barrier for established and potential Tibetan entrepreneurs in the growth of their enterprises. Sweater sellers get easy loans from lala and banks, but more than 35% of respondents indicated that their major source of loan and credit is friend and relatives. It is highly recommended that the concerned stakeholders, especially CTA, FTCI, and other regional Nyamdel (cooperatives), should attempt to fill this gap by providing low-interest and collateral-free loans to these entrepreneurs. Given the ground reality of the decrease in agriculture-related activities in settlements, and increase in other business establishments, the regional Nyamdel (cooperatives) and other organisations should make all attempts to expend their present crop- and sweater-selling loans to other business as well.

Intrigued by the entrepreneurs’ decision-making process, I tried to look at how our traditional culture influences the overall decision-making process of the surveyed Tibetan entrepreneurs. About 37% of respondents said that they do Mo divination before making some important business decision-making. Out of these 37% about 70% of them base their decisions solely on the basis of outcome of the Mo divination.

In a nutshell, it is of no doubt that overall performance of Tibetan refugees communities in India and other countries have been very successful under the wise leadership of His Holiness the Dalai Lama and the CTA. However, in the field of entrepreneurship among Tibetans in India, there are many areas upon which there is need of urgent improvement.

One indication of this stagnation is that the itinerant trade of sweater-selling is still the most prevalent trade practice among Tibetan refugees in India. As far as this trade is concerned, it is not a sustainable trade from many different angles. The dependency of their profit on factors such as weather conditions and availability of sites for market are very high. There are growing numbers of progressive entrepreneurs among Tibetan diaspora, and all the concerned stakeholders should facilitate these growing entrepreneurs in whatever manner they can. The stable and cohesive settlement as one of main goal of current administration cannot be achieved without improving this sector.

If this sector improves and performs efficiently, in the short run, it will solve two major problems that we face: Unemployment, and out-migration from settlements. And in the long run, we will be in a better position to safeguard our unique cultural heritage.

About the author

Tsewang Rigzin is a graduate student at Laney Graduate School of Emory University. He can be reached through tsewangrigzin5(at)

Copyright © 2014 Tsewang Rigzin Published in Tibet Sun Posted in Opinions » Tags: , , , ,