India, the land of opportunity
Wednesday, May 14th, 2008India, Land of Opportunity
DJ Halcro
In such a richly diverse and complex country as India it is difficult to impart generic conclusions that can be used by those doing business there. Regionalism, religion, language and caste are all factors that need to be taken into account when doing business in India.
Most people from the west doing business in India will do so in cities such as Delhi, Mumbai, Bangalore and Hyderabad and with a particular socio-economic class. This short guide to doing business in India will explore a few cultural facts and their influence on business culture.
India - with its consistent growth performance and highly skilled workforce provides enormous opportunities for business opportunity and investment. India is the largest democracy and tenth largest economy in the world. India is the fourth largest economy in the world in terms of purchasing power parity.
Cultures define our fundamental beliefs about how the world works and forms ways in which we interact and communicate with each other, develop and maintain relationships. Doing business with another culture requires a focus on a multi-dimensional understanding of its culture and business practices. Understanding those differences and adapting to them is the key to success.
In the United States, efficiency, adhering to deadlines and a host of other similar habits are considered normal and are expected. In India one needs to understand that one is dealing with people from a different cultural background that think and interact differently. What is considered to be reasonable and feasible in the west may not work so in India
Aggressiveness can often be interpreted as a sign of disrespect. This may lead to a complete lack of communication and motivation on the part of the Indians. One needs to take the time to get to know them as individuals in order to develop professional trust. Indians are very good hosts and will therefore, invite you to their homes and indulge in personal talk often. All this is very much a part of business.
When negotiating for business you should avoid high pressure practices. Do not be confrontational or forceful. Criticisms and disagreements should be expressed only with the most diplomatic language. Indian society has an aversion to saying “no” as it is considered rude due to the possibility of causing disappointment or offense. Listen carefully to Indians’ responses to your questions. If terms such as “We’ll see”, “I will try” or “possibly” are employed then the chances are that they are saying ‘no’.
One is expected to accept the invitation gracefully. Taking a box of sweets, chocolates or a simple bouquet of flowers would definitely be a welcome gesture. Indians respect people who value their family. They will allow family to take priority over work, whenever necessary.
Most traditional Indians abstain from alcohol and are vegetarians; their eating habits need to be respected. Westernized Indians are more outgoing and do socialize and drink alcohol.
In a group discussion and meetings, the senior most people are looked upon to lead the discussion, but that does not mean that the others agree with them. People may maintain silence, without contradicting out of respect for seniority.
Women are treated with respect in the work place. They feel quite safe and secure in most organizations in India. Foreign women working here will find it easy to adapt to an Indian work environment. However, they need to plan their wardrobe carefully, keeping in mind the conservative dress codes in India.
When doing business in India, meeting etiquette requires a handshake. However, Indians themselves use the namaste. This is where the palms are brought together at chest level with a slight bow of the head. Using the namaste is a sign of your understanding of Indian etiquette.
Names speak volumes about an Indian’s background. For example, a Singh will always be a Sikh. The suffix “-jee” (as in Banerjee) is a sign of a high caste. “Kar” (as in Chandraskar) denotes that person is of Maharashtan high caste. Arabic sounding names will be used by Muslims.
When addressing an Indian whom you know personally, always use the appropriate formal title, whether Professor, Doctor, Mr, Mrs. or if you do not know their names then Sir or Madam will suffice.
When doing business in India, business cards should be exchanged at the first meeting. It is a good idea to have it translated on one side into Hindi, more as a sign of respect as opposed to linguistic necessity. Be sure to receive and give with your right hand. Make sure the card is put away respectfully and not simply pushed into a trouser pocket
India has the most liberal and transparent policies on foreign direct investment (FDI) among major economies of the world.
100% FDI is allowed under the automatic route in all sectors/activities except in few areas, which require prior approval of the Government.
Under automatic route, investors are required to only notify the Reserve Bank of India within 30 days of receipt of inward remittances.
Indian economy has been growing at an average growth rate of about 8.6% annually over the last three years; the growth rate in 2006-07 was 9.4% and the growth rate in the first quarter of 2007-08 was just under 10%
• Imports in 2006-07 grew by 21.59% and exports by 20.9%.
• Manufacturing sector grew by 12% and services by 11%.
• India has a large middle class and 55% of its population is below the age of 25.
• High economic growth and rising per capita income has resulted in high growth in the domestic market, which is the prime growth engine for Indian economy.
The Government of India accords high priority to development of infrastructure in highways, ports, railways, airports, power, telecom, etc. Government is actively seeking domestic and foreign private investment, for infrastructure sector development. This is where there is great opportunity for western business to develop relationships.
