Doing business in India Research Paper Example | Topics and Well Written Essays - 1000 words

Doing business in India - Research Paper Example This view is changing rapidly due to the countries’ potential future. It is deemed that in the near future India will have the world’s largest market for goods, services, and development of infrastructure (Padmanand & Jain, 2000). India’s fast economic growth is due to its ready domestic market in the agricultural and service industry and its appealing demographic trend. The Indian government is also taking measures open up the country to foreign investment (Manian, 2007). The Indian Market The major barrier in penetrating the Indian economic barrier is cultural disparity. The chances of success are improved by understanding the influence of Hinduism and the Indians cultural norms. It is fundamental that investors study some of the cultural facts because such facts influence business in India. India’s official language is Hindu though the international language for commerce is English. Investors also need to understand that India is a hierarchical country (Bose, 2009). The legacy of the caste system influences attitudes towards business. The boss has the final word and cannot be questioned whether his instructions are correct or not. He cannot also been seen doing menial jobs such as making his own coffee or arranging chairs in a boardroom. His instructions are followed to the latter and micro- management works. This approach makes it necessary for potential investors to liaise with individuals with a final say over decision-making. Investors should not overlook the importance of etiquette in India. Using a Namaste handshake is a sign that one understands the Indian culture. During the first meeting, business cards are exchanged. It is advisable to have it translated to Hindi. Enhancing relationships is imperative because negotiations can be slow if trust is not established. Understanding cross-cultural divergences is a bonus in doing business in India (Business standard India 2010). The business law in India offers employees several protections. Foreign employees are required to present visas and Amaritt for such protection (Millar, 2006). Attorneys in India are allowed to practice across the states and most of the legal regulations are consistent across states. Most court cases drag for decades (Makar, 2008). Additionally, arbitration is preferred in solving disputes. The judicial system in India is poorly institutionalized and highly corrupt. Judicial procedures are expensive and influenced by politics. There is a high deficient in protection of property rights. The cost of licensing is very expensive and starting a business can take up to one month. The main source of employment in India is the unskilled informal sector, which is inefficient. The government controls pricing of commodities and this has seen the weakening of the rupee. Foreign participation in India’s economy is impeded by the dominance of the government in the financial sector. The government has also stripped down the citizensâ€℠¢ right in purchasing from low cost multinational stores. Excessive regulation by the Indian government has impeded economic growth (Manian, 2007). India’s economy after independence was the â€Å"socialist mixed model† the government controlled both the private and public sectors output, prices and licensing (Schmidt, 1991). Suppliers are unable to benefit from monopolies as tariffs for electricity consumption are fixed. The BIS: Bureau of Indian Standards set quality standards for products for consumer protection. In 1895,