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Doing business in India

All you need to know about selling to the world's second-fastest growing economy

Overview

India covers a bigger land area than Europe, and has 18 regional languages. The country is divided into 28 states – all but two of which house more than a million people. Political, economic and religious considerations vary wildly from state to state.

Nine hundred million people in India live on less than two dollars per day – so it may be hard to find buyers for luxury and high-end consumer goods. However business opportunities are manifold; the UK is currently India’s second-largest trading partner, and the UK exports more to India than any other developing country.

Key facts

Capital: New Delhi Other major cities: Kolkata, Mumbai, Kanpur, Chennai, Bengaluru, Jaipur, Nagpur, Pune Language: Hindi, English Currency: Rupee Key trade partners: US, UK

Major industries

Each state in India has its own industrial strengths. For example tractors, bikes and auto parts are essential in the Punjab, cement and ceramics are crucial in Rajasthan and minerals are integral to Chhattisgarh.

India is now a world power in several industries including IT, automotives, pharamaceuticals and agricultural produce.

India’s rapid development presents clear opportunities for British firms in a number of areas, including transport, power and construction.

Advertising and distribution

India’s broadcasting industry is booming with the introduction of satellite television, and advertisers can make real headway by running commercials on popular channels such as ZEE and Sony TV.

Other advertising streams may be less profitable; the mail service in India remains fairly slow, so avenues such as direct marketing may prove fruitless.

Given the complexities of the Indian market, it’s probably best to recruit a local advertising agency to help you promote your product. Mumbai remains the major advertising centre, so you should start by looking for a company based there.

Culture and etiquette

Although Hindi is the official national language, spoken by almost half the population, English is the language of business, so it’s sensible to expect the company you’re trading with to have a reasonable grasp.

Decades of British rule have left behind a rigid class system, manifest in a strict business hierarchy. In most Indian companies, the big boss holds all the power; rather than delegating authority, they like to do as much as possible themselves and run the firm with direct instruction. If you want to get something done, it’s best to go right to the top.

If you end up dealing with someone lower down the chain of command, you’ll need to be very clear on what you want them to do. Indian business culture is based on instruction, not initiative – staff are used to working to explicit directions.

Meetings and correspondence

The style of meetings in India can vary greatly. Some companies, seeking to copy Western business practice, insist on the sort of meetings common in Britain or Europe – very formal, with an emphasis on structure and punctuality.

However other firms – often those in rural areas or traditional industries – pursue a more laid-back approach to meetings, so be prepared for disruption and even chaos in such cases!

If you’re meeting a doctor or professor, be sure to refer to them by their title at all times; India’s educated classes are proud of their position and expect to be given respect.

Be prepared to give and receive gifts – this is a vital part of business protocol in India, and you run the risk of appearing very rude if you don’t grasp it. Just make sure any gifts you bear are not ostentatious, and you receive presents with both hands.

Customs and export documents

In most cases, you can ship goods into India without a licence, although there are exceptions – so it’s best to check with the Directorate General of Foreign Trade. Go to their website to see a list of the various contacts available.

To export to India, you need to consider various payments including basic and additional customs duty, anti-dumping duty and a customs handling fee. To see which ones apply to you, contact the UKTI’s India team.

Other things to bear in mind

In India, it is rare for a man to shake hands with a woman – so if you are dealing with a a member of the opposite sex, wait for them to initiate the greeting.

The majority of Indians avoid meat, cigarettes and alcohol – this could be extremely important if you’re taking a customer out for a meal.

Further information

The India Pakistan Trade Unit is a good place to start, and you can get loads of great information via the Indian government’s Central Board of Excise and Customs. As mentioned, the UKTI also provides excellent advice for anyone considering exporting to India.

 

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