Doing Business in India
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 at 130 out of 189 countries in the World Bank's Ease of Doing Business Survey for 2016. It scored particularly well in the areas of protecting minority investors (8th). It also scored fairly well when it comes to getting credit (45th) and getting electricity (70th). India fell short in a number of areas, including dealing with construction permits (183rd), enforcing contracts (178th) and paying taxes (157th).
Economic liberalisation has opened India to foreign direct investment and many Indian states have established Special Economic Zones, successfully attracting investment across various sectors.
Doing business in India: Fast facts
Business hoursThe work week is traditionally from Monday to Saturday, 10am to 7pm, but most Indians don't leave the office until their supervisor does. A five-day work week is becoming more common and hours are often adjusted to accommodate international business partners.
English is the main language of business in India.
Suits are expected at executive level, smart-casual business dress is appropriate for mid-level managers and employees often dress casually. Indian businessmen generally don't wear short-sleeved shirts in the workplace. Pantsuits or skirts are appropriate for women, provided that they are at least knee-length.
Gifts are appropriate but shouldn't be too expensive. Accept gifts with both hands and don't open them in front of the giver. Invitations to a business partner’s home for dinner are common.
Greet business associates by shaking hands. However, never touch someone, pass money or exchange gifts with 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.
Despite having had both a female prime minister and president, women remain underrepresented in the workplace but international businesswomen are generally treated as equals.
Business culture in India
Indians generally make great efforts to accommodate an expat's cultural preferences – but this isn't to say that foreigners won't need to adapt to succeed in Indian business circles.
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.
Indirect communication style
The desire to maintain harmony is a hallmark of communication in India. Locals generally prefer to communicate bad news in an indirect manner, 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 should 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. This is demonstrated in the Hindi language, which has four forms of addressing someone based on their relative status.
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 happens 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.
Expatriates 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 very 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 if unsure) to address Indian counterparts
Do be polite and composed at all times to prove sincere objectives
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 cause offence. 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.
Don't be confused by the Indian head shake. It's generally used to indicate that the listener has heard what has been said – if in doubt about a colleague’s opinion, ask open-ended questions.