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India: A Land of

Opportunity

SIFE School of Management Studies Team

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Case for India

Indias Tenth Five year Plan (2002-2007) estimates the creation of 100 millionjobs in the next decade in the industrial sector.

India ranked as the worlds second most favored destination for foreign directinvestment.

Liberal market reforms initiated in July, 1991 by Manmohan Singhs (CurrentPrime Minister) structural reforms in power, telecommunications, infrastructure,electronics and information technology and oil and gas.

Foreign investment in most sectors welcome except strategic sensitive sectorse.g. atomic energy and defense

Foreign equity participation raised to 100 percent in several important areas

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 andcollaborations

Indias labor force of 400 million.

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Taj Mahal, Agra

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The Golden Temple,Amritsar, Punjab

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Buddhist Monuments at Sanchi

Qutb Minar and its Monuments, Delhi

Khajuraho cavesMadhya Pradesh

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Largest Democracy in the World

Dr. Abdul Kalam Azad(The President)

Top Scientist

Dr. Manmohan Singh(The Prime Minister)

Economist

Mr. Bharu Singh Shekhawat(The Vice President)

Mr. P. Chidambram(Finance Minister)

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

Sikh hold the post of Prime Minister

http://en.wikipedia.org/wiki/Image:P_Chidambaram.jpghttp://www.microsoftkid.com/images/AJY%20WITH%20VP%20OF%20INDIA.jpg

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Macro Economic FactorsGDP $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

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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

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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

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Differences between Indian Culture & Western Culture

Basis Indian Culture Western Culture

Belief in Faith &

Luck

Strong believers Believe in hard work & efforts

Belief in Spiritualism Strong believers Believe in Materialism

Public Appearance No body exposures.Considered obscene.

Fashionable clothes the inthing

Care of Old People Sons are expected to take

care of their Parents.

Old parents are not cared for.

Respect for Women No religious ceremony is

held without wife.

Women given respect in

traditional sense

Relegated to Old Homes

Women looked as objects of

pleasure. Women are free

in every aspect

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Business Culture - India

Relationships and feelings play a larger role in decisions

in India. In general, Indians tend to take larger risks witha person whose intentions they trust. Thus, one's

credibility and trustworthiness are critical in negotiating a

deal.

Showing hospitality is part of the negotiationprocess. Often meetings start by offering

tea/coffee and snacks. It is courteous to

accept the offer.

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Business Culture - India

In general, Indians are cautious in accepting a new idea orproposal. Openness to a new idea depends not only on its quality,

but also on its source and endorsement. That is, information aboutwho else has implemented it or who has proposed it has a majorinfluence on the decision about a new idea. In making a proposal,you must include such details accordingly.

PowerPoint presentations are generally accepted tostart the discussion. It is necessary, however, tosend a more detailed proposal in advance. Often,the details of the proposal are vetted by some

middle-level executive, who will then brief thesuperior about them.

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Business Culture - India

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 asa rigid stand. It is always advisable to build some buffers in one'sinitial offer, which allow for bargaining later.

Indians usually do not express their disagreementsopenly and directly; doing so would be considereddiscourteous. Instead, when differences arise, theymay circumvent them by statements such as 'we willdiscuss this later' or 'I will have to check with othersabout this.

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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.

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Box of Sweets Chocolates

Bouquet of Flowers Household Items

Liquor, but . . . .

Gifts

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Families

Tradition

Foreign Countries Cricket

Politics & Religion

Poverty

Personal Matters

Military Spending

Topics of Conversation

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Red Birth & Fertility Wedding Dress

BindiBlue Heavens, Truth & Mercy

Black Death, Anger & Intolerance Alcohol

Sudra ( Low caste)

White Creation, Rebirth &Reincarnation

Brahmins

(High caste)

Colors

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Doing Business in India

If there ever was an example of what aheterogeneous society looks like, it is India.The differences between people due to

region, religion, language and caste make itvery difficult for anyone to impart generalobservations on the country. Behavior,etiquette and approach are all modified

depending on whom you are addressing andthe context in which you are doing businessin India.

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Hierarchy

One of the most significant cultural influences on Indian

culture is that of hierarchy. You will see this manifest in manyways 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.

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Meeting and Greeting

Handshakes are exchanged on meeting. Indians themselves use

the namaste. This is where the palms are brought together at chestlevel 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 Indians 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 Abdulwill 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.

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Building Trust

Doing business in India involves buildingrelationships and establishing trust. It isvital that a good relationship is founded

on two foundations.1) on a business level, i.e. demonstrating strong

business acumen, professionalism andqualifications and

2) at a personal level, i.e. relating to yourpartner and exhibiting the positive traits oftrustworthiness and honour.

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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 alwaysapproach and greet the most senior figure first. Neverget down to business. Meetings should always commence

with some conversation good topics of conversationinclude cricket, politics and film.

If your doing business in India involves negotiations,always bear in mind that they can be slow. If trust hasnot yet been established then concentrate efforts on building

a rapport. Indians do not base business decisions solely onstatistics, empirical data and flashy PowerPointpresentations. They use intuition, feeling and faith to guidethem. Always exercise patience, show good character andnever exhibit frustration or anger.

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Language

Different states in India each have differentofficial languages. Central government onlyrecognizes Hindi as the official language of

India. However, when doing business inIndia, English is the language ofinternational commerce.

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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.

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