In addition to the size of the Indian market, the relatively low labor costs and the large pool of well-trained personnel in the technology/IT industry represent important pull factors. So why is it possible that it is more promising for startups to operate in the Indian market than for multinational corporations? The Indian market and its business practices are often subject to high dynamics, requiring companies to act flexibly and agilely. Startups, which often have more flexible structures themselves, can respond better to short-term changes than large companies. Many things are improvised and changed at the last minute in India; those who are willing to adapt their own approach have an easier time of it. In addition to flexibility, however, good, old-fashioned, careful preparation is also a crucial factor for success.
Be prepared…
Many who have already done business globally and have been active in other Asian countries expect similar structures in India as in the rest of Asia. But that's not the case! Many things work differently in India. This makes it all the more important to prepare well and develop a very clear idea of what's possible in the country. It's not without reason that even giants like Ikea, which already had access to an extensive supply chain in India, needed over 10 years to launch their first operations there.
One of the factors that has a major impact on preparation is the country's great diversity. This includes both cultural and linguistic diversity, and there are also significant differences between urban and rural areas. Depending on the business area, you may find yourself working with target groups whose work culture is virtually unchanged from that of the US and Europe. But in the next interview, you may be negotiating with very conservative interlocutors who place great importance on adhering to foreign cultural customs. Therefore, you must be prepared for who you will be working with and in what context in India.
Of course, it's also about the requirements of the Indian market. The most successful companies in India are those that engage with the market and its existing needs and develop clear objectives for their activities. Only with a clear objective is it possible to master the potential chaos. India offers many paths and thus also many opportunities for wrong turns.
How to make a deal?
This is something you'll have to think about, especially when it comes to entering into negotiations. India has been a trading nation for centuries, meaning the likelihood of encountering experienced negotiators is very high. Furthermore, the way facts are presented often differs significantly from Western European perceptions, for example, due to the country's customary flowery descriptions. For long-term cooperation, it's especially important to build relationships before entering into serious negotiations. In a context with many imponderables, the questions of whether you can trust your business partner, rely on them, and how far you can accommodate your counterpart's terms are crucial factors in whether you enter into a deal.
Ultimately, it's always about creating a win-win model for both sides. Only good personal relationships, in which the family is often involved, create an environment in which controversial views and other challenges can be addressed. Gaining such an understanding of the circumstances, etc., is of course also possible through a cooperation partner who is familiar with India. Therefore, our recommendation is:
Never walk alone!
Just as it's a good idea for startups in Germany to work in teams to ensure they have the necessary expertise on board, one should never attempt to conquer a market in India alone, without regional knowledge or local partners. India isn't self-explanatory. The growing number of Indian university graduates in Bavaria, for example, offers good potential for finding partners for one's startup's activities in India.
There are some initiatives that, like the Bavarian-Indian Centre for Business and Universities (BayIND) serve as bridge builders to India. These include the Bavarian representation in India and the German-Indian Business Forum (GIBF), which takes place once a year in Munich and, as a German-Indian Startup Connector, offers various programs for startups. Furthermore, the German Indian Startup Exchange Program (GINSEP) Consulting and events for startups interested in the Indian market. Support in India itself is provided by the "startupIndia“ Initiative and various incubation centers, which are now widespread in all major cities.
And finally, the daily business...
The – generally highly hierarchical – structures play a major role in decision-making processes in Indian companies. No matter how positive your contact person may be, their validity cannot be relied upon unless their suggestions have been approved by the highest level of the hierarchy. At the same time, the strong hierarchies in many companies prevent indirect communication and a functioning feedback culture. Since decisions made at lower levels have little impact, there is a tendency to bypass hierarchical levels in day-to-day business in order to increase efficiency. This can lead to the top level spending time dealing with various trivial details.
Especially in day-to-day business, accessibility plays a key role in communication. Many problems and questions can be resolved over the phone or via WhatsApp, meaning good accessibility is crucial for smooth processes. Concepts such as weekend vacation and regular working hours are rare.
This rather flexible construct of "time" can also be applied to the topic of punctuality. The always tense traffic situation and the general understanding of time mean that delays are the order of the day. An example of this different understanding of time is the word "kal," which can mean both "yesterday" and "tomorrow." Nevertheless, German punctuality is well known in India, and it may be expected of you, even if the Indian side does not consistently adhere to it. In any case, mobile accessibility is of great importance. It is always worth checking the day before and shortly before the appointment to see if the meeting will actually take place and whether the other party will be punctual.
With a little preparation and reliable partners, even a challenging market can be mastered. Take advantage of the opportunities India offers, especially in the rapidly growing IT sector.
