I was born and raised in Maharashtra (Mumbai), India, so I was intrigued to write a blog about doing business in my homeland. India is the world’s second most populated country and the largest in South Asia.
The UN estimates India has the largest democracy and will become the world’s most populous nation by 2028. India is a massive country in every way, shape and form. Comprised of 29 states, 22 official languages and nine recognized religions, this nation is among the most diverse places in the world. Before planning any business trip to India, it is important to understand some key facts that make this destination entirely unique.
As I mentioned earlier, there are 22 official languages approved by the constitution of India. Surprisingly, this does not include English. However, as India is the second largest English-speaking country in the world, there is a rather limited language barrier, especially in the business world. English has played a major role in modern India. English is the universal language that has linked Indians with international commerce.
The 22 official languages of India are Assamese, Bengali, Bodo, Dogri, Gujarati, Hindi, Kannada, Kashmiri, Konkani, Maithili, Malayalam, Manipuri, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Santhali, Sindhi, Tamil, Telugu and Urdu.
Hindi is the native language of 41% of the population and many more speak it as a second language. It is the main working language of the Central Government and often serves as a common language among Indians with different native tongues. In general, most official signs are multilingual in the local language (if not Hindi), Hindi and English.
To have a successful business venture, it is crucial to have a good understanding of the different values, beliefs and assumptions of the Indian culture. Learning how Indian business people present and conduct themselves in the workplace should not be overlooked. You will find the following tips very helpful:
- Always greet a person with a handshake or a Namaste, a common greeting that involves pressing your palm together with fingers pointing upwards. You can also slightly bow if desired, however, it is not necessary.
- Recently, there have been some cultural shifts and people have begun to dress more casually at work. For example, a button-down shirt and khakis or chinos for business meetings. However, it is still highly recommended to wear business attire, especially foreigners. A suit and tie are not necessarily required unless it is a very important occasion, but a formal shirt and trousers will definitely help to impress.
- Always use Mr. or Mrs. when addressing any of your colleagues. For anyone with official titles, like a minister, doctor or professor, it is recommended to address them with their title.
- Indians are open to beginning their business conversations on a casual note. For example, talking about the weather, family, travel, etc. However, during your initial meeting, before a relationship is established, it is better to avoid sensitive topics, such as cultural norms, superstitions and politics.
At the end of 2016, India was the world’s fastest-growing major economy with a GDP expanding by 7%. Once a member of the heralded BRIC economies, this all came to an abrupt end on November 8, 2016. This now infamous date in Indian history marks the day the government announced a surprise devaluation of two of its most valuable Rupee currency notes, the ₹500 – approx. $7.68 – and ₹1,000 – approx. $15.36. These Rupee notes in question accounted for 86% of the country’s currency in circulation. This unprecedented move was aimed at cracking down on corruption and illegal cash holdings called “black money”. This stream of black money even created a parallel economy that accounted for 20% of India’s GDP. Due to the sheer gravity of the measure, the economy was stunned and brought activity in some sectors to a screeching halt. India has now put those issues behind them and is continuing to grow again. Industries like textiles, pharmaceuticals, steel, cement and mining are some of the top industries in India. Above all else, gold ranks as India’s number one export.
Business Laws and Regulations
Obtaining a business license in India can be very challenging due to complex laws and political pressures across the country. It is recommended to consult with a seasoned business lawyer before proceeding. The first step and frankly the fastest way for any foreign company to enter India is to register as a Private Limited Company (PLC). The PLC has limited legal compliance, no minimum capital contributions and limited liability of its members, among other benefits.
With highly efficient and educated engineers, developers and project managers whose salaries are far less than the West, multinational companies will continue to rely on India’s workforce for cost-effective growth. India’s economy grew close to 7.2% during FY 2016-17 and further accelerated to 7.7% during FY 2017-18. While the GDP has slowed to 4.7% for Q3 2019-20, the outlook is still positive.
With reasonably lower salaries and an incredible work ethic, India’s gigantic workforce will continue to fuel this nation’s growth and importance on the world stage. Coupled with a promising government and relaxed incorporation models, India is most definitely a recommended business center.