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India: Country and Foreign Investment

Business Environment

The key to understanding Indian business culture is hierarchy, as a result of the caste system, in which every person knows his or her place to a degree which is surprising and even offensive to egalitarian Westerners.

Although some evening out of the caste system has taken place, you should not over-estimate that. 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 reserved to lower caste members. It would be inappropriate, therefore, for a manager to make coffee for subordinates or 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 possible 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 should normally be addressed by their titles (Dr, Professor, Minister), with or without their personal names. Business cards are de rigeur on first meeting with 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 prepared, and should be conducted in a way that recognizes 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; and junior members of the team will constantly defer to their seniors in conversation and in bodily behaviour.

As in most 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 that as a '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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