7 Things You Must Know While Doing Business in India


The seventh-largest country of the world, India, is also the fifth largest economy of the world by nominal GDP. The gigantic nation has a big area within its boundaries, which makes it rich and diverse in terms of culture, languages, market and work ethics.

The expansion of the commercial sector in the last few years has led the Indian economy to grow at a much faster pace. India now occupies 77th position in terms of ease of doing business as per the World Bank report of 2018 as compared to the 100th position in the same report of 2017.

For the last two consecutive years, India has marked its presence among the top 10 improvers in the world. In all the aspects of ease of doing business, viz. construction permits, trading across borders, starting a business, getting credit, getting electricity, enforcing contracts, India has jumped up in the rank list.

Broadly divided into four regions, north, east, west and south, India is a single unit democratically. North, west and south India provide a huge profitable market for doing business in India, whereas, east India has recently started flourishing and exploring the outer areas of the country as well as the world. Until a few years ago, the eastern part of the nation mostly survived only on tourism and tea business.

Being a culturally diverse country, work culture too differs a lot from north to south. Outwardly, one can say that north India believes in the presentation more. This essence gradually fades out as one travels southwards in India, where people are simpler and let brains speak louder.

Challenges of doing business in India: 7 things you must know

1. Importance of Networking for doing business in India

If you want to be even entertained by a customer, go to him through a reference. Networking is the most important aspect of doing business in India. The right way to keep up with this point is to start networking before actually invading the Indian market.

Digital marketing using LinkedIn, FaceBook, Instagram, webinars, email marketing, etc., to build a relatable audience can work wonders. These can turn into your prospects and finally your customers when you plan to actually conquer the Indian market.

Your success chances increase substantially if you have references to meet a higher authority. That way, you can ditch the decision-making layers (that pose a big challenge of doing business in India) and reach the top-most layer faster. In fact, you might even not need to do much of the talking. Just your reference and a brief presentation of your product might do wonders.

importance of networking for doing business in India

2. Importance of Customer Relationship

Needless to say, networking works only because of customer relationships. We would not be exaggerating if we say that half of the trades in India take place on the foundation of strong relationships, especially in north India. Conversely, in South India, relationship weighs equal to the product or service of the seller.

To strengthen relationships, sellers can wish their customers on their birthdays, anniversaries, festivals, etc. Indians love tea and bond a lot over high tea. Plan your decision-making meeting in a nice café and order your prospect’s favorite cup of tea or coffee, it might bring some luck to you.

In north India, you can also offer to have a drink and dinner together with your customers. However, in south India, you can sometimes expect your customers to invite you over a traditional lunch/dinner or veneration to show their cultural side.

challenges of doing business in india - maintaining customer relationship

3. Power Distance

Power distance is high in India. This means that there is a good gap between the haves and the have-nots, rich and poor, old and young, and higher and lower authority.

Most of the higher authority people like it when they are respected not only by their subordinates but also by their customers. It becomes even more important when you are doing business in India with government officials.

The government officials generally expect you to call them ‘Sir/Madam’ instead of their name. Officers even with lower authority have the same anticipation. Corporate culture, however, is a little easier to tackle. Calling them as ‘Mr. X or Ms. X’ would be fine. In many MNC’s, you can even address the highest authority person by his first name.

4. Layers of Decision Making as one of the challenges of doing business in India

One of the major challenges of doing business in India is that Indians rarely want to change their current vendors. Therefore, if you are approaching a prospect for the first time, be ready to hear a “we are not interested”. If you want to hit the bull’s eye in a single shot, prepare yourself with a lot of market knowledge and home-work about your prospect’s current solution.

Prepare yourself to face a lot of ignorance and rejection because of the resistant nature of the people to change. If you want to win this battle, back your product/service with a lot of advantages as compared to the current solution of your prospect.

When you are finally able to convince the first decision-making layer of the worth and significance of your product/service, you can expect your proposal to travel the next layer and then next and so on. It could be a tiring process to induce each layer of management to pass on your proposal to the next one.

If you are working with a government organization, this process might even take as long as a year or so to reach the final decision-making layer. Persistence is the only key to not giving up during the sales cycle while doing business in India. One thing that can help you sail faster through this decision-making process is strong customer relationships.

Indians do not know how to say no. If your proposal has been rejected or on the verge of rejection, the concerned person will stop taking your call or answering your emails. You then have two choices – either follow up regularly to check if something can be done to win the deal or else leave the prospect and look for other options.

decision layer as a challenge

5. Negotiation

Indians are hard bargainers and want high quality at low prices. The negotiation skill of Indians is one of the biggest challenges of doing business in India.

Especially people from the north-western part of the country are the best at it and are sometimes difficult to handle even by their own countrymen from other regions. Apparently, they are known to have negotiation skills in their blood.

This is the reason why many B2B sellers in India usually quote 10-20% higher for their products/services. They know they will have to come down a bit to meet their buyer’s negotiations. This is one way to handle this particular challenge of doing business in India.

Another technique is to be firm on your prices because your product/service is much better than the ones of your competitors and make your customers convince on this. The key factor here is to decide whether you want to sell your product in quantity or quality.

negotiation as one of the challenges of doing business in india

6. Regional Disturbances

Being a large country of 3.29 million km2, India is a mix of good, better and worse states when it comes to peace. Such a large historical country is bound to have issues within and with some of its neighbors.

With the exception of a few disturbed states like Jammu and Kashmir and some states of north-eastern region like Arunachal Pradesh, Nagaland, Assam, etc., where it is difficult for a business to thrive, the whole nation accepts national and international trade whole-heartedly.

Some recent changes in the national law might make it easier to trade in some of the disturbed states in the future. However, currently, these states remain under the Armed Forces Special Power Act (AFSPA).

Mostly, traveling to these states is not prohibited but the tourism industry slows down during any emergency. Trading is also not forbidden but due to long struggles, the people of these states rarely have any exposure to technology and international trade.

In case if you plan to reach out to any of these states for pursuing your business, it is better to seek help from a local partner.

7. Language and Currency

There are as many as 1800+ languages in India. However, only about 150 languages are known to have a recognizable speaking population. Nevertheless, the constitution of India recognizes only 22 official languages in the country.

The common language of communication in India, nationally as well as internationally, is English. Almost everyone speaks and understands English. In fact, knowing English by someone signifies his/her intelligence in many parts of the country. Hence, the language barrier rarely exists.

However, in western and southern regions, language can play a key factor in being successful in business. Although, not knowing the local language might not cause any harm for your trade but knowing one or hiring a local partner who can help you interact with your prospects will definitely give you an edge.

Indians do like it if you can quote them price in Indian Rupee. Additionally, quotes in US Dollars are also acceptable and wouldn’t do any damage to your company.

language as one of the challenges of doing business in India


Doing business in India might be difficult. Still, this developing economy can prove to be a major breakthrough for the rising profits of your organization. With the help of an experienced B2B sales consulting firm, you can overcome all of the challenges of doing business in India.

With just a little bit of research and a few discussions with your sales consultant, you can be sure to get success for your organization in India with flying colors. Your B2B sales consultant will not only help you overcome the regional and cultural challenges but also help you get the relevant permissions and licenses to conduct business in the ever-growing Indian economy.