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16 March 2018
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3 minutes

Cultural considerations when doing business in India

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India is a multilingual, multi-ethnic society, with notable cultural differences between the north and south. A thorough understanding of the underlying values and beliefs of the local culture is crucial to the success of your business.

India is one of the fastest growing countries in the world. It also has huge economic potential. The 2018-19 Union Budget highlighted that the country has a $2.5tn economy, which is the seventh largest in the world.

An unprecedented period of economic liberation has granted overseas investors increased access to its vast and diverse market.

A large, youthful population and a strong export sector await expanding businesses, with a potential consumer base that far outstrips most other nations in the world. Political stability is also a big pull for expanding companies, whilst a well-developed banking system and thriving capital market highlight the maturity of its financial system.

The concept of investor protection has attracted a lot of attention in recent years, with bodies such as the Securities and Exchange Board of India (SEBI) leading the charge. The SEBI was set up in 1992 to protect the interests of investors and to promote the development of, and regulate, the Indian securities market.

A cultural hotbed

India is a multilingual, multi-ethnic society, with notable cultural differences between the north and south. Business is rooted in building long-term relationships.

A thorough understanding of the underlying values and beliefs of the local culture, and how they can affect the workplace, is crucial to the success of your business. Having local help can really make a difference to the success of your venture.

There are, however, a few tips that can help you understand business culture in India and guide you through those first important steps.

Make the right first impression

Business dress traditionally consists of smart, comfortable clothing. A lightweight suit is acceptable, given the heat, and ties are not compulsory, except in more formal sectors such as banking or law. Women are advised to wear a trouser suit rather than a skirt.

A handshake is common across the country. Many Indians also use the ‘namaste’, a local greeting that involves pressing your palms together with fingers pointing upwards. This movement is accompanied by a slight bow.

Indian people tend to prefer to use formal titles. Using terms like Dr. or Professor (or otherwise Mr. or Mrs.) in the workplace is the norm. ‘Ji’ is a gender-neutral term used as a suffix in many Indian languages - mainly Punjabi, but also Hindi and other dialects in northern India.

Respect meeting etiquette

There is a particularly hierarchical relationship between managers and staff in India. Decisions are usually made at the highest level. When entering a meeting, you should always greet the most senior person first. When exchanging business cards, you should receive the card with your right hand and put it away respectfully.

Small talk at the beginning of a business meeting is common. It could include questions about your family, and it is equally acceptable to ask about the family of business partners. This can be a good way of building trust.

Although punctuality is expected, do be prepared for meetings to start and finish late and for interruptions to occur. Remember that negotiations in India can be slow.

Understand the language of business

English is the official business language and many locals speak it fluently. Indian people generally find it difficult to say “no”, as they believe it can be perceived as offensive. They may instead give evasive responses such as “yes, but…” or “we’ll try”. You should listen carefully to see what is really being said. Work together to find the right solution, as being pushy is frowned upon.

Build long-term relationships

Indian people tend to base business decisions on trust and their gut feeling. They place a great amount of value on cultivating relationships with the people they do business with. Take the time to get to know your business contact. Make small talk and socialise where there is the opportunity to do so. Rushing straight to business can be perceived as rude.

Talk to us

TMF Group has the local knowledge to help you navigate these complexities. Whether you want to set up a new venture in India, or just want to streamline your Indian operations, talk to us.

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