5 Dos and Don’ts of Doing Business in India

5 Things to Watch Out for When Doing Business in India

A former chairman of Goldman Sachs Asset Management and British economist Jim O’Neill proposed a thesis in 2001 that the “BRIC” countries could become the four most dominant economies in the world by 2050, based on population and economic trends and development. Two of these “BRIC” countries – Brazil and Russia – have been downgraded a couple places to occupy the 4th and 6th ranks on the list, respectively. But the two remaining “IC” countries are charging forward, breaking past the biggest powerhouse markets in the world and tipping the balance of the global economy from west to east. These two countries are of course China and India.

For all the same reasons businesses are shying away from Beijing, they are strolling on down to Delhi to set up shop: the language barrier is easier to overcome, business practices in India have been influenced by British colonialism, getting a visa is easier in India, government pressure on economic freedom is lighter, opening bank accounts is a less restricted process in India, government ownership of industry is much lower and competition in many industries is therefore more balanced, and the forced disclosure of trade secrets China is infamous for isn’t prevalent in India. China does have benefits in its own right, including more developed infrastructure, a larger middle class with more spending power, and more favorable tax advantages to foreign companies.

Let’s Get Down to Business

Although many broad, anecdotal indicators of doing business in India might make it seem like it’s a commercial paradise, it is important to remember that the country only seriously started implemented liberal economic reforms in the 1990s and still has a long way to go. The World Bank Group issues a ranking and analysis of doing business in countries all over the world, and India ranked 100th out of 190 countries (It’s a long report).

While China beat India out at 78th, it is important to note that India jumped 30 places from the year before, and rose 4.71 points on the 100-point scale used to rank the countries. China, on the other hand, only rose 0.4 points with no change in rank. The United States exported $25.7 billion to India and imported $50.6 billion from India in 2017. China might be more settled in its approach to accommodating foreign businesses and have higher rates of import-export, but India is clearly on an upward trajectory, so there’s no time more suitable to catch this changing wind than now: let’s hop right on in.

Let’s say you have an adventurous business with a model you are positive would succeed over in India. You have the funds, the infrastructure to support an expansion, and the motivation to do business across the ocean. Here’s what you have to look out for when diving into India.

1.      Don’t take English for granted

India hosts a massive number of English speakers – about 125 million people in India speak the Indian dialect of English. This makes things astronomically easier in terms of immediate communication and establishing personal connections more quickly, but don’t be so quick to take this for granted.

The key word here is “dialect”. Back when British colonialists brutally subjected the country to almost two centuries of control, they sought to make English the main language of communication and drive out local languages and dialects – of which there are 455 alive today – and this legacy has lasted until today.

But with any dialect, there are certain phrases, expressions, and words that don’t quite have the same meaning or an entirely different implication altogether. When speaking with Indians in English, be sure to realize that English may not be your counterpart’s native language and, even if it is, you may not understand and communicate the language the same. Be patient, understanding, and thorough if you are unsure about an encounter.

 

 

2.      Don’t be fooled by the Golden Arches

Starting with English being so prevalent, many can be lulled into a sense of familiarity in India: some aspects of doing business and culture seem less foreign than, say, doing business in China. Offices might be structured the same way, businesspeople behave similarly in professional settings, and Westernization has been influencing the region ever since the British Empire invaded several centuries ago. Just reminding yourself of your surroundings and treading more lightly than you would in the United States.

3.      Let’s keep it formal, last names only

Indians have much more rigid ideas of social structure, authority, and hierarchy than many Westerners do. India has one of the oldest systems of social hierarchy in the world, a caste system that is estimated to be more than 3,000 years old, and this long tradition of social classification has made titles and formal introductions central to doing business.

The system places emphasis and social importance on people belonging to different groups, and dictates social mobility and many social interactions throughout society. Being sure to address someone properly, formerly, and respectfully is important, as is being sure to focus attention “upwards” – try not to go into too deep of conversation with junior members without first regarding those at the top.

 

 

4.      Don’t read into a handshake

Americans like to use a handshake as a way to give someone strong, confident, and assertive impression, often gripping each other’s digits like they’re hanging off the edge of a cliff (maybe a little bit hyperbolic, but still). In the United States, these values are translated into human contact and we see a strong connection between a competitive, motivated, and aggressive businessperson and how they hard they can shake your hand.

This is not something present in Indian culture, and encountering a limp handshake while meeting a new associate or potential business contact in no way indicates that this person is of weak business stature.

Additionally, India has a much more personally conservative culture than America, and women and men almost never physically touch in professional settings. While mistakenly reaching out to shake the hand of a female associate won’t be viewed too unfavorably – after all you are a foreigner – it is wisest to wait for your female counterpart to indicate whether you will or won’t be shaking hands.

5.      Let’s be a little more flexible with time

It’s not a secret that many cultures view time, schedules, and punctuality through a different lens than Americans do. While many Western cultures view tardiness as unprofessional and punctuality as crucial to successfully doing business, many other cultures couldn’t care less.

In India, for example, the work day often doesn’t start until 10 am, after a long, hearty breakfast, and might not end until much later than in the evening than what we’re used to. Dinner meetings might enter more into the purview of a midnight snack, since they often won’t kick into swing until 9 pm or later.

In a similar manner, setting goals and achieving targets might take a lot longer than anticipated. Rajiv Khanna, an M&A lawyer for K&L Gates, said, “If you expect something to take a week, it’ll take a month … If the average American businessman wants to do something in one will take four times as long.”

This Seems Like a Lot to Remember…

Expanding internationally is going to be a lot of work and a lot of new experiences, regardless of whether you’re moving into the second most populous country in the world or just up north to Canada. But the good news is that the long-term payoff for getting your business on the ground and running could potentially be huge.

But one big step we didn’t mention in this article yet comes before the actual feet-on-the-ground stage is relevant: localizing your business. Ata Translation Agency offers a wide localization services for languages ranging from Hindi, Bengali, Tamil, Urdu, Malayalam, Nepali, Punjabi, and more.

Fill out our online form, send us an email, or give us a call to get a free quote on any translation, localization, or interpretation project.

About the Author:

Daniel is based out of Chicago and works as a writer, editor, and translator.

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