Doing Business In India
India: the second fastest growing market in Asia
The Indian market with its one billion plus population, presents lucrative and diverse opportunities for U.S. exporters with the right products, services, and commitment. India’s requirements for equipments and services for major sectors such as energy, environmental, healthcare, high-tech, infrastructure, transportation, and defense will exceed tens of billions of dollars in the mid-term as the Indian economy further globalizes and expands. India’s GDP, growing at 8.7% (for 2007-08), makes it one of the fastest growing economies in the world and the second fastest in Asia. India has potential for a sustained growth of 8-10% for the next couple of years. Now is the time for U.S. companies to enter the rising Indian market.
For more information, please consult the complete Country Commercial Guide for India and the DoingBusiness.org website for information regarding the challenges in India.
Brief Profile & Key Economic Indicators
 | Official Name: Republic of India |
| Location: Southern Asia, bordering the Arabian Sea and the Bay of Bengal, between Burma and Pakistan |
| Population: 1.13 billion |
| Languages: Hindi (national language primary tongue of 30% of population); English enjoys associate status but is the most important language for national, political, and commercial communications |
| Currency: Indian Rupee (Rs) |
| Capital City: New Delhi |
| Financial Center: Mumbai (formerly known as Bombay) |
| GDP: $1.16 trillion |
| Per Capita (PPP): $4,139 (2007-08) |
| Total Trade (2007): $41.6 billion |
| U.S. Exports to India (2007): $17.5 billion, a 75 percent increase from the previous year |
| Imports from India (2007): $24.1 billion, a 10 percent increase from the previous year |
| is the world's second largest small car market |
| is one of only three countries that makes its own supercomputers |
| is the fourth largest economy in the world (measured in terms of purchasing power parity) |
| is one of six countries that launches its own satellites |
| 100 of the Fortune 500 have R & D facilities in India |
| has the second largest group of software developers after the U.S. |
| lists 6,600 companies on the Bombay Stock Exchange; only the NYSE has more |
| is the world's largest producer of milk, and second largest producer of food, including fruits and vegetables |
| sends more students to the U.S. colleges than any other country in the world. In 2007, over 84,000 Indian students enrolled in the U.S. |
| Indian pharmaceutical industry is the world's second largest after China |
Indian Heritage - Concepts & Values to Know
In a diverse and complex country like India, it’s difficult to impart generic conclusions that could be used by those wanting to do business here. Regionalism, religion, language and caste are all factors that need to be taken into account when doing business in India. Behavior, etiquette and approach are all modified depending on whom you are addressing and the context in which they are being addressed.
Unlike western societies, in India religion, fatalism and collectivism are all components of daily life and they need to be respected for a healthy and successful business relationship. Despite the traditional caste system being dismantled, remnants may still be witnessed in the Indian hierarchical structure of business practices and decision-making. There is a strong sense of tradition tied into daily business practices. Yet, signs of change are becoming more evident. Ever since the economic reforms began in 1991, India’s market is growing rapidly. With its geographical positioning in the Indian Ocean, a major international trade route, and with its rich mineral and agricultural resources, India’s economy is witnessing increased inflows of foreign investments. India is also recognized for its competitive education system and vast pool of highly skilled laborers, making it an attractive market for foreign businesses.
No matter what the industry is, foreign businesses should expect some degree of differences in business norms in India. Included below are some basic business etiquettes that the U.S. companies should follow when developing and maintaining relationship with Indian businesses.
| Do use titles to address your Indian counterparts, such as “Professor” or “Doctor”. If he/she does not have a title, use “Mr”, “Mrs”, or “Miss”. |
| Do wait for a female business colleague to initiate a greeting whether it is verbal or physical. Indian men do not generally shake hands with women out of respect. |
| Do remain polite and honest at all times in order to prove that your objectives are sincere. |
| Don't be aggressive in your business negotiations – it can be interpreted as a sign of disrespect. |
| Don't take large or expensive gifts as this may cause embarrassment. If you do take a gift make sure you present the gift with both hands. |
| Don't refuse any food or drink offered to you during business meetings as this may cause offence (sample small portions at least). In addition, it is useful to keep in mind that traditionally, and religiously, majority of Indians are vegetarians and do not drink alcohol or smoke. |
Key factors to doing business successfully in India include: finding good partners who have knowledge of the local market and procedural issues; good planning; aggressive due diligence and follow up; and patience and commitment.
The U.S. Commercial Service in India offers customized solutions to help your business enter and succeed in the Indian market. Our India-wide network of trade specialists will work one-on-one with you through every step of the exporting process, helping you to:
| Target the best markets |
| Promote your products and services to qualified buyers |
| Meet the best distributors and agents for your products and services |
Market Entry Strategy
| Finding partners and agents: New businesses must address issues of sales channels, distribution and marketing practices, pricing and labeling and protection of intellectual property. Relationships and personal meetings with the potential agents are extremely important. Due diligence is strongly recommended. |
| Geographic diversity: U.S. companies, particularly small and medium-sized enterprises, should consider approaching India’s market on a local level. Good localized information is a key to success in such a large and diverse country. U.S. Commercial Service posts in New Delhi, Mumbai, Chennai, Ahmedabad, Bangalore, Hyderabad, and Kolkata provide indispensable local information and advice and are well plugged in with local business and economic leaders. Often multiple agents are required to serve each geographic market in the country. |
| Market entry options: Options include using a subsidiary relationship, a joint venture with an Indian partner, or using a liaison, project, or branch office. |
