Business brief: India

Conversis’ business briefs are a series that give you a quick summary of the social, political, economic and cultural news that you need to be aware of if you’re doing business in a foreign country.

Here’s a snapshot of the information you get in a business brief.

Is India a good country to do business in now?
Yes, we believe it is.

Here’s why.

As the world’s largest democracy and second most populous nation, opportunities in India are rife. With a well-educated population, a booming IT sector and gradual liberalisation of the economy, foreign investment is increasing at a rapid pace.

While India is now considered one of the world’s most important economies, the devastating poverty of India’s rural population remains a grave concern.

Fast Facts

Population: 1.2 billion

Languages: Hindi is the most widely spoken, but there are 14 other official languages. English is commonly used for business.

Religion: Hindu 81%; Muslim 13%; Christian 2%; Sikh 2%

Land area: 3.1 million square km

Currency: Rupees

Capital: New Delhi

Internet domain: .in

International dialing code: +91

Economic indicators: Real GDP growth: 8.5, GDP per capital (US$): $1,145.76

Economy

The Indian economy expanded strongly in early 2010, says the OECD. The agricultural sector enjoyed a sharp rebound, following a return of normal rainfall patterns, while the recovery in the non-agricultural sector continued to strengthen. In late 2010, activity eased from its unusually strong pace and there were signs that the economy was shifting from the recovery phase to one of sustained high growth. Growth in 2012-2013 will be fuelled by a pick-up in consumer spending, aided by a recovery in farm incomes and business investment.

Politics

India is a constitutional federal republic with 28 states and seven union territories. The prime minister resides over a Council of Ministers chosen from the elected members of parliament. Manmohan Singh has been prime minister since his Congress Party was elected to power in 2004; and re-elected in May 2009. Mr Singh’s priorities have been to continue with economic reform, reduce poverty and to forge friendly relations with Pakistan. While economic reform continues, relations with Pakistan suffered following the Mumbai terrorist attacks of 2008, and poverty remains a severe problem. India has a largely ceremonial president who is elected by the state assemblies and national parliament. The current president, PratibhaPatil, is India’s first female president.

Doing business

Business in India is conducted along similar lines to Western nations. The family is highly regarded and business is often conducted through personal relationships. Remember the following hints and tips:

• Expect small talk about lives and family.
• Trust is important and any form of direct disagreement is seen as disrespectful. Be alert to indirect verbal and non-verbal signs of disagreement. Never say “No”. “I’ll try” is an acceptable refusal.
• Business negotiations often take a long time in India, where the spirit of fatalism drives an attitude of ‘what will be will be’ and negotiations take their own time.
• Men generally wear a suit and tie for business. Women dress conservatively and keep their upper arms, chest, back and legs covered at all times.
• Hindus revere cows and therefore leather products could cause offense – especially in temples.
• The head is considered the seat of the soul. Never touch another person’s head, not even a child’s.
• Beckoning can be construed as an insult. Likewise, standing with your hands on your hips is considered aggressive.
• Shaking hands is common practice but men should wait for female
  colleagues to offer their hand first.
• Feet are considered unclean. If your feet or shoes touch another person, apologise.
• Business lunches are preferred but be aware of the eating and drinking customs of your colleagues. Hindus don’t eat beef and Muslims don’t eat pork.
• Titles are very important. Always use professional titles.

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Read Business briefs: India plus 16 other business briefs here

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