The Importance of Understanding Culture When Doing Business in India

When doing business in foreign countries it is important to be aware of the differences inherent in the opposing culture.  This is of more importance when dealing with cultures that are far removed from the ones that you are used to dealing with on a daily basis.  Differences in the business cultures of the U.S. and the U.K. can often likely be overlooked as mere idiosyncrasies. Differences between the business cultures of the U.S. and a country such as India may not be so easily overlooked.

India is one of the fastest growing economies in the world, and with a population of over 1 billion people, companies from around the world are looking to enter into its markets.  This can pose quite a challenge since India is a conglomeration of both eastern and some western ideals.  This combined with India’s many different regions, dialects, and religions can make doing business there a bit of a challenge, but overall there are some standards that can generally be followed.

Hierarchy

The business culture of India is very much based on a somewhat rigid hierarchy.  This is due in large part to India’s past adherence to a caste system that was part of Hinduism, and the re-enforcement of these ideas during India’s time as a British colony.  Even though the caste system has been officially abolished, its shadow still lingers. Only in the last 20 years or so have Indians really been able to begin to break out of the societal structures that have bound them for centuries and increase their standing beyond what their family’s was in the past.  These social reforms aside, there is still a structure to adhere to in order to avoid any unintended insult. It is important that when addressing someone to always use their title.

Business are run by very strong willed individuals.  If there is any hope of getting a deal done then it must be negotiated at the most senior levels; people lower down simply aren’t involved in major decisions.  

(http://www.culturesmartconsulting.com/india-class-caste-and-hierarchy)

Manners

The manners that must be displayed when doing business with entities in India tend towards the politeness that is found more in far eastern countries like Japan, but not quite to the Japanese extreme.  While in most other aspect of Indian society, “Fashionably Late,” is more the norm, business is performed with punctuality.  As previously mentioned the most senior person should be greeted first and their full title used, and business cards should be exchanged.  

The giving or taking of anything should be done with the right hand; using the left can be viewed as obscene and an insult.  The same view can be taken from several mannerism that are common in western cultures.  Beckoning someone over with your finger and maintain a power stance can be seen as rude and offense.  

The giving of gifts is traditional, but it is not done at the very first meeting.  In India, it is important to build a trusted relationship with those that they are doing business with.  They rely more on their intuition than on facts and figures to make a business decision.  Gifts should be exchanged when there begins to be

(http://www.kwintessential.co.uk/etiquette/doing-business-india.html)

Religious Considerations

India is a country filled with a number of different religions, and devout followers.  Many innocuous things that are taken completely for granted can be viewed as insulting or sacrilegious.  With the vast majority of the Indian people being Hindu, showing up to a meeting with a nice leather briefcase might be disquieting for some.  With so many different religions, it best to avoid the topic of religion all together.  Historically this is due to the fact that not all of the religions have always gotten along, or may not have a positive of each other.

When negotiating with a business in India, it is important to be aware of the many religious holidays.  They are widely observed and are not handled in the same way that many in western countries might decide to work during a holiday.

 

This is just a general overview of some of the most common aspects of the business culture in India.  When deciding to do business in India, it is important to research the specific region that you are targeting to pick up on the specific customs of that region.

 

Collin Discoll

MBA Candidate 2016