7 Steps to Successful Negotiation in India

Michal Zieba


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In some cultures negotiation is considered a social ceremony with its own particular protocol. Elements such as venue, climate, hospitality and courtesy during the meeting are as important as the negotiation goal itself. Such an approach is often characteristic of Oriental and Latin–American cultures. The majority of other cultures are less attached to the negotiation context/environment and more focused on substantive and tangible aspects of negotiation. This more pragmatic approach manifests itself in emphasising the role of the formal written contract.

India is a country where creating a good relationship between counterparts and building mutual trust and respect are important contributors to the business relationship. Indians judge what is appropriate with reference to desha (place), kaal (time), and paatra (person). Indians may adopt a different approach to negotiation depending on whether they negotiate with foreigners or within internal societies, groups or organisations. They may be cooperative and helpful to internal members while being competitive, dominant and manipulative when dealing with external counterparts.

1. Negotiation goal

For many nations the purpose of negotiation is a substantive outcome and material gain; for others what counts is the relationship. You should be prepared to invest in and focus on relationship when negotiating in India. Trust is a ‘must’ if you want to establish a business partnership successfully. If you plan your business in India, consider investing a lot of time in the pre-negotiation phase. Like in China, the goal of negotiation is not a signed contract - therefore any unexpected circumstances, whenever they arise, are resolved through the relationship. The fact that you have signed a contract means that it is a beginning of relationship. Trust is the foundation of the contract. Examples of other relationship-focused countries are China, Argentina, and Mexico and it may be much easier for representatives of these cultures to deal with the Indians.

2. Negotiation attitude

The final negotiation outcome is influenced by two basic attitudes. Negotiation may be seen as either:

a competition/conflict in which one side wins and the other loses, or
a creative approach based on a win-win solution in which deal-making is seen as a collaborative and problem-solving process.

Indians usually approach negotiation in a collaborative way when negotiating with representatives of their own culture and in a more competitive way when negotiating with foreigners. Once trust is established between Indian a foreign counterpart the negotiation becomes more collaborative. Be aware of the fact that haggling is a part of Indian negotiation culture and even in a collaborative negotiation you should have your concession strategy well planned and be prepared for a number of concessions before you reach an agreement.

3. Women in business

India has the world’s largest number of professionally qualified woman. Even so, their social, political and professional positions are weaker than those of men.

Usually in large cities, oriented around business with Western cultures, men and women will offer to shake hands with foreign business people. Western women should not offer to shake hands with an Indian man, rather wait for him to initiate contact. Each ethnic and religious group has its own traditions and it is often safer to let the other side take the initiative. Most Hindus do not tolerate contact between men and women in public. It is acceptable for a man to shake another man’s hand and for a woman to shake another woman’s hand. Physical public contact between man and women is strictly prohibited in Muslim cultures and if a religious Muslim male is touched by a woman, he can not pray unless he ritually cleanses himself. Conservative dress is the norm for both men and women in Indian business culture. Women should avoid garish colours and keep their upper arms, legs, back and chest covered all the time. Wearing leather may be considered offensive.

4. Communication style

In a direct communication style environment such as North America, the meaning of words is transparent; what is said conveys the exact meaning. When we negotiate with counterparts who prefer indirect communication, we need to read between the lines to determine the true meaning hidden “behind” the words - we need to analyse the context. Indian negotiators are more indirect than Americans or Germans but less so than Chinese or Japanese. It is unusual to hear a direct “no”. It is more likely to hear “it is difficult” which really means ‘impossible’.

5. Time perception

Some people view time as limited and something to be used wisely. Indians tend to devote more time than most other cultures to building a relationship and creating trust between parties. The Indians do not value time very highly, and although visitors are expected to be prompt, they may have to wait for a meeting for half an hour or longer without the courtesy of an apology. When you finally manage to get into a meeting do not be surprised if it is interrupted by phone calls or other visitors. Be prepared to reschedule the meetings. In general Indians have a polichronic vision of time, and express ‘tomorrow’ and ‘yesterday’ using exactly the same word – kal [cull].

India is a country dominated by beaurocracy and your patience is essential especially when dealing with government officials. Indian’s approach to time is similar to oriental cultures such as Japan and China: the past, present and future exist as a whole and can affect prospective decisions. On the other hand, decision-making is slower in India than, for example, in the United States, where a deal is preferred to be done quickly. It is unwise to rush Indians into making decisions. The Indians’ approach to time shouldn’t be considered as bad manners or manipulation, but rather as a part of Indian culture.

6. Negotiation style

The pace of negotiation in India is far more relaxed than in some of the Western cultures such as the USA. Indians usually do not start a meeting jumping straight to the business. Small talk and relationship building is important and remains an important part of the initial phase of negotiation.

7 Steps to Successful Negotiation in India
Figure 1 - Opening a meeting (R.D. Lewis)

Indians emanate and expect warmth and hospitality is a big part of a negotiation process.

7. Cultural orientation

Social hierarchy

Indian society is formed around the caste system. Although discrimination on the basis of caste is illegal, social standing is achieved through caste affiliation. An individual decision must be in line with tradition, family beliefs and the requirements of the social structure. Friendships are more important than expertise. It is important to build a relationship with your Indian counterparty before the negotiation starts. According to Indian tradition everyone must accept his/her place in a society or organisation and relinquish individual aspiration in the name of general interests. A strict hierarchy is customary in organisations and the opinions of senior colleagues are rarely contradicted.

Risk taking

Certain cultures are more risk-averse than others. In some countries, such as, India, France and the United Kingdom, risk avoidance is very low. This means that more innovative and creative alternatives may be pursued during negotiation. You need not focus efforts on proposing rules and activities that will reduce the risk element for the other side, but rather on increasing available benefits in any feasible way. Low risk-avoiders such as Indians require much less information, involve fewer people in the decision making and can act quickly. Unfortunately in the case of India, the decision-making process is slowed down by bureaucracy.

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The Negotiation Academy (TNA) – http://www.negotiationeurope.com - is a specialist business negotiation management consultancy headquartered in London. Committed to delivering both best and leading practice business negotiation solutions, TNA collaborates with clients to instil a world class negotiation capability. With deep industry experience in several market sectors, global resources and a proven track record, TNA is uniquely positioned to assist clients to avoid the losses associated with sub optimal negotiations. TNA has a core competency in sales negotiation training , purchasing negotiation training and executive negotiation training (mergers & acquisitions negotiation training, asset management negotiation training, corporate finance negotiation training etc.)