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3 Ways to Kill a Deal in India

Sometimes cultural barriers can undo any multimillion dollar deal. Make sure the barrier isn't you.
November 17, 2008

For an American, visiting India can be a clash of expectations and images. Staring out a cab window in New Delhi, one might see a Bank of America sign and a KFC in the background; in the foreground, several cows roam a street clogged with cars driving as if on a race track. Everything looks familiar, and not at all.

So it's easy to see why an American entrepreneur, if they haven't often been abroad, might breathe a sigh of relief once they meet with an Indian vendor, venture capital or some other potential partner, and think: Back to the familiarity of the business world, that lovely place I call home.

But you're not home, and it's important to remember that if you act like you are, you may wind up coming off as that ugly American stereotype when that's your least intention. To avoid that, consider these suggestions from entrepreneurs and experts in India-American relations.

The Deal-Breaker: Rushing the business transaction
"India is an ancient culture that's been around for 5,000 years," says Gunjan Bagla, a consultant who owns Amritt Ventures, a management consultancy firm for Western businesses that want to trade with India, and the author of Doing Business in 21st Century India. "Relationships here are based on trust. It takes an investment of time to establish a relationship, and it's that way because it's been that way for thousands of years."

That's how it goes whether you're in New Delhi with 11 million residents or a smaller but still cosmopolitan city like Navi Mumbai, which has just over a million people.

During your first visit, Bagla says that while you may be itching to make a deal, one of the first questions you may hear is, 'When will you be coming back?' And while you may be tempted to say, 'Let's make a deal, and I'll be back as soon as you want,' that's not what an Indian entrepreneur wants to hear. He just wants to know when you'll be back. A deal can be worked out later, maybe.

Bagla offers a cautionary tale of one of his clients who was a CEO and met with some Indian entrepreneurs over two visits, but for the third trip, he sent a 23-year-old junior employee in his place, and the deal fell apart. It sent the message that the American CEO wasn't serious about India. And Americans should be serious about India. America is India's largest trading partner, and its economy is an emerging global powerhouse.

The Deal-Breaker: Not taking into account the religion, region or background of your counterpart
India has 23 languages and half a dozen major religions, including Hinduism, Christianity, Buddhism, Jainism and Sikhism.

"You must customize your approach," Bagla says. "A Punjabi-speaking Sikh machine shop owner in Delhi may behave very differently from a Gujarati-speaking vegetarian Jain in Mumbai. In that sense, India is like Europe. You wouldn't do business in Sweden the same way as you would in Croatia, would you?"

The Deal-Breaker: Missing the social nuances
Business people in India, as a general rule, don't like to say no. As S. Elizabeth Foster, a partner at the law firm of Luce, Forward, Hamilton & Scripps in San Diego, who often does business in India, says, "You may think the business person across the table is conceding your point; he or she may just be exercising politeness while thinking it over or even disagreeing with you."

That can make things tricky. You might think you're still negotiating and have a shot at making a deal when--well, not so much. Or on the other hand, maybe you are negotiating.

Or you might fall into the trap of poking fun at a passerby who has a shaggy beard tied around his waist. That would likely mean that he's a devout follower of Sikhism, and for all you know, you've just insulted some family members or friends of your new business colleague.

"India," Bagla says, "is all about nuance."


Some Tips for Getting By
Since many Indians are proficient in English, you need not worry about the language barrier. But here are additional things to consider when doing business in India: