The second most populous country in the world, the Republic of India has gone through an economic transformation over the past 20 years to become one of the world’s fastest developing economies. India’s long and rich history has formed a strong cultural identity amongst an extraordinarily diverse group of people. However, whilst India is modernising rapidly, it also retains many of its deep cultural values. Understanding Indian cultural, ethical and business values is vital for any organisation doing business in today’s rapidly changing Indian markets.

India in Focus

The Republic of India is the world’s second largest country in terms of population (over 1.2 billion as revealed in India’s 2011 census). India’s government is structured as a federalist, parliamentary system, with a Constitution written in 1950, shortly after it gained independence from the British in 1947. As the world’s largest democracy, India is a multi-party state, with elections held no later than at the completion of a five-year term. There are 28 states and seven union territories.

India is one of the world’s most ethnically diverse countries, with Indo-Aryan groups comprising about 74 percent of the population and Dravidian groups comprising another 24 percent of the population. Over 200 other ethnicities are officially recognised by the Indian government. The Eighth Schedule of the Indian Constitution currently recognises 22 regional languages. India’s two official languages are Hindi, spoken by less than a majority of the population, and English.

More than 80 percent of all Indians are Hindu. Another 13.5 percent of Indians are Muslim, making the country the world’s third largest Muslim population. Other religions populations prominent in India include Christian, Sikh, Buddhist, Jain, Jewish, Zoroastrian or Baha’i. Four of the world’s religions – Hinduism, Buddhism, Jainism and Sikhism – originated in India.

According to the IMF, India’s economy is now the world’s third largest GDP at approximately US$4.5 trillion as of 2011. The IMF also reports an average GDP growth of 5.8 percent for the past 20 years.

Core Cultural Values

Family

Family values are important throughout India, with privileges and obligations often defined by an individual’s position within the family. The definition of family in India is much broader than found in most of the West. It includes the entire extended family through both bloodline and marriage. Religion usually lends a further familial identity. Many Indian businesses have been traditionally run as an extension of the family model, with loyalty and longevity rewarded.

Status and Hierarchy

Traditional Indian society has been highly structured, determining one’s position throughout life. In addition to family, Indian culture has determined status through a number of other markers, including caste, class and job role as well as gender, age, marital status, parenthood and character. Perhaps not surprisingly, Indian businesses still keep many of these factors in mind in the work environment. Traditional values toward status and hierarchy can impact anything from who gets short listed for a job interview or even who will sit with whom at lunch.

Relationships

With such a strong identity surrounding status and hierarchy, it is important to understand how business relationships are established and nurtured in India. Do not be surprised if your Indian colleagues pay a lot of attention to your job title, professional qualifications, and who you know. They may also ask you a lot of personal questions, especially about your family. This all helps your Indian colleagues to place you within their framework of hierarchy and what they might expect from you.

Important Business Values

Reputation First

Indians will be very conscious of how they are treated by each other as well as by business visitors. There is an expectation that one should be treated with the level of respect they deserve due to their status or position, both in the business environment and in society as a whole. Whilst Indians do not expect outsiders to fully understand the nuances of Indian hierarchies, they do expect to be treated with dignity and the level of deference commensurate with their station in life. They will also generally go out of their way to avoid a situation that causes embarrassment or shame, and will often even deny blame if they consider it to compromise their reputation.

Relationship Building

Expect the need to establish a good working relationship before turning to quantifiable business matters. Establishing a face to face rapport with your Indian colleagues, business partners or clients cannot be recommended strongly enough. Try to keep in steady contact in between visits. Indian businesses are often comfortable with using technology such as videoconferencing, social media and Skype, so consider these options. However, do not underestimate or try to rush relationship building.

‘Yes’ Culture Challenges

Many visitors to India have voiced their frustrations when hearing ‘yes’ which then may not be followed by the expected course of action. Many cultures literally take ‘yes’ to mean ‘yes’. With other cultures, ‘yes’ can mean anything from ‘it is my intention’ to a simple desire to avoid confrontation. The problem is exacerbated when different cultures interpret ‘yes’ differently. Indians may be saying ‘yes’ but are expecting you to pick up on the context of the message, which may be something all together different. To minimise misunderstanding, try to ask for clarification if you are not sure which ‘yes’ you just heard.

‘Old’ and ‘New’ India

Organisations doing business in India should recognise that the ‘New’ India’s business revolution has changed the country, opening up global business practices that were impossible to imagine a generation ago. However, ‘New’ India’s modern business sectors are developing at a faster pace to the rest of India, where business practices and traditions have not kept pace. Many visitors to India can become frustrated with ‘Old’ India, including its continued reliance on seemingly endless bureaucratic practices and its ongoing infrastructure challenges. Patience is a must for anyone working with India, especially when dealing with the ‘Old’ India.

Do’s and Don’ts

Although most Indians will overlook small political and social faux pas, visitors doing business in India should be aware of the following pitfalls that could jeopardise their business relationship.

DO

• Show respect for people, including status, job titles and education
• Be prepared to field personal questions, including family
• Learn about general dietary rules for India’s major religions. For example, beef and pork are off the menu for nearly all Indians.
• Learn about important Indian holidays. Start with Diwali and Holi as they are great celebrations.
• You will endear yourself to many Indians if you learn a little bit about Bollywood … and cricket!

DON’T

• Discuss difficult political topics, especially to do with Pakistan or Kashmir
• Refuse gestures of hospitality, including invitations to meals or to visit local temples or other important cultural sites. These are opportunities to build business relationships and should be regarded as important as transactional business tasks
• Show frustration if things take longer than they do back home. Many Indians are more fatalistic about time related matters, including schedules and deadlines.
• Assume that modern/Westernised Indian people have the same values as you. Beneath the surface, traditional cultural values may prevail.