Background To Business in India

India:

As a country, India covers a land area greater than that of Europe. Its inhabitants speak a bewildering array of languages (16 official languages as well as innumerable local dialects and patois) The people live in twenty-eight states and seven union territories. It is hardly surprising, therefore, that India is a country about which it is very difficult to make sweeping generalisations.

Yet India presents a massive market opportunity for companies who wish to expand their markets internationally. With a population approaching 1.2billion - many millions of whom are reasonably affluent and possess large disposable incomes - the sub-continent is widely tipped to be the second or third largest economy in the world within the next 20 years. (it is already the 3rd largest economy by GDP Purchasing Power Parity).

People often forget that business in India (growing at about 9% per annum GDP in 2011) is powered by a very strong domestic market which has seen strong performances in all three sectors or agriculture, industry and services and that these sectors, couple with high savings rates and a very favourable demographic trend, make India much more than merely a 'low-cost' option.

Any business organisation that wishes to profit from India's rise, would do well to spend a little time studying the cultural norms which drive the thinking of the Indian people.

Although it is difficult to generalise about approach to business in India, there are certain factors which would seem to be almost universal in their applicability and which need to be borne in mind when working with Indian contacts. These issues include the fact that India is a country in which relationships are placed before business and thus the relationship phase of the business cycle could be considered to be the most important.

In addition, the legacy of the caste system ensures that businesses are extremely hierarchically structured and that the boss is very definitely the boss.

These issues will be looked at in more detail later in this country briefing.

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Suggested Reading List...

Doing Business in India Rajesh Kumar and Anand Sethi
Doing Business in India Pawan S. Budhwar and Arup Varma
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