First published in July 2015

Doing business in India is “people business” – this applies when dealing with both clients, distributors, and own personnel. Nothing is as important as good business relationships, which are generally very personal affairs in India. Overcoming intercultural differences in India therefore should be central to doing international business in India. For example, Indian managers and directors are usually very interested in the personal affairs of their employees – they often know their families and know about their interests outside of work. On the other hand, those trying to sell their products in India – particularly foreign companies – must establish personal relationships to their customers as well.

Being successful in India requires not only comprehensive understanding of the Indian market but also intercultural skills when dealing with Indian businessmen and customers. This implies that you must have good general knowledge of India, its history, its traditions and diverse culture, as well as the capacity to understand the perceived “idiosyncrasies” of certain forms of communication and the importance of role allocation in business situations – which is the key for successful collaboration in Indian subsidiary companies and also facilitates smooth dealings with Indian customers and partners. Because for tying new business relations as well as for cultivating long term contacts it is crucial to be aware of the most prevalent forms of communication in India.

In addition to having the right professional and technical skills required for the job, foreign companies should choose and develop their non-Indian staff working in or with India according to personal interests, friendly demeanor when dealing with people, as well as empathy and curiosity. Overcoming intercultural differences in India and all foreign markets should be firmly embedded in the company’s efforts in international business

Business in India is “People Business”

Whereas the choice of words usually denotes the intent of what is being said, in India it is wise to take into account the context and body language as well. Moreover, Indians usually express emotions more often – and more openly; and this also applies to the business environment. For instance, in meetings or presentations Indians often underline their arguments with strong gestures and facial expressions.

In general, in India (business) relationships unfold on a very personal level – business and personal affairs are very much intertwined. Being invited home by a partner or client at the beginning of a business relationship or very personal topics in a business conversation are not unusual. Hence, one should be prepared to face intimate questions about family status, interests, and cultural and religious background. Getting to know one another is, therefore, very important in India. And first rounds of discussions or negotiations are usually inconclusive, and consent and definite plans are only finalized after repeated meetings. Furthermore, one should keep in mind that in India critique is normally expressed indirectly, so as not to damage an existing – or potential – business relationship.

 The Legacy of the Caste System

The caste system has been officially disestablished in India – but affiliations to certain castes and classes continue to have a huge influence on the Indian society. According to that, the business environment in India is far more hierarchically structured than, for example, in Europe or North America, and duties are precisely defined. In Indian companies, for instance, the power of decision making is highly centralized and us sually limited to the managing director or rather the executive management. Indian employees, usually, act only within their preassigned task area – never invading the territory of co-workers or supervisors. To this effect, in India directors, more often than not, serve as the sole decider; and especially in family-owned companies, the director sometimes adopts the role of a father figure.

Consequently, assembling a team in India should take these principles into consideration, for clearly defined responsibilities, procedures, and goals will help to setup and operate an efficient organization. At the same time, this facilitates a successful working environment for all employees – because they do not run the risk of invading the competences of their co-workers.

The Seeming Abundance of Time

It is advisable to schedule plenty of extra time for business appointments in India. The infrastructural conditions alone render reliable and exact time management in India nearly impossible. Hence, delays should not be taken as a personal affront – nonetheless, punctuality is generally expected. It is fair to say that on the Indian subcontinent there exists a different perception of time: whereas, Europeans see time as “monochronistic,” linear and objectively measurable, Indians consider time to be “polychronistic” – that is, cyclical and recurrent. This approach affects tempo and rhythm of the Indian workflow, as well as the importance of punctuality.

When carrying out projects in India, foreign companies should consider that a straightforward approach may not always be feasible; discussions and meetings may go in circles, and apparently solved and concluded issues resurface again; and progress in finding a solution may often appear to be rather slow. Hence, tight control periods should be defined – and kept – to ensure timely response to potential problems.

Should you have further questions on how to prepare and conduct your business with or in India – feel free to contact us!