Developing effective cross-cultural business skills for success in India goes beyond simply understanding Indian business etiquette and customs. While conducting intercultural training for business in India, we have found the biggest cultural challenges occur at a much deeper level and involve differences in cultural values and worldview.  However, the following list of  do’s and don’ts of business in India is a very practical place to start.

• DO – show respect and deference to authority figures. Use appropriate titles to address your Indian counterparts. Use “Mr.” or “Ms.” if you are unsure.
• DO – wait for a female business colleague to initiate a greeting. Indian men do not generally shake hands with women out of respect, although this practice is becoming more accepted in certain regions of the country. A slight nod of the head can be used to greet a female colleague if she does not initiate a handshake.
• DO – remain polite and composed at all times in order to prove that your objectives are sincere. Avoid expressing anger as this will damage the relationship and cause you to lose ground in negotiations.
• DO – share aspects of your personal life such as information about your family and your hobbies and interests.
• DO – accept invitations to a colleague’s home, and sample the food or drink that is offered. Bringing a small gift such as flowers or sweets is appropriate. Avoid giving large or expensive gifts as this may cause embarrassment.
• DON’T – be overly aggressive in your business negotiations. While Indians are generally tough negotiators, outward displays of aggressiveness or lost tempers will lose you respect.
• DON’T – refuse food or drink offered to you during business meetings as this may cause offense. If you do not drink tea or coffee, you may ask for a glass of water. When dining with Indians, it is best to assume that they are vegetarian and that they do not drink or smoke. Let your Indian partner initiate ordering or offering alcohol.
• DON’T – point the bottom of your feet at anyone as this may be seen as an insult.
• DON’T – gesture for someone to come toward you by using an open hand.
• DON’T – be confused by the Indian head shake. It is generally used as a non-verbal expression to indicate that the listener has heard what you said. If you are in doubt in regards to a colleague’s opinion, ask open-ended questions.

Indians are generally accommodating and will make great efforts to adapt to the cultural preferences of expatriates. This is not to say that expatriates will not need to adapt their work and communication styles in order to succeed. Expatriates doing business in India have often remarked on the following cultural influences.

1. Value of personal relationships

In Indian society and business, trust is established more through personal relationships and connections than through legal contracts or a company’s reputation. As a result it is very difficult to establish a strong business relationship without first forming a personal relationship. Sharing information about your family, engaging in discussions about personal hobbies and interests, and spending time with your Indian partner out of the office will build the necessary relational capital and trust to sustain the relationship when business demands and negotiations heat up.

2. Indirect communication style

A hallmark of Indian communication is the desire to maintain harmony in relationships. Although many have adapted to the direct style of their western business partners, most Indians prefer to communicate bad news in an indirect manner. This is especially true when communicating with a superior or with a client. Expatriates unused to indirect communication will often misunderstand their Indian counterparts by failing to read between the lines. For example, Indians will rarely express a negative response by directly saying “no”. Responses such as, “yes, but it will be a bit difficult,” or, “that may be possible – what do you think?” are more common and should be considered the same as a “no”.  Asking open-ended questions, inquiring into the potential problems of a proposal, and actively listening for subtle clues are a few tactics which go a long way in avoiding miscommunication.

3. Hierarchy

Most Indian organizations are run from the top down. Indians are very astute in negotiating power in business relationships and maintain a fairly rigid hierarchy. This is demonstrated in the Hindi language, which has four forms of addressing someone based on their relative status to you. Status is highly valued in Indian society and those in positions of power are often given greater lee-way than the average Indian citizen. Expatriates are encouraged to partner with the highest possible level of an organization and to anticipate delays from both internal and external politics. Expatriates who are able to demonstrate patience when facing bureaucracy and who respect Indian values which differ from their own will discover that almost nothing is impossible in India.

4. Adapting versus planning

In India – as in many emerging markets – business objectives are accomplished by adaptation and improvisation rather than by implementing carefully constructed plans. While expatriates prefer to factor in known variables and develop contingencies for every foreseeable scenario, Indians place greater emphasis on flexing to emerging circumstances in order to achieve objectives. Expatriates who not only localize their products and services but also their way of doing business are rewarded with success more often than those who attempt to rigidly implement pre-formed plans. American corporations facing frustration with their Indian counterparts in this arena are encouraged to engage the services of cross-cultural consultants to obtain operational synergy.

Stay tuned for Doing Business in India, Part 3: Business Etiquette and Customs

Introduction

Long before the East India Company emerged on the subcontinent in the early 1600s, scores of traders had graced India’s shores to bolster their business profits. Today, multinationals flock to India to augment their business processes and IT services and to search for growth in India’s burgeoning market of 1.2 billion. With an economic growth rate of 8.6% year on year in 2010/11, the future is looking bright for the world’s largest democracy. Like any emerging market, however, Doing business in India comes with its share of risks and challenges.

The World Bank ranks India as 134 (out of 183 countries) for Ease of Doing Business, with government bureaucracy and inadequate infrastructure major contributing factors. Protecting intellectual property, enforcing contracts and communicating cross-culturally can also present significant challenges. Nevertheless, the economic reforms of 1991 and subsequent economic liberalization policies have opened India to foreign direct investment, which surpassed 37 billion in the 2009/2010 fiscal year. Many Indian states have established Special Economic Zones, successfully attracting investment from IT, BPO, and manufacturing sectors. Other industries experiencing significant growth in India include telecommunication, energy, construction, education and retail.

Business in India Quick Facts

Business language: English

Hours of Business: Traditionally Indians work from around 10am to 7pm Monday – Saturday. Most Indians will not leave the office until their supervisor does. A five day work week is becoming more common and hours are often adjusted to accommodate the needs of international business partners.

Dress: Suits are expected for executive level business interactions. Smart business casual is appropriate for mid-level managers and employees will often dress casual. Indian businessmen generally do not wear short-sleeved shirts or polo/golf shirts in the workplace. Pantsuits or skirts are appropriate for women, provided that they are at least knee-length.

Gifts: Gifts are appropriate but should not be overly expensive. Always accept gifts in both hands, and do not open them in the presence of the person who gave them to you. Invitations to a business partner’s home for dinner are common, as personal relationships are the basis for establishing trust in business.

Business cards: Traditionally cards are presented and received using two hands.

Gender equality: While India has had both a female prime minister and president, women remain underrepresented in the workplace. International businesswomen are generally treated as equals, as their position and status often override traditional gender roles.

Stay tuned for Doing Business in India Part 2: Cultural Values