India: A Land of

Opportunity

SIFE School of Management Studies Team

 Case for India
• Democratic Republic.
• Market and central planning economy.
• 300 million middle class and growing.
• On a PPP basis the per capita income is about $ 25,000.
• Of the 300 million about 50 million have a per capita income of
above $ 50,000.
• Entrepreneurial-receptive to foreign investment and
collaborations
• India’s labor force of 400 million.
• India’s Tenth Five year Plan (2002-2007) estimates the creation of 100 million
jobs in the next decade in the industrial sector.
• India ranked as the world’s second most favored destination for foreign direct
investment.
• Liberal market reforms initiated in July, 1991 by Manmohan Singh’s (Current
Prime Minister) structural reforms in power, telecommunications, infrastructure,
electronics and information technology and oil and gas.
• Foreign investment in most sectors welcome except strategic sensitive sectors
e.g. atomic energy and defense
• Foreign equity participation raised to 100 percent in several important areas
Taj Mahal, Agra
The Golden Temple,
Amritsar, Punjab
 Buddhist Monuments at Sanchi

Khajuraho caves
Madhya Pradesh

Qutb Minar and its Monuments, Delhi

 Largest Democracy in the World

Dr. Abdul Kalam Azad Mr. Bharu Singh Shekhawat  

(The President) (The Vice President)
Top Scientist

Dr. Manmohan Singh Mr. P. Chidambram

(The Prime Minister) (Finance Minister)
Economist

In a Hindu dominated nation, a Muslim hold the post of President & a

Sikh hold the post of Prime Minister
 Macro Economic Factors
GDP $785 billion
Forex Reserve $ 150 billion
Income Par Capita $ 740.7
Exchange Rate 44.67 Rs = 1 USD
Literacy Rate 64.8 %
Unemployment Rate 7.32 %
GDP Growth (2004-05) 6.1 %
Population 1.08 billion
Total Area (Sq km) 2,973,190.00
Growth Rate
- Industrial (2004-05) 9.0 %
- Construction 10.8%
- Export (2004-05) 24.41%
- Import (2004-05) 35.62%
Export (2004-05) $ 79.59 billion
Import (2004-05) $ 106.12 billion
External Debt (2004-05) $ 123.3 billion
 Major Exports
• Engineering Goods,
• Gems And Jewellery,
• Textiles & Clothing,
• Agro Products,
• Chemicals,
• Ores And Minerals,
• Petrol And Products.
• Machinery,
• Petroleum And Petroleum Products,
• Chemicals,
• Telecommunications Equipment,
• Computer Equipment,
• Food And Live Animals,
• Crude Rubber,
• Beverages,
• Tobacco,
• Clothing Etc
 Major Imports
• Crude Oil,
• Pearls And Precious Stones,
• Gold,
• Electronic Goods,
• Chemicals,
• Machinery and transportation equipment,
• petroleum and petroleum products,
• crude materials,
• foodstuffs,
• tobacco,
• textiles,
• iron and steel,
• Aircraft etc
 Differences between Indian Culture & Western Culture

Basis Indian Culture Western Culture

Belief in Faith & Strong believers Believe in hard work & efforts
Luck
Belief in Spiritualism Strong believers Believe in Materialism
Public Appearance No body exposures. Fashionable clothes the in
Considered obscene. thing

Care of Old People Sons are expected to take Old parents are not cared for.
care of their Parents.

Respect for Women No religious ceremony is Relegated to Old Homes

held without wife. Women looked as objects of
Women given respect in pleasure. Women are free
traditional sense in every aspect
 Business Culture - India
Showing hospitality is part of the negotiation
process. Often meetings start by offering
tea/coffee and snacks. It is courteous to
accept the offer.

Relationships and feelings play a larger role in decisions in India.

In general, Indians tend to take larger risks with a person whose
intentions they trust. Thus, one's credibility and trustworthiness
are critical in negotiating a deal.
 Business Culture - India
Indians are 'polychronic' people, i.e., they tend to deal with
more than one task at the same time. So be prepared for
some distractions/ disturbances during the meeting, e.g., a
secretary walking in to get some papers signed, or the
conversation sometimes digressing into unrelated topics.
One must appreciate that such behavior/occurrences do not
show a lack of interest or attention.

Indians are inductive in their approach to understanding things. In the

Indian psyche, reality can be understood only in its overall context.
Knowing the personal, social and historical contexts [of people, events,
ideas, etc.] are a precondition to comprehending them accurately.
Therefore, one should be prepared for questions and enquiries, which may
not seem to be directly related to the subject. To people coming from more
deductive cultures, this behavior often appears to indicate a lack of focus
and digression.
 Business Culture - India
PowerPoint presentations are generally accepted to
start the discussion. It is necessary, however, to
send a more detailed proposal in advance. Often,
the details of the proposal are vetted by some
middle-level executive, who will then brief the
superior about them.

In general, Indians are cautious in accepting a new idea or

proposal. Openness to a new idea depends not only on its quality,
but also on its source and endorsement. That is, information about
who else has implemented it or who has proposed it has a major
influence on the decision about a new idea. In making a proposal,
you must include such details accordingly.
 Business Culture - India
Indians usually do not express their disagreements
openly and directly; doing so would be considered
discourteous. Instead, when differences arise, they
may circumvent them by statements such as 'we will
discuss this later' or 'I will have to check with others
about this.

Bargaining for the price or additional concessions is normal in

India. Indian negotiators expect and value flexibility in negotiation.
Therefore, sometimes a straightforward offer may be perceived as
a rigid stand. It is always advisable to build some buffers in one's
initial offer, which allow for bargaining later.
 Business Culture - India

Do not insist on commitment in the first meeting. Making a

decision, in Indian organizations, is often a long-drawn out
process. This is not only because of the bureaucratic nature of
many Indian organizations, but also because a decision may have
to be ratified by people who may not be present at the negotiating
table.
 Gifts

• Box of Sweets
• Chocolates
• Bouquet of Flowers
• Household Items
• Liquor, but . . . .
 Topics of Conversation

• Families
• Tradition
• Foreign Countries Poverty
• Cricket
Personal Matters
• Politics & Religion
Military Spending
 Colors

Red Birth & Fertility Wedding Dress

Bindi
Blue Heavens, Truth & Mercy

Black Death, Anger & Intolerance Alcohol

Sudra ( Low caste)
White Creation, Rebirth & Brahmins
Reincarnation (High caste)
 Doing Business in India

If there ever was an example of what a

heterogeneous society looks like, it is India.
The differences between people due to
region, religion, language and caste make it
very difficult for anyone to impart general
observations on the country. Behavior,
etiquette and approach are all modified
depending on whom you are addressing and
the context in which you are doing business
in India.
 Hierarchy
One of the most significant cultural influences on Indian
culture is that of hierarchy. You will see this manifest in many
ways when doing business in India. For example, only the
owner or the most superior person of a company will make
business decisions. Even if you are dealing with a manager,
they will always go to the boss for a final decision.

• You may often find that, as a sign of respect, subordinates stand

up when the boss enters a room. If you are unsure whether to rise or
not, err on the side of caution and do so.
• Women in business, especially in senior positions, executives, are a
relatively new development. If you are a woman doing business in
India, you will normally find people respectful and courteous, but not
very comfortable in working with you for business deals. You may
have to make extra efforts to get them to discuss business with you.
 Meeting and Greeting

•Handshakes are exchanged on meeting. Indians themselves use

the namaste. This is where the palms are brought together at chest
level with a slight bow of the head. However as a foreigner doing
business in India you would not be expected to use it.
•When addressing an Indian try and use the appropriate
formal title, whether it is Professor, Doctor, Mr, Mrs followed by
the family name.  
•Names speak volumes about an Indian’s background. For
example, a Singh will usually (but not always) be a Sikh. The suffix
“-jee” ( as in Banerjee) is a sign of a high caste. Arabic sounding
names such as ‘Abdul’ will be used by Muslims.
•When doing business in India, business cards should be
exchanged at the first meeting. English is the language of
business so there is no need to translate your cards. Be sure to
receive and give with your right hand. Make sure the card is put
away respectfully and not simply pushed into a trouser pocket.
 Building Trust

Doing business in India involves building

relationships and establishing trust. It is
vital that a good relationship is founded
on two foundations.
1) on a business level, i.e. demonstrating strong
business acumen, professionalism and
qualifications and
2) at a personal level, i.e. relating to your
partner and exhibiting the positive traits of
trustworthiness and honour.
 Meetings and Negotiations
• Punctuality for meetings is expected, although being 10
minutes late will not have disastrous consequences.
Flexibility is part of life!
• When entering a meeting room you must always
approach and greet the most senior figure first. Never
get ‘down to business’. Meetings should always commence
with some conversation – good topics of conversation
include cricket, politics and film.  
• If your doing business in India involves negotiations,
always bear in mind that they can be slow. If trust has
not yet been established then concentrate efforts on building
a rapport.
• Indians do not base business decisions solely on
statistics, empirical data and flashy PowerPoint
presentations. They use intuition, feeling and faith to guide
them. Always exercise patience, show good character and
never exhibit frustration or anger.
 Language

Different states in India each have different

official languages. Central government only
recognizes Hindi as the official language of
India. However, when doing business in
India, English is the language of
international commerce.
 Foreign Investment
• Most sectors follow the automatic approval route

• FDI caps:
Telecom up to 74 percent,
Mining 74 percent,
Private sector banking 49 percent,
Insurance 26 percent.
(The government is seeking to increase the FDI caps further)

• FDI up to 51 percent in priority capital and intermediary goods sectors.

• Non resident Indians and overseas corporate bodies allowed 100

percent equity in key areas.