Doing Business in India
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Traders had been doing business in India long before the East India Company emerged on the subcontinent in the early 1600s. Today, multinational corporations flock to the country to augment their business processes and IT services and to search for growth in its burgeoning market. Growth has slowed in recent years, but businesses continue to invest and the Indian economy's future remains bright. But, like any emerging market, doing business in India comes with its share of risks and challenges.
India was ranked 63rd out of 190 countries in the World Bank's Ease of Doing Business Survey for 2020. It scored particularly well in the area of protecting minority investors (13th), as well as ease of getting credit (25th) and getting electricity (22nd). However, enforcing contracts, ranked 163rd, and starting a business (136th) prove difficult.
Expats working in India should be aware of how business is carried out in the country and how to behave in the workplace.
The workweek is traditionally from Monday to Friday, 9am to 6pm, but most Indians don't leave the office until their supervisor does. Working hours vary across industries and companies.
English is the main language of business in India.
Suits are expected at an executive level, while a smart-casual business dress is appropriate for mid-level managers. Business dress can be comfortable to suit the weather, such as long-sleeved button-down shirts for men, while women who wear skirts should cover their knees.
Gifts are appropriate but need not be too expensive. Give and accept gifts with the right hand or both hands and don't open them in front of the giver. Invitations to a business associate’s home for dinner are common.
Greet business associates by shaking hands, usually with a light grip. Never use the left hand – it's considered unclean. Men should wait for female associates to initiate a greeting, as Indian men generally don't shake hands with women out of respect. If a female colleague doesn't initiate a greeting, a nod of the head will suffice. A customary greeting between Indians is saying 'Namaste' with palms pressed together, fingers pointed upwards and a slight bow of the head.
Business cards are commonly exchanged in greetings, given with the right hand. Business cards may be printed in English on the one side and Hindi on the other.
Although women have held parliamentary positions as president and prime minister in India, women's political representation and participation have been low. This is true in business settings too, where women remain underrepresented in the Indian workplace. However, international businesswomen are generally treated as equals.
Business culture in India
Business culture in India is diverse, yet there are some key factors to consider, especially regarding communication, networking and building relationships.
In Indian business, trust is more often established through personal relationships than through legal contracts or a company’s reputation. As a result, establishing a strong business relationship without forming a personal one can be difficult. Sharing information about family, speaking about personal hobbies and interests, and spending time outside the office with Indian associates will build the trust needed to sustain the relationship when business negotiations heat up.
The desire to maintain harmony is a hallmark of communication in India. Locals generally prefer to communicate bad news indirectly, especially when communicating with clients and superiors.
Expats unfamiliar with indirect communication often fail to read between the lines which can cause misunderstandings. People in India rarely express a negative response by directly saying "no". Responses like, "yes, but it will be a bit difficult" or "that may be possible – what do you think?" are more common and could be considered the same as a "no".
Asking open-ended questions about the potential problems of a proposal and actively listening for subtle clues can go a long way in avoiding miscommunication.
Most Indian businesses maintain a top-down hierarchy and locals are often very good at negotiating power in business relationships. Status is highly valued in Indian society and people in positions of power are often given greater leeway than the average citizen.
Expats are encouraged to partner with the highest possible level of an organisation and to anticipate delays from both internal and external politics. Expats who can be patient in the face of bureaucracy and respect Indian values will discover that almost nothing is impossible in India.
Adapting versus planning
As is the case in many emerging markets, business objectives in India are often accomplished by adaptation and improvisation rather than by implementing carefully constructed plans. While some expats may prefer to develop contingencies for every foreseeable scenario, locals often place greater emphasis on reacting well to emerging circumstances.
Expats who localise their products and services, as well as their way of doing business, are often more successful than those who try to rigidly implement pre-formed plans. Cross-cultural consultants can be useful in bridging the gap.
Dos and don’ts of business in India
Do show respect to authority figures and use appropriate titles (Mr or Miss and Sir or Madam if unsure) to address Indian counterparts
Do be polite and composed at all times to prove sincere objectives
Do be punctual; being late is seen as disrespectful. Plan ahead for transport and traffic to arrive on time.
Don't be overly aggressive in business negotiations. While Indians are generally tough negotiators, outward displays of aggressiveness will lose their respect.
Don't refuse food or drink offered during business meetings as this may offend. When dining with Indians, it is best to assume that they are vegetarian and that they don't drink or smoke unless they indicate otherwise.