Doing Business in India Explained and How to do Business in India

[4-min read]

Question: Doing Business in India? Here are some quick tips

Answer: (below)

  • Respect the hierarchy and don’t jump “rank” (skipping a layer of hierarchy)
  • Loss of face is real. So, be careful not to single out an individual when working in a team
  • Understand the Indian head nod (see video below)
  • Hearing a “yes” is not always a “yes” so don’t push it. Ask circumventing questions to get the real answer
  • Family is important. Just like relationships. Take your time to develop them. Doing this will be worth your while
  • Understand that not every Indian speaks English, nor do they all work in IT
  • And finally: Read this article…

In this country-specific article, I will cover several topics:

  • How to do business in India, or doing business in India explained
  • Business Culture in India
  • Understanding Indian Culture
  • Working with Indians

What will you learn?

  1. Interpreting the Indian head-nod.
  2. How to do business in India and how to deal with Indians in business.
  3. Why doing business in India involves relationship building.
  4. How India scores on the first primary dimensions of culture.
  5. The essence of doing business with India.
  6. Indian predictability.
  7. and a lot more…

Which one of these statements do you recognize?

  • You don’t understand “Indian English“.
  • The Indian Yes & No nodding (watch the 1-minute video below) in Indian business culture is difficult to read
  • When delegating a task, you get what you ask for, but not what you want (do you see the difference?)
  • You wonder why Indians don’t ask for help if they don’t understand something, but simply muddle through
  • It’s difficult to understand the Indian “family thing
  • Why do Indians never give you a “straight” answer or why do they say “Yes” to everything?
  • Etc.

If you recognize any of the above examples, read on…

Watch this short, 1-minute video to understand the famous Indian head nod…

What This Article is NOT About

Even though I will use some statistics, this article is not about the facts and figures. It’s about understanding Indian culture in business. More statistics about doing business in India can be found here.

Although there is a map of the country, this article is not a tourist guide. It’s about business culture in India, working with Indians, and understanding Indian culture in business. Next to this, a good source for a better understanding of Indian culture is Wikipedia. Click here to find out more.

So Why This Article on Doing Business in India?

My 20+ years of experience working with different cultures, doing business with India, and working with Indians in and outside India have taken up a significant part of those years.

In addition, I’ve worked with many companies that either employed Indians in their organization or who were working with Indians or doing business in India but then more in terms of outsourcing.

Either way, for most non-Indians, it was not easy working with Indians. People would not understand their English (this tends to be typically true for people from the Mumbai area), or they wouldn’t understand the (famous?) Indian head-shake (does it mean yes or no?).

Quite often both Indians and Westerners simply don’t understand each other. In other words, doing business in India, how to do business in India culture, and working with Indians is not that simple for most Westerners.

And the more you understand Indian culture, the better, more efficient, and more effective you will be.

Books on Indian etiquette and business practice will tell you some do’s and don’ts, but they won’t tell you how to do business in India. You have to dig several layers deeper. Business in India isn’t as straightforward as it is in the West.

Business Culture in India

Below you see a table with an overview of how India scores on the first four primary dimensions of culture. If you want to know more specifics about each of these dimensions, click here.

Scores of India on the First Four Primary Dimensions of Culture

  Hierarchy Loyalty Goal Orientation Predictability
India 74 48 65 43
United States 39 90 63 45
France 65 75 49 88
United Kingdom 38 90 65 36

As you can see, India, compared to the other Western countries, scores quite differently (any score with more than 10 points difference is significant). This means that when you’re working with Indians it is important to realize that different cultures will have different ways of doing business in India.

In terms of the third dimension, Goal Orientation, it is worthwhile noting that the more South you go in India the lower the score will be. Even as low as 25. So it makes sense to ask where your Indian counterpart is from to better understand Indian culture.

India’s Predictability Dimension

A special word on Predictability in India: I call this dimension Predictability as opposed to Uncertainty Avoidance because I think it’s simply more practical to use as a business term. When looking at the fourth column in the above table, you can see that India scores relatively low on Predictability. Most people are surprised to see this because they may relate India to heavy bureaucracy.

An Example of Predictability in India

An example of India’s low predictability is the mountains of paper stacked in many local postal offices. The papers are being collected and kept. But… no one does anything with those papers. Why are those papers being kept then?

The explanation for this is that the rules (in doing business with India) are there to keep the power holder (i.e. the boss) in his position. In other words, to get something done, you need the (written and stamped) permission of the boss (who has a boss, who has a boss, etc). So, it’s not that “the Indian” needs a lot of structure and rules to work.

This is the explanation for the relatively low score on Predictability score in India.

doing business in India map

Working With Indians: Is It That Difficult?

As said before, working with Indians will be different for different cultures. However, from my own experience of doing business in India, there are a couple of things that will help you with understanding Indian culture and will help you to work with them more effectively.

Mind you that these topics cover situations that pertain to how to do business in India, not per se to Indian family lives outside of the work environment.

6 Specific points

  • Indians will generally not say no if you ask them to do something. If you are (being perceived as) the boss, an Indian will nod yes politely. Even if (s)he didn’t understand you. It is, therefore, important to check back if your Indian colleague indeed correctly has understood what you said.
  • In the US and UK, it is possible to delegate upward. Meaning that if your boss asks you to do something you can make it conditional to the extent that you can request your boss to do something so you can complete the requested task. This is not common in India.
  • Being more collectivistic or Loyalty-to-Group oriented, Indians put a lot more emphasis on relationships than on tasks. For an Indian, it is important to know who you are as a person. In India, it is relationships over tasks. In the West, it is task over relationships.
  • Indians communicate indirectly. Direct questions from Westerners are seen as rude and impolite. In response to a Westerner asking his Indian colleague if he can get “this” done in 2 weeks’ time, the Indian could reply with something like “You’re asking quite a lot of me“.
  • Status is important in India. Not only in what you can or have acquired but also in terms of the function or position you have in a company. Being a manager gives status.
  • Although you might not see this at first, rules and regulations are not as important in India as they are in the West. Even though you might experience India as very bureaucratic, the rules, regulations, and paperwork are mainly a function of the power of the powerholder. Not so much a display of the need for rules.

Summing it Up

How to do business in India, understand Indian culture and work with Indians is not as straightforward as you might think. And that says absolutely nothing about the Indians. It says everything about the cultural differences between Indian and Western cultures.

Common Misconceptions

You might think that every Indian speaks English, while actually, only about 10% do (source). Also, not every Indian has an MBA. And finally, not every Indian works in IT.

There are plenty of Indians that do though and even if they speak English, have an MBA, and work in IT if you don’t understand the culture, chances are high that the business you do in India will frustrate you more than necessary. That it will cost you more time and money than necessary or that you might fail completely.

Remember, Culture eats strategy for breakfast…

Doing business with China? Read this article

Other articles on India? Click here, or here

You might also be interested in Why men are better than women

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