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 of more than 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 8% per annum GDP in 2017) 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, coupled 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 the 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.
Written and Produced by Keith Warburton
This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in India. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.
With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in India and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.
Therefore this briefing note is broken into short, bite-sized sections on the following topics: