Introduction

Over the past few decades, India’s economy has been expanding and developing new expertise within many sectors, particularly high-technology and pharmaceuticals, as well as in the way Indians do business. This growth has occurred over a relatively short period, and not without some unevenness, but Indians take pride in their country’s accomplishments, and it is important to recognize this when forging a business relationship with them.

The diversity among businesses is considerable, with some following traditional models and some adopting Western practices. The corporate sector tends to be quite Westernized, while family-owned and government-owned companies are often more traditional. When doing business outside of the major cities and business centers, be prepared for people to insist on doing things their way.

Goal of Negotiations

Indian negotiators value solid relationships. The process of building a relationship that is sound from a business point of view, but is also open and comfortable, can be a long one. Although your counterparts will probably want to cultivate a friendly relationship, they will also be concerned about shared business goals and your compatibility as a business partner.

Some Indian businesspeople are willing to conduct business with people they know only briefly. They will, however, expect to develop a stronger relationship as the two parties continue to work together. Other negotiators may insist on establishing a solid relationship before engaging in serious business together.

Indians are generally interested in long-term relationships. Always take time for relationship building before introducing serious business talk. Whether a business is family-owned or not, questions about your counterpart’s family will always be appreciated.

Attitude

Indian negotiators generally operate with a win/win attitude. Both sides are seen as responsible for reaching a mutually beneficial agreement, though the buyer is seen as having an advantage. If you are trying to sell something to an Indian company, you may have to be willing to negotiate on their terms. However, if you are the buyer, your Indian counterparts may be more amenable to doing things your way.

Some Indian negotiators may slip into what seems like a win/lose attitude. If this happens, it is often helpful to redirect talks toward mutual benefits. In the case of a dispute, reiterate your desire to enter into a friendly, long-term relationship and show that you are willing to compromise. It can also be helpful to use an intermediary to help find a resolution to the problem. This person could be a lawyer or another businessperson who is acceptable to both parties. Another option is for the two team leaders to meet privately to negotiate a compromise and present it to the group once it has been agreed upon.

It is important to contribute to a sense of cooperation and good will throughout negotiations. Don’t offer everything at once; hold back some items to throw in at strategic times. Don’t frame them as concessions, rather as a desire to contribute to the relationship.

Personal Style

Do maintain a level of courtesy and formality even in an honest, open relationship. Although Indian businesspeople require a friendly relationship in order to do business with someone, they also value respect and courtesy.

Treat anyone who is older than you with additional respect, especially if they hold senior positions in the company. Address colleagues by their last name or, if they do not use a last name, with a title and their first name. Do not assume a first-name basis unless it is offered.

Indian business culture is constantly changing. You may find that large corporations or younger executives are more relaxed. Pay close attention to your counterparts’ behavior so that you can follow suit and conduct yourself in a way that is considered appropriate for a particular company.

Communication Style

Indians can be tough negotiators. They usually have strict agendas and well-thought-out business goals. However, they may not reveal their plans to you. They are often content to let you do the talking, disclosing only as much information as necessary.

Indians are very practiced at the art of flattery, and they may be reluctant to communicate negative feelings and thoughts. Negotiators may tell you what you want to hear rather than the truth. Be cautious when negotiating and make sure that you have all agreements in writing. When you have negative feedback to share, make sure to smile when you share it, and include a lot of positive feedback as well.

Be aware that there are some businesspeople in India who, in their eagerness to close a deal with a foreign business counterpart, make promises that cannot be fulfilled, such as unrealistic deadlines or costs. Deceptive tactics such as lying, misrepresenting an item’s value, or feigning interest are common. Be on your guard and insist on open, transparent negotiations. If you suspect your counterparts of using deception, stay calm and attempt to resolve the situation diplomatically.

It is important to remain honest and open throughout negotiations in order to maintain a sense of trust between the two parties. Be careful when addressing senior Indian counterparts. If you must question them or discuss a sensitive issue, be sure to do so via a team member of comparable rank.

Time Sensitivity

Indians have a fluid sense of time, and negotiations can take a long time. Understand that many Indians either live in or were reared in rural areas where time moves more slowly than in urban centers. Realize that your counterparts’ time consciousness is cultural and try to be flexible and patient.

Indian negotiators can be meticulous when working out a business deal. Their focus on details often causes negotiations to be drawn out. In addition, they usually devote a considerable amount of time to relationship building. Don’t rush your Indian counterparts; for them, these two elements are crucial to the success of the deal. Rushing them could have a negative impact on the relationship and on negotiations.

Deadlines are often seen as flexible, even though specific dates may be set out in a contract. It is best to take this into consideration and build extra time into the productivity schedule.

Being punctual for appointments is becoming the norm in the Indian business world. Although government offices have a reputation for procrastination, the business culture is learning to keep up with international business customs in order to increase investment opportunities with foreign firms.

Emotionalism

Indians are particularly sensitive about their pride. Be cautious to treat your business counterparts with respect and courtesy throughout negotiations. Causing them to lose face can be disastrous for negotiations. When one person on the team is insulted, the entire team may take offense; this can put negotiations seriously at risk. If you must confront someone on the Indian team, do so in private and as calmly as possible.

In general, Indians prefer to do business with people who are courteous, polite, and who genuinely like them. Although these feelings will not affect their determination to negotiate an edge for their side, they can damage the business relationship and negotiations if your behavior is not friendly enough.

Indians often use emotional techniques such as attitudinal bargaining, grimacing, attempting to make you feel guilty, or asking for concessions on the basis of the relationship.

Risk Taking

Indian negotiators are careful to examine every detail of a business deal before coming to a decision. Once they have a full understanding of the situation, they are often open to taking risks. Providing a wealth of information and being patient through the decision-making process may turn the odds in your favor when presenting a risky proposal.

Keep in mind that decision makers usually look at specific situations rather than universal principles. Personal feelings, experiences, and even religious factors can affect decision-making, and it may be helpful to employ all of these when trying to persuade a business counterpart to accept your proposal.

Team Organization

Indian business culture is predominantly hierarchical, though different sectors may follow slightly different models. In family-run businesses, decisions are almost always made by the heads of the family and often in closed quarters, such as a family meal. The decision will then be delivered unanimously at a meeting with the company’s business counterparts.

In the corporate sector, decisions are also generally made by senior executives. However, as the economy grows and education becomes more widespread, middle managers are demanding more responsibility and authority. Competition can be tough, and many companies are evolving to meet the needs of the new business climate, so you may find that junior associates have more authority than they traditionally did.

Many Indian businesses have dominant shareholders. It is important to make sure that they are consulted if they have a final say in decisions. Otherwise, you may find that negotiations fall through at a late stage due to lack of shareholder support.

Agreement-Building Process

It is important to iron out general details and goals of the business deal before proceeding to specifics. It is not uncommon for an international company and an Indian company to have conflicting long-term goals that can destabilize the partnership. Once the long-term goals are discussed and seen as compatible, it is safe to go on to work out the present business deal.

Indians negotiators usually negotiate in a systematic way, dealing with one issue at a time. They prefer to reach an agreement over one issue before moving on to the next. Be sure to come into negotiations with a clear idea of what you want to accomplish, as well as a list of points that you want to negotiate in order of importance. Keep in mind that the main purpose of this list is to keep you organized; be flexible and let your Indian counterparts have a say as well.

Agreement Form

Contracts tend to be solid but not overly specific. Oral agreements are usually made prior to signing a contract, and Indian negotiators consider these binding. It is still important to put agreements in writing and have both parties sign so that the agreement is legally enforceable.

Your counterparts’ signature is not only important from a legal standpoint; it is also a sign of their commitment to the business deal. Contracts are enforceable in India, but the process can be time-consuming. It is important to maintain frequent contact with your counterparts after the contract is signed to ensure a continuing relationship. The relationship is your greatest security that your counterparts will keep their side of the bargain. Be aware that many Indian businesspeople see contracts as flexible and may request to change the terms after the document is signed.

Always check with a lawyer before signing a contract. You should not bring your lawyer to a meeting, though; this may be seen as a sign that your do not trust your counterparts.

The assessments detailed in this article are intended for informational purposes only. They reflect typical attitudes within a given country or culture, and are not intended to describe any specific individual or business. World Trade Press is not responsible for any action taken on the basis of the information contained herein.

World Trade Press would like to acknowledge the research of Jeswald W. Salacuse (“Ten Ways That Culture Affects Negotiating Style: Some Survey Results,” Negotiation Journal, July 1998, Plenum Publishing Corporation) as the basis, with modifications, for the assessment categories described in this article.