Doing Business in India

Doing Business in India

India has opened its doors to the international market, creating opportunities from infrastructure-development projects to export or import collaborations. But doing business in India requires thorough research before you board a plane for the subcontinent. To save time and avoid bureaucratic hurdles, contact your government's appropriate departments, such as the India desks at the U.S. State Department and the Commerce Department, to get the latest rules and regulations governing investment, the export of goods, and the import of goods or services. Also contact the nearest Indian consulate or embassy for the names of bilateral trade organizations in your home country that can offer useful advice and current information on India's ongoing reforms.

If you are visiting Delhi, try to arrange a meeting with the commercial affairs department attached to your embassy or high commission. This department may be able to put you in touch with helpful officials in the Indian government and appropriate parties in the country's private sector. The U.S. commercial affairs department can also give you a list of the Indian offices of the U.S.-India Business Council, which have been established in important metropolitan cities. The list of regional offices is expanding each year, along with the presence of American companies. The U.S.-India Business Council offers on-the-ground support to American firms. The department can also provide a list of Indian business organizations, such as the Chamber of Commerce and the Confederation of India Industries, and the names of their officers. With memberships that include leading business executives and industrialists, these organizations have tremendous clout.

Try to fix most of your appointments before you leave, and don't plan a trip close to a major holiday, such as Diwali or Republic Day, when business slows to a crawl for days. Remember that, in the best circumstances, doing business in India takes time. Do as much as you can in advance and assume that everything will take twice as long once you arrive. For this reason, come armed with patience.

India still has mixed feelings about the arrival of multinationals and foreign businesses. Some politicians and industrial houses fear the onslaught of international consumer goods that they believe will destroy indigenous companies or have no intrinsic value for the country. A popular slogan in India is "computer chips, not potato chips." Consequently, liberalization has been subject to hiccups, and reforms are moving at an uneven pace. Some deals are approved quickly; others become stuck in bureaucratic red tape. If you want to enter India and actually set up shop, ask the American Embassy or the U.S.-India Business Council for a list of lawyers or consultants who know the right way to fill out the clearance forms that lead to the appropriate permit that must be secured from the government to do business in India. A good local lawyer or consultant can help you determine which states are more aggressive in the pursuit of foreign investments and more amenable to the presence of your particular business. Local guidance could save you time and money in the long run. Some multinationals have had to abort projects after they've sunk money and even acquired land in a state that is mired in protest over the arrival of outsiders intent on creating products that are perceived as unnecessary or environmentally or culturally degrading.

A Few Tips

Also remember that by nature, Indians want to be obliging and find it hard to say no. Often they communicate a negative response by endless stalling. Although you must arrive with patience and not be aggressive, you must also set a realistic time frame. If you can't get a solid yes or if you experience repeated delaying tactics, take this as a signal that the parties with whom you are negotiating aren't interested. Also get all commitments on paper with a minimum of ambiguity, such as targeted dates for the next stage of negotiations. If you can't get anything of substance in writing, this is the time to put negotiations on ice.

When you go to India, bring business cards -- lots of them! They're your passport to get past the clerk who guards the room of an important government official and the receptionist who controls access to anyone highly placed in the private sector. Be polite to these people: They have more clout than you realize. Also bring some of your business letterheads. As for appropriate clothing, business women should dress for "business" and wear a conservative skirt, dress, or suit to meetings. Power clothes do give women power and respect in India. Men can be casual and even get away without a suit jacket, although evening events may require a jacket and tie.

Americans, in particular, should speak slowly because many Indians find it difficult to understand American English, especially on the phone. You should use the phone the first morning you arrive to reconfirm all your appointments, especially appointments with members of the government. Spell out your name and the name of your firm if you must leave a message to anyone. Also, ask the person with whom you are speaking to repeat your message back to you. This is equally important when you leave messages for people at your hotel.

Always call ahead. Never just show up for an assumed meeting. Last minute changes can occur and often faxes sent between your home office and India are not received and messages left at hotels can be easily misunderstood. Because of stringent security, entry into some companies and into ministries or any government building housing the offices of senior officials is usually prohibited unless your name appears on an appointment list or is cleared with the clerk or secretary.

Be prompt for appointments, but don't be surprised if you end up waiting to see ministers or senior government bureaucrats. Also don't be surprised if other people are in the room when you are ushered in to conduct your business. Often they are also waiting for their moment with the official. You may have to wait your turn, or your meeting may take precedence. Don't attach any significance to this situation. Expect tea or coffee; relax and enjoy it. If you expect to launch immediately into your reason for sitting in the room, you will end up frustrated. Also expect frequent interruptions.

If your meeting is with a woman, don't offer your hand to her unless she extends hers to you. Many Indian women tend to follow the custom that governs their religion. A Hindu woman may hold her hands together in the traditional "namaste" greeting, which you should do in return. A Muslim woman may just nod and say hello. But don't think that these forms of reserve translate into limited business authority. Many women in India have considerable power in the private and government sectors.

When you discuss yourself and your business needs, speak with a comfortable yet quiet authority. American men are often considered aggressive, so don't come on strong. Present yourself as a professional who is respectful of the person sitting across from you. In general, most first meetings in India are "feelers" during which the establishment of rapport or just the opportunity to connect a face and personality to a name is the primary agenda; don't hope for much more. This first personal encounter is, however, invaluable in the long term. Decisions are rarely made before a face-to-face meeting. This is not a country where you clinch a deal over the phone with someone who hasn't met you.

It's also unwise to criticize India when you are with Indian business associates. The elevator you take or the stairwell that you climb to an office may be filthy, but keep the observation to yourself. India is proud and sensitive about foreigners' critical comparisons. Tact will score you points.

During meetings, take notes. Then provide a written summation of what has been agreed and what still needs to be discussed and resolved. This is one good reason to take letterheads with you. These summations will be useful if your meetings ultimately lead to a memorandum of understanding (MOU) prepared by the associates with whom you want to do business. They become an invaluable source of reference and help assure that the MOU accurately reflects any verbal agreement.

Many foreigners doing business in India have also discovered that casual discussions held during a game of golf, after tennis, or over lunch or dinner have a winning effect. Whom you know in the business and government hierarchy is part of the game, how well you get along will make the difference, and gaining trust helps seal the deal.

Amenities for Business Travelers

Most luxury hotels in India's major cities have special floors designed for business travelers. The Hyatt and the New Delhi Hilton in Delhi and many of the Taj and Welcomgroup Sheraton properties throughout the country have floors that include business-oriented facilities. The guest rooms on many of these floors also have voice-mail, faxes, and computer hookups. Many luxury hotels also have E-mail and access to the Internet.

Some of these hotels, including the Oberoi chain (which doesn't have designated business floors), have private dining rooms that are perfect for day long meetings or discreet business luncheons or dinners. If you think you will need specific business amenities, find out what facilities are provided before you book a hotel. Room classifications in a hotel can also be confusing. Be sure that you understand the differences and, especially, the difference in price.

Private fax and computer services are also available in nearly every city. The prices are often more competitive than those at hotels, but your hotel may provide more reliable service. When you send a fax, make certain that you receive a transmission record and that it indicates that the fax went through without an error. Many fax facilities charge for unsuccessful transmissions and insist that the error message is wrong: Don't believe this.

Special Attention for Women Travelers

Luxury hotels in metropolitan cities also understand the concerns and special needs of the female business traveler. Women are told the name of the party who is calling before any phone call is directed to the room. Women traveling alone are often given rooms close to the elevator so that they don't have to walk down a dark corridor in case of a momentary power outage. If this isn't your preference, advise the hotel in advance. Some chains also have a person from the guest relations office check with each female guest who is on her own to be certain that she feels comfortable and to let her know that the hotel is aware that she is by herself in a room. This special attention is not a result of justifiable fear for her safety; it is offered as an extension of Eastern courtesy.

by Kathleen Cox

Kathleen Cox is the author of Fodor's The Himalayan Countries and has written about the subcontinent for numerous American and Indian publications including Travel and Leisure, Harper's Bazaar, Vogue, the Wall Street Journal, the Los Angeles Times, and the Times of India.