Business in India
Strong labor force, rich natural resources, favorable climate and an optimistic view of the world have turned India into a great place to do business. India's government seeks to defeat unemployment by all means and create favorable conditions for successful business. With decreasing taxes and mitigating trade restrictions starting a business in India is becoming quite a tempting offer. Thus, it is crucial to analyze culture characteristics that may affect business transaction in India.
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With regard to communication, the official language of India is Hindi. The diversity of India is increased by the fact that there are more than 14 major languages and 300 minor languages (“Doing Business in India”). However, throughout India people speak English, especially in the business sector. The local business culture is focused on relationships. In business, the Hindus appreciate the family atmosphere, so one should memorize the names and be ready for a lot of personal questions. Hindus are emotional enough and pay close attention to the human side of their partners. In particular, Indian entrepreneurs are very active and even aggressive. They are very good at negotiating and can easily turn the negotiation process in their own direction. One should consider this feature of Indian businessmen. For instance, to win arbitration case in India is extremely difficult and costly, but even winning it, one has to enforce the decision.
In India, there is a very tough competition everywhere, including the labor market. In spite of this, local education system is designed so that graduates receive a very narrow specialization. If one puts in front of them a task that goes beyond their world, they merely do not perform, but do not refuse at the same time. Thus, the labor force is cheap and narrowly qualified. Additionally, the best manpower is sort out a year before graduation.
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In order to start business in India, one must register with the tax authorities, open a bank account, register an account at the Central Bank of India and get a lot of different resolutions (“Doing business in india”). Moreover, even if the company is not registered in India, but has been active in this country, it is still subject to the local tax legislation. Tax consultant would be a great help, because the wording of local tax laws is ambiguous in interpretations and every state has its own taxes.
Negotiations with Hindus are usually divided into two stages. First, the parties agree verbally, and then correspond with each other (“Doing business in India”). Thus, the discussion of business issues is happening. At the outset of negotiations, it is crucial to agree on principled positions, and then about the price on paper. If not on paper, there should be no claims. In the process of cooperation, compliments and flattery work well. Hindus also do not say to a person what they think, but what he/ she wants to hear. Hindus are known for their friendliness and warmth of the soul. They never directly refuse on anything, as this may offend the partner. Legends go about improvisation and flexibility of Hindus. For instance, there is a saying that it is easier to find Hindu in three hours than three months. With regard to business dress code, men usually wear a suit and tie, and women wear saris, salvar kameez or business suits.
In conclusion, doing business in India is important, as it is one of the most rapidly developing countries. Yet, doing business in India requires specific knowledge about local culture. For instance, Indian businessmen are active and friendly, but, at the same time, aggressive. They are very good at negotiating and can easily turn the negotiation process in their own direction. The process of business legalization is also complicated, as every state has its own laws on taxes. Additionally, the wording of local tax laws is ambiguous in interpretations. Nevertheless, the entrepreneurial ability of Hindus widened after the liberalization of foreign policy. Whether it is the manufacturing sector, pharmacological or service sector, India presents a tremendous opportunity for people interested in starting or expanding a business.