Finding business partners and building relationships in India

In Australia’s International Business Survey for 2016, a significant number of respondents noted that having an Australian (75 per cent) or overseas (60 per cent) employee with cross cultural or language skills was important or very important to business success in India. However, it should be noted that India offers the benefit of higher English literacy than many of its Asian neighbours.

Young Indian entrepreneurs are blessed with a very large domestic consumer market and are less enthusiastic about partnering with foreign firms. With the growth
of successful start-up firms in India, smaller companies tend to be more reluctant to enter into partnerships,
and can demand higher-priced and higher-value deals.
In the absence of exceptionally high quality and high returns from partnerships, they might prefer to grow independently. Australian businesses that offer innovative technology or expertise may fare better when seeking Indian partners, particularly in fields currently heavily subsidised or funded by the Government, such as solar power, agribusiness, pharmaceuticals, aviation technology and transport infrastructure. On the other hand, major, well-established Indian corporations, including Tata and Reliance, are looking to outsource their research and innovation efforts to foreign companies in the hope that this will improve their global competitiveness. Given their size and stability, companies such as these can provide some measure of trust and confidence to Australian companies that deal with them. In these cases, however, it is imperative to include a clause in contracts that establishes which company owns the IP rights for the product or the innovation process.

The language and cultural barriers that do exist can be overcome by spending extensive time in India and investing time and effort into building relationships with business and government contacts. The strength of your business relationships can determine many aspects of commercial life, including gaining credit, procurement and contracting, as well as the timeliness of bureaucratic processes. Investing in relationships often involves large amounts of ‘face-to-face’ time with a person of appropriate seniority, with a strong emphasis on building trust and proving loyalty within the relationship. Australian businesses should also explicitly consider the impact of age, gender, educational and marital status on the formation of personal and commercial relationships in India. For example, younger people are often excluded from decision-making processes in India and are expected to defer in language and attitude to older people.

This is changing somewhat as smart, educated young Indians – who are more representative of the consumer market than older Indians – begin joining the workforce. When establishing relationships, remember that if it is a business contact worth pursuing, the people you are dealing with are likely to be evaluating you and your business as well. Expect that your business relationships will have a reciprocal nature and that your contact will want to know what you can do for them and whether they can benefit from your networks in Australia. Be open about what you are willing and able to do and what you cannot do for them

Want to learn more? Explore our other India information categories or download the India Country Starter Pack.