Doing Business in India

By November 18, 2013 General

India Market

With the second largest population in the world and the tenth global economy, India is rapidly becoming a hotspot for international business.  Companies are finding it a profitable place to start up businesses and its population a great clientele for products and services.  Yet, in order to succeed in India, you have to be smart about your approach.  The biggest mistake made by Western companies seeking to do business with Indians is that they believe they can do business just like in the United States.  India is an extremely diverse country with its own cultural idiosyncrasies for business etiquette.  Only by learning these cultural aspects and engaging in cultural sensitivity can you succeed in business ventures there.

One of the most important cultural differences is the Indian hierarchy.  While Americans do talk about such things a class and social status, these concepts are not rigid, unchangeable categories.  In India, however there is a strict social hierarchy based on the traditional caste system.  According to this structure, a person’s place in society is assigned and that person cannot move out of it.  Furthermore, a person’s job is defined by their caste such as manual labor for example.  Anyone outside of the peon caste is not supposed to perform such labor.  Similarly, only members of the upper castes would be able to become executives in companies.  Becoming familiar with this caste system will allow you to understand the hierarchical nature of Indian society and help you make good business decisions.  For example, final authority to conclude business deals is only invested in executives.  If you are at a meeting where no executives are present, you will be able to conclude that you are only in the middle of negotiations and not the end.

Relationships are viewed as more important in business than the transaction itself.  In Indian culture, as with many others, it is preferable to do business with someone already known.  Therefore, if you are going to do business there you will either have to make contact with someone who is well-connected and have that person act as an intermediary or you will have to spend quite a bit of time and effort getting to know your Indian counterparts.  If you choose the former, you will need to do much research and find the appropriate person.  If you choose the latter, you must exercise extreme patience as Indians do like to rush into a business venture.  Much of the initial conversation and negotiation will be an evaluation of your personality and integrity.  It is entirely possible that the first meeting will not include actual conversation about the prospective business venture.  Although this may be frustrating to an American, it is important to show proper decorum at all times.  Any sign of frustration will greatly offend your Indian counterpart and will probably ruin the venture.

Another important cultural difference is in communication.  Since India is a former British colony, English is widely spoken especially in education and business, however there are subtle differences in how it is spoken.  For example, Indians tend to abbreviate things in speech that Americans normally would not, like months of the year.  “February” becomes “Feb” and so on.  You must demonstrate flexibility when speaking with them and not let on that this way of talking seems awkward to you.  In addition, Indians do not like to say “no” to people for fear of offending them.  Therefore, they tend to use vague expressions like “possibly” or “we’ll see” when answering questions.  Please bear in mind that this expression probably means “no.”  Whenever you receive a response like this, it is best to judge from context and body language for the actual meaning.  In this fashion, you will not misunderstand your Indian counterpart and believe that something may go forward when in actuality it will not.

When meeting with your Indian counterparts, it would be advisable to place your hands together as if in prayer and say the word “namaste,”  which is the traditional greeting in Hindi.  This action will signal that you are versed in Indian culture, which will impress your Indian counterparts. Also remember that business cards are important and should be treated with respect.  Do not merely put your counterpart’s card in your pocket.  Have a special case to put it in to show respect.  It may seem like very little but it can make a great difference in the grand scheme of things.

The diverse and complex Indian culture may make one apprehensive about doing business in this part of the world.  However, Indians are a very gracious and welcoming people.  As long you show respect, engage in cultural sensitivity, and maintain a calm demeanor, you will certainly succeed in the dynamic world of Indian business.