India: Business Practices

Business culture

The Fundamental Principles of Business Culture

Work environments are usually based upon hierarchies, and formalities are expected between various levels of management. Order, privacy and punctuality are key business values; and business relationships are often based on mutual advantage.

Hierarchies in India tend to be vertical. Decisions - especially important ones - are rarely made quickly. In negotiations, decisions are generally made by those at the highest of levels of the company hierarchy. It is usual practice not to consider a deal complete until it has been confirmed in writing. That is done both to back up decisions and to maintain a record of discussions.

Indian business culture places a great deal of importance on personal relationships, and many business relationships will be built upon a personal foundation. Though not a requirement when meeting a new business partner, being introduced by a mutual acquaintance is a plus. When meeting a business partner for the first time, it's important to show interest in them by making small talk. It usually takes some time to cultivate personal relationships, but they are important for establishing a good reputation and, from their point of view, makes you a more reliable business partner.

First Contact

Being introduced by a third person should make the first contact easier. It is advised to make appointments at least one month in advance. A personal call will be more effective then an e-mail, as many business relationships are expected to be built upon a personal foundation. The best time for a meeting is late morning or early afternoon. It is recommended to confirm the meeting the week before and call again that morning.

Time Management

In India, it is considered polite to be slightly late, but arriving at meetings on time can make your Indian counterparts impressed with your punctuality. Sticking to a strict meeting schedule is not common, so meetings usually to start and finish late. 

Greetings and Titles

Handshakes are the standard greeting in a business environment. However, a man should wait for a female business colleague to initiate the greeting. If meeting with a group of people, greet each person individually, starting by the eldest or most senior person, followed by the next most senior, and so on. Greeting in a traditional way with “Namaste”, placing both hands together with a slight bow, is appreciated and shows respect for Indian customs. Due to the influence of hierarchical Indian social structure, people should be addressed formally, by their title and surname.

Gift Policy

Gift giving and receiving is very popular in India.  Nevertheless, it is preferable not to offer any gifts before personal relationships have developed. Gifts shouldn't to be large or expensive, as they could be considered an attempt to bribe and may cause embarrassment. Gifts should always be wrapped. However, avoid black or white wrapping paper. Gifts should be given with both hands and they are usually not opened when received.

Dress Code

Business dress code is smart, comfortable clothing. However, high-tech sectors, computing, and bio-science companies have fairly informal dress codes. Still, for the most part, men wear a suit and tie, although in the hottest parts of the country it is acceptable to wear just trousers and a shirt, without a jacket. Ties are usually only compulsory in traditional sectors such as banking and law, or as a part of a uniform. Women tend to dress in elegant and covering outfits. Leather clothing should be avoided.

Business Cards

At the first meeting, business cards are usually exchanged after the initial handshake and greeting. Make sure you receive the card with your right hand and put it away respectfully. University degree or honours should be mentioned on the business card. Having one side of the card translated into Hindi is advisable, more as a sign of respect and not so much for the linguistic necessity, since English is one of the official languages in India.

Meetings Management

Meetings usually begin with conversations about personal matters and general small talk. That is an important part of business, and as such should not be rushed. Given that organisations have a hierarchical structure, the most senior person in the room should always be greeted first.

Decisions should often be based on trust and intuition. Statistics and data are also taken into account. It is therefore as important to build a relationship of trust. In India, the primary approach for negotiating is that, while the buyer plays an important role, both sides should make sure that they reach an appropriate agreement. When negotiating agreements, many rounds of back and forth are expected. Business is seen on the long term, as they expect long term commitments from business partners.

Communication tends to be indirect, and affirmations will be addressed by more nuanced phrases. In some companies.Interruptions are not uncommon, and people might answer their phones in the middle of the meeting. If that happens, it's advised not to show irritation. When talking to people, be aware of your body language, as much significance will be attached to it. Aggressive postures, such as folded arms or hands on hips, should be avoided.

It's not likely that a first meeting would take place over a meal. At business meals, the key people sit in the middle, flanked on either side in descending order by their aides, with the least important people sitting at the ends of the table, farthest from the middle. Business meals are generally not good times to make business decisions, and you should only talk business if your Indian counterpart does so. It is advised to eat with your right hand.

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