Whenever you enter a new market, besides the opportunities that you see, there would be hurdles to overcome. In India, the most significant barrier is cultural differences. Business in India is not easy, there are so many challenges that you have to face. From bureaucratic and administrative hurdles to the complex regulatory and statutory compliance, there are many obstacles to cross. And most importantly, consumer behavior and preferences vary across regions.
If you decide to do business in India, make sure you are fully prepared. Decide beforehand what type of business structure you want to establish. Most new entrants prefer setting up LLP in India because of its tax and regulatory benefits.
What makes India an Attractive Business Destination?
India is the fastest growing large economy in the world; its GDP registered around 7 per cent annual growth throughout the last decade. India is also the youngest economy in the world, with average age of around 30 and around two-thirds of its population in the working age group, which gives a phenomenal edge to its economy over other countries.
Another factor that makes India an attractive business destination for the global players is the fact that domestic consumption is very high. Though India is fast emerging as an export hub for both, domestic and foreign companies, its domestic market continues to grow at fast pace. Of its 1.3 billion people, around 450 million are in the middle class whose income levels have been rising over the years, translating into higher purchasing power.
Discussed below are some tips on how to be successful in your India venture.
Negotiating the Language Barrier
English is one of the around 25 major languages spoken in India, and a substantial chunk of the population speak fluent English. It is, in fact, the preferred language for business. Though it makes communication with your aides and associates easier, it can also create confusion. Interpretation of the language may sometimes be dramatically different from that of the native English speakers. It is crucial to understand how Indians think and speak. A phrase or a word could have entirely different meaning for them than what you thought. So, make sure that you understand their version of the English language.
Choosing the Right Base for Your India Business
India is vast country and major markets are spread across the country. You will have to travel a lot across the length and breadth of the country to address your business needs. You should base yourself in a city which is well-connected with other major cities where your market lies. Mumbai and Delhi are the preferred locations as they are the financial and political capitals. However, Bengaluru, Chennai and Hyderabad are also good choices as they have become major IT hubs. Ultimately, your choice depends on the needs of your business and where your major markets are.
Understanding and Adjusting to the New Culture
Visitors to India are immediately reminded that they have entered a country with a vastly different culture. However, a majority of the population, particularly in offices, will give an impression that they are highly modern looking and westernised in their thinking and approach. But deep inside, they might be conservative, bound by their cultural beliefs. So, open up and try to see and understand people more thoroughly, looking beyond what is apparent superficially. India is diverse county with many religions, languages and cultures, so avoid jumping to conclusions by stereotyping them all. Try to mould yourself into the local cultures.
Learn to be Patient
Patience is the key to business success in India. Things take their own time to be accomplished in this country. Sometimes, deliveries can happen incredibly fast, while on other occasions it may take a frustratingly long time. So, you have to be patient and maintain your composure to succeed here. The more quickly you learn and adjust to the ways of doing business in this country, the better it would be for you.
There are no fixed rules of doing business in India, with less specificity on plans and contracts. If you enter into some contracts or agreements, expect several rounds of re-negotiation before it is finalised. Indians start their day late and work late hours. Dinner meetings in your country might happen at six in the evening, but in India it doesn’t start before 9pm. If you are in the middle of a meeting or a conference, be prepared to be interrupted by phone calls or some other work that needs urgent attention. Indians do several things at a time, so don’t get irritated or frustrated.
To conclude, running a business in India is not easy; you have to be prepared for lot of cultural differences and new norms of business. Also, make sure that you have the right business structure; setting up LLP in India is a better option than other forms of business set up.