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India: Country and Foreign Investment

Business Environment

This page was last updated on 11 Dec 2018.

The key to understanding Indian business culture is hierarchy. This results from the caste system, in which every person knows his or her place to a degree which many egalitarian Westerners find surprising.

Although the caste system has been evened out to some extent, though it is still pervasive. In a typical Indian organization, many tasks can only be performed by people of the appropriate caste; boss figures, who normally come from a higher caste, will not consider tasks that are delegated to lower caste members. It would be inappropriate, therefore, for a manager to make coffee for subordinates or to move a table. Unsurprisingly, this can lead to inflexibility and delay.

The role of a manager is as prescriptive as the role of a cleaner: bosses must manage, and must do so in an authoritarian and complete manner. If working with Indian staff, very little should be left to the discretion or initiative of underlings. If you don't make it precisely clear what you want, the result will be confusion and inaction.

Handshakes are normal when meeting people, but it is also acceptable to use the namaste, in which the palms of the hands are brought together at chest level with a slight inclination of the head. People are  normally addressed by their titles (doctor, professor, minister), with or without their personal name. Business cards are de rigeur when first meeting an Indian businessperson. Although women have a lowly place in many Indian communities, they are perfectly well accepted in business situations, where apparent rank will count for more than gender.

Meetings should be well organised, and should be conducted in a way that reflects the relative seniority of the people present. If a senior manager is absent from a meeting without obvious cause, this can be taken as a sign that nothing much is to be expected from that meeting. During meetings, and other Indian business encounters, be prepared for a much higher level of chit-chat than in an equivalent Western situation. It is normal for an Indian to break off a meeting to take a personal phone call or socialize with colleagues.

While it may be difficult at first to understand the relative positions of individuals in the group with which you are negotiating or dealing, there are some pointers. It is highly probable that the members of a team will enter a room in the order of their relative importance, especially in the presence of a foreigner. Junior members of the team will constantly defer to their seniors in conversation and in body language.

As in some other Asian civilizations, confrontational tactics are not likely to be successful. There is also a bias against direct speaking: if an Indian uses phrases such as 'we'll see' you can probably take it to mean 'no'.

It is normal to give gifts to Indians during a negotiation process; they should be wrapped and will not be opened during a meeting. Black or white wrapping paper should not be used; and one should avoid alcohol or foodstuffs unless you are sure of the religion of the recipient.



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