What Every Foreign Business Needs to Know about Doing Business with India?
How to Do Business in India, Multinational Corporations Doing Business in India, American Businesses in India, Investing in India, Trading with India
India, the world's fastest growing free-market democracy, presents lucrative opportunities for all types of businesses - especially USA companies.
The Indian market with its one billion plus population, presents lucrative and diverse opportunities for USA Companies with the right products, services, and commitment. India’s GDP, growing at 8.7%, 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.
Does your company have an India strategy? Does your company have a plan about how to do business in India? Does your company knows what is the best way to enter India? Does your company know what corporate structure is best suited for your requirements in India? Does your company know what corporate entities are available for doing business in India? Does your company know what approvals are required before investing in India? Does your company know what kind of joint venture partner is good for your company? Does your company know what are legal requirements of doing business in India?
Steps for Foreign Investors Doing Business with India
For a foreign Investor planning to do business in India it is very important to choose a right kind of business or corporate entity which best suits its purposes and takes care of liability issues and tax planning issues. Foreign Companies planning to do business in India should and corporate structuring to save taxes to the best extent allowed by laws and international tax treaties.
It is also mandatory for foreign investors or foreign shareholders, both individuals and corporate shareholders.
There are various steps required to establish a business in India, before and after incorporation, as mentioned hereinafter.
Business Etiquettes in India
- 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.
How to Do Business in India Successfully
Key factors to doing business successfully in India include: finding right law firm which has knowledge of local laws and regulations as well as USA regulatory requirements; finding good local partners; good planning; aggressive due diligence and follow up; and patience and commitment.
How to do Business in India?
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 personal values 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.
No matter what the industry is, foreign businesses should expect some degree of differences in business norms in India.
US and Indian Corporate Compliance Programs
The US Companies or American Companies who do business overseas have to comply with the US laws regarding foreign investment including US Foreign Corrupt Practices Act.
In addition, all the Multinational Companies Doing Business in India have to comply with the corporate and other laws of India including cyber law compliance.
The cyber law mandates all companies to have an information technology security policy. This documents the architecture of the network, the roles and responsibility of employees, security parameters and authorization required for data access, among other things. Other compliances that are required include relate to retention and authentication of electronic records and security of data.
Some of the companies doing business in India are setting up voluntarily affirmative action programs.
Not complying with the US and Indian laws may result in sanctions against the company.
