The Insider’s Guide to Doing Business in New Delhi

New Delhi delights but it can also confound so Writer Carolyn O’Donnell offers an introduction to getting work done within India’s complex culture.

Patience is a must for doing business in India. First because most things take longer than you think, and secondly because everything is based on relationships – relationships which take time to develop.

“The system doesn’t work,” a senior Indian civil servant overseeing the finances of a chunk of the subcontinent said, ‘so getting things done revolves around the people you know.”

India is a friendly place – strangers chat wherever you go – but efficiency and organization are not its hallmarks. Except perhaps in some aspects of business where margins are tight and negotiations are tough. Indian businessmen will never be happy until they feel they are getting value for their money. With more than a billion people, this incredibly diverse and at times chaotic country is a jostling hubbub of opportunities, but it’s not always an easy place in which to operate.

New Delhi is India’s second-largest city with a population of around 17 million. And the seat of government for the largest democracy in the world. Doing business in India could well mean spending some time in the capital, so fortunately there are good choices of accommodation for the business traveler who wants comfort as well as an environment conducive to getting things done.

A former diplomat now a businessman based in New Delhi told me: “Personal relationships are a key factor in successful business. Parachuting people in and out doesn’t work – companies need to put someone in the country.” It’s a very competitive environment, he added, and foreigners are at a disadvantage competing against Indians.

However once those relationships are in place, then you can get on with the job. A fashion executive on a business trip to audit factories said she had been dealing with the same people for the past five years. She changed companies and couldn’t tell anyone, “but then I arrived at the factories again and it was business as usual”.

One concept worth considering is that of jugaad, a Hindi word that means overcoming constraints by improvising solutions from limited resources. In other words, making do with what you’ve got. It’s an approach that entrepreneurs are using in developing markets, but “frugal innovation” has also gained credence in post-downturn corporate America.

According to a report by Navi Radjou, Jaideep Prabhu, and Simone Ahuja on the Harvard Business Review website, jugaad innovators are effective because they are cheap, fast and take into account that their target market may not be high earners, but they are high yearners. Essentially they use the infrastructure available. For example, in India some 870 million people have cellphones, but 600 million do not have bank accounts. The adaptable jugaad mindset is useful for connecting with underdeveloped communities in India.

The tax regime takes time to understand too. I was told a recent deal by a large multinational telecoms company incurred an unexpected $2million tax bill. “It’s a quagmire of rules and regulations inherited from the British and perfected by Indians. It takes a long time for any deal to come to fruition,” a businessman who has been based in New Delhi for a decade said. To be successful, people needed well-resourced companies behind them, he added, with the ability to play a long game. And of course, lots of patience.