Doing Business in India - A Cultural Guide

Being Aware of Cultural Diversity

For foreign business people, doing business in India for the first time can be a bewildering and sometimes difficult experience. The culture is different, customs are different and the ability to adapt to these differences can very often mean the difference between success and failure in your efforts to do business in India. 

On the surface there are many similarities, such as the use of English as the main medium of business communication and the tendency of Indian business people to wear western dress. But it is important not to fall into the trap of assuming that things are exactly the same as at home. This is often referred to as projected similarity but there are innumerable twists and nuances to Indian business culture. These nuances very often stem from the rich and varied cultural and religious norms that pervade almost all of Indian society. 

As you begin to research Indian business you will find that most businesses fall into two categories, the first is the traditional family business and secondly the more modern technological businesses that are used to dealing with foreigners and which are primarily located in the larger cities. Adjusting to the Indian business culture is vital to operating successfully because it impacts on almost all areas of business life, from scheduling and organising meetings to eventually closing the deal and following up with delivery, production etc. From the outset, it is very important to realise that India is not one homogenous culture but rather a conglomeration of many diverse communities with different customs, beliefs, languages and cultural norms. In this way it can be likened more to the different countries which make up the European Union than it can to the United States of America.

 

Taking Time to Build up Relationships

To increase your chances of being successful in doing business in India, the single most important piece of advice is to take the time to build up relationships with your Indian counterparts. Of course, having a good working relationship is important wherever you are but it is of even more significance in India and you will find that Indians will factor trust, intuition and whether they like you or not, into their business decisions just as much as they will factor in your presentations, business data and statistics. 

So, you will need to take time to get to know your prospective partner. Taking the time to engage in small talk and getting to know details about their family and community is very important. Rushing straight into talking about business without the preliminary niceties can often be perceived as rudeness. You will also need to be ready to answer questions which we would not normally ask at the first business meeting in Europe or the USA, such as, “Are you married?”, or “How many children do you have?” (and possibly “if not why not”). In India when people ask questions like this, they are just showing an interest in you and your family and it is generally not considered rude in any way. An observer of an interaction between Indian and American business people once noted, – “the westerners were thinking quick contracts and short-term success whereas the Indians were thinking relationship, trust and long term business”

 

Understanding the Hierarchical Nature of Indian business

Indian businesses are quite hierarchical in nature and decisions are usually made at a higher level than people in the West might be used to. So if a senior person from the Indian side is not at the business meeting, you can take it as a good indication that they are not ready to make a decision or a commitment quite yet. In hierarchical cultures such as India, status and position are given high importance and business owners and managers in India tend to be more autocratic than their western counterparts and often will not consult their more junior staff with regard to business decisions.  This is particularly the case in family businesses where the family elders, parents and grandparents are in charge and the business hierarchy is run along the same lines as the family hierarchy. This tends to be less the case in larger companies and multinationals which are operating to International standards but even in these cases, status, seniority and position are very important to people.  Many senior people will expect to be treated with a certain amount of deference, particularly if you hold a less senior position in your own company. 

At business meetings, junior members of staff may often defer to the more senior person and might be reluctant to speak or contribute even if they are the person best equipped to do so. One way to deal with this might be to ask them direct questions only after mentioning to their superior that you are going to do this.

 

The Time Factor.

We have all heard of the concept of Indian Stretchable Time and to a certain extent it is valid. You have to be prepared for the fact that meetings may not begin or end at the scheduled time and that there may be interruptions during the meeting to deal with other business issues, particularly if you are dealing with a senior member of the Indian side. Indian time awareness is not quite as strict or acute as it is in many Western countries. Being 15 to 30 minutes late for a meeting is not considered such a big deal as it would be in other places. 

You will also need to realise that things will very often take longer than initially promised and expected. There is a tendency in India to initially say that things will happen quickly but it is probably safe to assume that something which is expected in a week, is very likely to take one month to happen. The Business Day in India also tends to begin and end a little later. Business in the morning generally begins as 10:00 a.m. to 10:30 a.m. and it would not be unusual for meetings to be scheduled late into the evening. The need for adaptability is also required in dealing with Indian business culture because meetings often get rescheduled or even cancelled at the last minute. 

 

Importance of Food in Indian Business Culture

Another important part of Indian business culture is food, with many business meetings being held over breakfast, lunch or dinner or drinks. Indians like to be a good host and will very often invite you for a meal either in a hotel, restaurant, or in their own home. If the meal is in the person’s own home it can generally be assumed that things are going well and usually the purpose of this type of meal is more about strengthening and developing relationships with the family and less about having actual business discussions. In the home, many people eat with their hands rather than cutlery, but as a guest you will almost always be offered cutlery, though this will generally be a spoon and fork rather than the knife and fork which people in the West are used to. This is because Indian food is generally chopped small before cooking and does not require a knife at the table. It is also important to note that whether you are eating with your fingers or a fork you should always eat with your right hand. In India it is considered unclean to eat with the left hand which is used for personal cleanliness and therefore not for eating with. 

Many people in India are vegetarian and if you are organising or hosting a business lunch it is important to ask if there are vegetarians present and make sure there is an adequate choice of food available for them.  Dishes which include meat are generally referred to as “non-veg” in Indian parlance. There are various levels of vegetarianism in India and if you are at a meal where some people are very strict vegetarians it would be considered courteous to ask them if they mind if you eat meat at the meal.

 

Formality of Indian Business Attire

At the first meeting many Indian business people might wear more formal attire such as suit and tie.  but because of the climate, business attire is usually more casual. For men it is generally, formal trousers and open-neck long or short sleeve shirts. For Indian women it is often a sari or salwar suit in a more traditional setting or a business suit consisting of a plain colour blouse with either skirt or trousers in a more modern business setting.

 

 

 

Clarity and Directness of Communication.

While English is very widely spoken and is in effect the lingua franca of most written business communication in India, it is important to bear in mind that it will not be the mother tongue of most of the people you will encounter, even in a business setting. Most internal verbal communication within an Indian business will take place in Hindi or one of the large number of regional languages which are spoken throughout this vast country. Because of this, it is extremely important to be clear and direct when communicating with an Indian company whether it is in written communication such as business documents, emails or letters or whether it is verbal communication, in person, over the phone or in an online meeting. 

It is also important to listen very clearly to what the other person is saying. In Indian culture there is an inherent dislike for saying “No” directly, because of of the fear of offending the other person so it is important to be very careful when you hear words like “I will try my best” or “I hope this will be possible”, when you ask people to commit to a certain business timeline, because in most circumstances these phrases will actually mean “No”. If you are regarded as being a more senior person, people may often say “yes” to you also, even if they have not fully understood your question. You should take the time to see if you are asking the right questions to make sure that the answer cannot be ambiguous. The best way to get around this is to be absolutely clear in your questions so that you are forcing a real “Yes” or “No” answer that will not be open to later mis-interpretation.. One should always try to do this in a way that does not imply mistrust in the other person. It should be framed as an attempt to get as much absolute clarity as possible. Not making a business associate lose face is an important element of Indian business culture. 

 

Always Negotiate when doing business in India.

In the markets and Bazaar where 95% of Indians do their shopping, negotiating price or bargaining is an accepted norm. The same is true in Indian Business and a person who does not negotiate will often be regarded as naive and a pushover and will not be regarded as a particularly competent business person. Don’t forget that bargaining is expected and it is generally built into the first price or figure that is suggested. It is also important to understand just how Indians negotiate. This can often involve highlighting the relationship that has been built up, using stalling tactics if they perceive the other party is in a hurry to conclude the deal, or just using silence to try to encourage the other person to show their hand. Cultural Awareness training can help you to understand this better.

 

How to Address People and the Use of Names.

Indian business culture can be a little more formal than many other countries and how we address people is a good example of this. It is important to address people by their last name at least in the initial stages of the relationship. If people have titles such as Doctor or Professor then it is considered good practice to use these titles when addressing the person or when speaking about them. Generally using Mr or Ms or Mrs is the correct thing to do.  You only move on to using their first name after some period of time and only then when a good relationship has been built up and one is actually invited to use their first name. This is considered traditional best practice but in effect times are changing in India as elsewhere and the use of first names is becoming somewhat more acceptable, when dealing with someone of a similar age.  It is still, however, not the norm if one is speaking to somebody who is older or more senior than yourself. So basically, it is usually best to err on the side of being more formal until a certain level of comfort is shown by your Indian counterpart.

 

Tailoring your Proposition Specifically for the Indian market. 

With a population of 1.4 billion people the Indian market is huge and possibilities are almost endless for businesses that manage to successfully break into and conquer this market. But for a company to be successful in the Indian Marketplace it is a different proposition than many of them are used to, because Indian business practices and customer preferences are quite unique. 

If a Company just takes the product or service which they are offering in their home market and transplants it directly into the Indian Marketplace then the chances of success are very slim. What you are offering for the Indian Marketplace needs to be tailored specifically for that market.  This requires extra work and effort obviously, but for those companies who manage to do this successfully then the rewards can be outstanding. 

One example of this would be car manufacturers. In many other countries cars are driven by their owners, so driver and front passenger comfort is one of the most important aspects of the design. But in India very many people have drivers. This is particularly so in the large car market and so comfort and space for the back-seat passenger is of much more importance. So it is worthwhile for car manufacturers to develop special interiors for the Indian market with emphasis on back seat passenger comfort, amenities and services. 

Another example would be the food industry. Most of the foreign food brands which have been successful in India have developed special flavours for the Indian market. This is because Indians are used to eating more spicy food and snacks and would regard some of the traditional flavours of western food and snacks as being too bland for their taste. 

Indian consumers are also very price and value conscious and so foreign companies which would like to supply into the Indian market need to be very careful about the price point at which they pitch their products.  The typical Indian Consumer does not have the ability to pay the same amount as European or American customers would for a similar product. If a company can supply their product into the Indian market at the appropriate price point, then the market of 1.4 billion people opens up for them and economies of scale obviously come into play. 

 

Business Cards.

Business cards are very commonly distributed in India and they are almost always in English. Business cards are always taken and received with the right hand. There is no need for the formality of bowing or the double handed presentation of business cards which is found in some other Asian countries. Business cards are simply a tool and there is no other particular cultural significance attached to them. 

 

Gifts

It is quite common to bring sweets, flowers or some other such small gifts to give to your host as a gift if you are invited to their home. Some gift from your home country would be particularly appreciated.  If you are aware that your host drinks alcohol then a good bottle of foreign whisky would generally be very well received. In India the word “wine” is often used as a generic term for all kinds of alcohol and liquor shops are generally referred to as “wine shops”. However, actual wine is not a very common drink in India although this is beginning to change nowadays. 

 

 

 

Anticipating Bureaucratic Difficulties.

Over the last decade or so, India has improved its position on the World Ease of Doing Business list. However, you should still anticipate bureaucratic difficulties and barriers in breaking into the Indian market. There will most likely be much more paperwork than you are used to in your home country.  There will be more permits and licences to acquire and processing times might be longer than you expect. Many of these things are going online in recent years but the process can still be more tedious and time consuming than it is in other countries. It is usually a good idea to have somebody familiar with the system, on board with you, to help you with all of this bureaucratic and administrative work. 

 

Be Aware of Religious Holidays.

In comparison to other countries India has a huge range of religious and cultural holidays. This is mainly because of the various different communities co-existing in India and many of the Hindu, Muslim, Christian, Buddhist and Sikh holidays are all celebrated as national holidays.  There are also so many regional holidays which different states around the country observe.  So, if you are planning a business trip to India you should look up, not only the national holiday list but also the holiday list for whichever state within the country you are planning on visiting.  Also be aware that some holidays which are listed for one or two days can go on for much longer because people in the cities return to their native towns or villages for some of these holidays and take time to return to their place of work. So, check all of this out before you plan your business trip.  You can check it online but better still ask a local person who will be able to give you the most complete information. After all, nothing beats local knowledge.

 

Expect a Lot of Travel 

India has more than 40 cities which have a population of more than 1 million people so there are a huge number of places where it is possible for you to do business and entering such a large market obviously will necessitate doing quite a piece of travelling.  Business travel between the major cities is generally done by flight and the domestic air network is extensive and relatively cost-effective. 

However, travelling outside the cities will obviously mean travelling by road or train.  The railway network in India is one of the most extensive in the world but it would be relatively unusual to see a foreign business person travelling by train. Travelling out from the cities would generally be done by hired car and driver or in a vehicle provided by your Indian business partner.  A journey of five to six hours would not be considered unusual or particularly long in India, but be aware that the traffic can be rather hectic and your road trip might not be quite the serene experience that you had hoped for. 

 

 

Talk to us

Finbarr Buckley, of Dunbarry Consultancy and Training has more than twenty years experience doing business in India and Europe. He is a business consultant and cross-cultural trainer. If you are interested in doing business in India and need help navigating this unique business culture you can contact Finbarr at finbarr@dunbarry.com  or WhatsApp +91 88372 48861.