Indianizing a China Business (Part Two)

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Business Cultural Differences Affecting China and India

Op-Ed Commentary: Chris Devonshire-Ellis

Part Two of a Two Part Series: The Cultural Environment
Dec. 9 – As China begins to slow down, and the global supply chain shifts, India has just recorded GDP growth of 9 percent for the past quarter meaning it has overtaken China in terms of production. It is a trend that is likely to remain. As China-based businesses also start to gear up for the development of China’s domestic market, and look to the hinterlands for growth, others are also eying the India market. Exporting a business into another country is never easy, and this is especially so in the case of China and India. The countries have different administrative systems and do not necessarily agree to international conventions surrounding territories and descriptions. Then there are the immense language and written language issues. If these are not recognized, embarrassment and even criminal action can follow.

As my practice Dezan Shira & Associates has found out, care needs to be paid when replanting a subsidiary root of a business from one country to another. Not all systems or points of reference are the same. Dezan Shira & Associates first moved to establish operations in India four years ago (after 14 years extant only in China) and we found many surprising cases where what we thought we knew from a cultural perspective needed a rethink, and additional work and attention to new cultural detail. This article is designed to explain some of the practical differences in styles the China-based executive may meet when asked to look at India.

The Cultural Environment

Defining territory
For China, it is well known that Taiwan should never be omitted from any published maps of China, including those on your China website or brochures. It breaches the “One-China” policy and can have criminal repercussions. The same applies in India. The official map of India is different to the map provided by the United Nations, redrafting certain sections of Kashmir. It is a criminal offense to publish inaccurate non-Indian official maps omitting this. It may mean, for the India market, using official Indian maps of the territory and not relying on common international versions.

Language
China
China possesses two types of written characters, simplified and traditional. Simplified is used in Mainland China, traditional in Hong Kong, Taiwan, and by most of the overseas Chinese diaspora. The difference derives from when Mao Zedong revolutionized the Chinese language on the mainland in 1954 to improve literacy levels. Other territories at the time not under mainland control or with large Chinese diasporas resisted the use of the simpler version. China also has several officially recognized regional languages – there are seven distinct languages on a standard Chinese banknote for example – many regional dialects, and even historical differences in the Romanization of the Chinese language (Beijing vs. Peking for example). Care needs to be paid to which market segment is to be addressed.

India
Hindi in the Devanagari script is the official first language of India, though the constitution also recognizes English. Indian states are additionally free to further recognize regional languages, leaving each state free to, via its legislature, adopt Hindi or any language used in its territory as its official language or languages. Examples include include Kokborok in Tripura; Mizo in Mizoram; Khasi, Garo, and Jaintia in Meghalaya; and French in Pondicherry. Altogether, close to 50 official languages are in common usage on a regional basis across the country. The Romanization of Devanagari has also been erratic, with certain cities especially being interchangeable in names: Calcutta (Kolkata), Bengalaru (Bangalore), Puducherry (Pondicherry) and Bombay (Mumbai).

A striking example of the script differences can be seen in this Dezan Shira & Associates advert promoting the firm’s India practice from a China-India cross border perspective.

The use of English, Chinese and Devanagari get the message across – but required three nationalities of staff in both China and India to create.

Religion
Mao famously declared, “Religion is poison!” to the Dalai Lama, and still today the country is officially atheist. While Buddhism is making a (well monitored) comeback, the pragmatism of the Chinese sees them pray more to gods of money and wealth than for wisdom and spiritual enlightenment. India, meanwhile, is multi-religious, with Hinduism dominating, although most Indian cities have substantial Muslim populations also. Muslims also predominate in several business sectors, and it is common to be in meetings with Muslim businessmen. As in all religions, some are more devout than others, and Indians with a permanent bruise on their foreheads mark a devout follower of the faith. Business meetings with Muslims may be interrupted at certain times of the day to pray (usually a small room set aside for the purpose) and your meeting may be delayed for 15 minutes while the rituals take place, only to restart at exactly the conversational point they were temporarily postponed. Sikhs are found to the North-West; resplendent in their turbans and moustaches, Sikhism is a blend of Hinduism and Muslim, and do not practice the nationwide ingrained caste system, which still pervades in Indian culture today. Other than usual pleasantries, it is probably a good idea to avoid much in-depth discussion about religion unless you are well versed in the subject. Tensions can rise to the surface quickly and it is best a subject handled delicately. That said, it is a major and colorful part of the multi diversity of Indian life and adds much to the color of the country, from Elephant Gods to revered Cobras to the Prophet Mohammed, India’s religious mix in its society is never very far away.

Food
There is an old saying about Guangdong Province in China: “The people will eat everything with legs except a table, and anything with wings except an aircraft.” Chinese cuisine is famous for its diversity and wide range of ingredients used. Some may be off-putting to the uninitiated – steamed silkworms for example – but generally, the Chinese have very liberal palates and are experimental. If it tastes good, it’s eaten. But then again, large parts of China are strongly Muslim, and pork, so much a national staple, will not be found in many central or western provinces. Buddhism too has had an impact, and many Chinese are essentially vegetarian as a result. However, that can be vegetarian with a twist – many vegetarian dishes are prepared using animal fat. The term is rather loosely applied in China.

Like China, Indian cuisine is one of the great cuisines of the world; however Indian religious sensibilities dictate a far more serious approach to the preparation and consuming of food than that in China. Food prepared with animal fat or even prepared in the same kitchen as non-appropriate items can be a serious matter, and the Jain population – who are prevalent in the business community – will not eat any food that may have disturbed a non-vegetarian life form, including root vegetables. I recall a packed Air China 757 flight from Delhi to Beijing where 75 percent of the passengers refused all food (seven hours) because Air China had not considered the mass needs of a vegetarian manifest. Such considerations need to be taken into account when entertaining Indian clients or businessmen. It is a sensible matter of courtesy to ask beforehand. Additionally, the 5,000 years of Ayurvedic medicinal culture, coupled with religion, has ingrained a strict sense of proprietary into what is means to be really vegetarian.

Chinese restaurants in India are quite common, a legacy of the coolies often brought over by the British in the colonial days. Most of these restaurants therefore tend to be based on southern Chinese cuisine, being Hakka or Fukien in origin. Indian restaurants in China are more uncommon, but are increasing in numbers, especially in the larger cities. Generally speaking, Indian curries get hotter the further north you go, while to the southeast and in cities such as Chennai, the food becomes not dissimilar to Thai cuisine with the use of coconuts predominating.

Food, drinks and hygiene in general
Indian food is as diverse as the nation is large, and although the ubiquitous curry remains king, there is such a variety that you could spend a lifetime here and not try the same thing twice. Generally speaking, the further north, the hotter the curries, while in the south coconut prevails and creaminess comes into the palate. China also has a place in Indian cuisine, a large number of coolies were sent over during the days of the British Raj to work on railways and road construction (the Chinese ability to build infrastructure better than their Indian counterparts has been noted for centuries) and their descendants, many from Fujian, now run very successful and often long established Chinese restaurants across the country. Cities such as Delhi, and especially Mumbai, have an even greater selection of cosmopolitan cuisine and restaurants than Shanghai. Favorites? Try Indigo in Mumbai, recent winner of the world’s best bar, while La Piazza in Delhi is home to Michelin Star chef Andrea Angeletti. Unlike China, most of India’s fine international dining still remains within hotels, but this is slowly changing. Many old colonial properties are being purchased, upgraded and opened specifically to cater for the international clientele, and there is no doubt in my mind that just as has happened in China, India’s best restaurants will eventually move into some of the most elegant properties the country has to offer, and again as is happening in China, Michelin ranked chefs and restaurants are moving into this huge country full of gourmands all eager to explore and develop a cuisine over 5,000 years old. It’s the ultimate challenge for a chef, and India’s tastes are both locally excellent yet still ripe for gastronomic cultivation. In terms of alcohol, some states in India are completely dry, while in other cities such as Delhi and Mumbai, occasional dry days are observed. That aside, Indian wines are making inroads into international markets, with brands such as Sula, Grover and others very enjoyable indeed, while an extensive imported selection is also freely available. The days of the British Raj of course introduced whisky, rum, and gin, and the Bombay Sapphire, modeled on an ancient Raj era recipe and including aromatics found only in India, is world famous. Quality bars, restaurants and hotels are well up to (and in many cases exceed) international standards, it’s only when one steps out of these comfort zones that problems can arise. Hygiene can be an issue as the country is moist and warm – ideal breeding grounds for disease and stomach bugs. To avoid any upsets, eat and drink at sensible places and if out on walk about, take bottled water. It’s only the naive or corner cutter these days who gets caught out with “Delhi Belly,” but just in case it’s a good idea to maintain a stock of Imodium. If not you, someone else might need it. Be sensible, and India’s hygiene and consumption of water and other drinks and food will not be a problem.

Alcohol consumption
Unlike China, India has dry states, in which the sale and consumption of alcohol is prohibited, for example the states of Gujarat and Mizoram. Certain national holidays such as Independence Day and Gandhi Jayanti (the birth date of Mahatma Gandhi) are dry nationally. Dry days are also observed on voting days. Prohibition has become controversial in Gujarat following a July 2009 episode in which widespread poisoning resulted from alcohol that had been sold illegally. All of the Indian states observe dry days on major religious festivals and occasions depending on the popularity of the festival in that region. Dry days are a serious matter and are enforced by the police. It can also offend others if alcohol is openly consumed during these periods. If planning special dinners or events in advance, it is best to check whether the intended date will be a dry one or not. In Sri Lanka, every full moon is a dry day, as are a variety of holy days. In Pakistan, only members of non-Muslim minorities such as Hindus, Christians and Zoroastrians are allowed to apply for permits for alcohol. The monthly quota depends on their income but is usually about five bottles of liquor or 100 bottles of beer. In a country of 140 million, only about 60 outlets are allowed to sell alcohol and there used to be only one major legal brewery, Murree Brewery in Rawalpindi. Enforced by the country’s Islamic Ideology Council, the ban on alcohol is strictly policed. Members of religious minorities often sell their liquor permits to Muslims and a black market trade in alcohol continues.

In Bangladesh, foreign passport holders of non-Muslim nations can drink in some licensed restaurants and bars (and expatriate clubs) and can purchase imported alcohol from “diplomatic bonded warehouses” at a hefty rate of sales duty (at 300 percent). Holders of diplomatic passports and some other specially privileged persons (such as U.N. employees) have “passbooks” which entitle them to buy imported alcohol from the same “bonded warehouses” duty free. Often duty free and duty paid prices are shown alongside one another. Bangladesh nationals of any religion may purchase alcohol from special outlets with a medical certificate. Illegal homemade liquor (known as “Mod” or “Bangla”) is widely consumed in rural areas. The (mostly Christian) Garo tribal folk also brew a strong rice beer called “Choo.” Christians are permitted to use wine for Holy Communion. The tourism nation of the Maldives also bans the importation of alcohol. If brought in, they may be deposited with customs and reclaimed upon exit. Alcoholic beverages are available only to foreign tourists on resort islands and may not be taken off the resort.

Hotels
India’s hotels at the top end are legendary and are among the best in the world. They are also among some of the most expensive – a night at the Taj Mumbai is going to be US$750. There are some bargains to be had, such as the Gordon House Hotel, close to the Taj; however the boutique hotels often require more local knowledge that we don’t have space to reproduce here. Opulence and luxury aside (we also recommend the Imperial Hotel Delhi as best in class – it’s one of the top 20 hotels in Asia, let alone India), most of the major chains are here. Again, they are an oasis of calm and tranquility among the heat and dust of India. Hilton does a far better job in India than they do in the United States, while brands such as the Oberoi, who specialize in Asia and the Middle East, are well worth checking out and offer comfort, service and quality that are hard to match either in China or the United States. Hotels in India really should be to five star standard for the traveling executive (lower stars get progressively worse), and they literally make your trip happen for you. A five star hotel in India provides the added value service that is essential in an emerging country like this. Your accounting department may not like it, or the extra costs when compared with China, but in India it’s not worth scrimping on this aspect. You’ll need them as a business base, as a home, and as a sanctuary. And yes, you can drink the water, while concerning the service and helpfulness aspect, English is widely spoken, and overall service is far better than that in China’s hesitant or reluctant assistance, where the proletariat can and do still demonstrate their political superiority over the bourgeoisie, and unknown or unproven capitalists in particular. There is a very good reason the new Fairmont Peace Hotel in Shanghai spent a fortune on hiring Western trained service personnel. In India, its long been a normal standard and hospitality reigns supreme.

Hotel concierges
The service in Indian hotels is generally superb, and unlike Chinese concierges, who are often limited in their ability to help or be interested, Indian concierges are generally excellent sources of local information and will always know someone who can help with your request. They are also not so obviously on the make and treat guests respectfully as clients of the hotel. A tip however is appreciated – Rs.500 (US$10) goes a long way for good advice. It is always a good idea in Indian hotels to make friends with the concierge. These are professionals employed for their knowledge and many will have been within the hotels service for decades. They are an excellent source of local assistance and for getting things done. In this respect, the average Chinese concierge service has a long way to go.

Housing
It is more expensive in India, although not outrageously so. A decent family sized furnished apartment will be priced between US$4,000 and US$5,000 a month. Of course the sky is the limit if you wish. The difference is not the quality of the building – in fact Indian top end apartments are generally better than Chinese – it’s the rubble and state of the roads outside that makes the difference. Plus the odd wandering sacred cow. But that’s part of life in India, and it adds character at the very least. Finding a house is as always, a bit of a battle, but making contacts with chambers of commerce or your embassy will help reveal the details of reputable agents that will know the quality and area you’ll be interested in. However, be prepared for a steep bill from the landlord – unlike China’s 2 + 1 month deposit system, many landlords in India will ask for a 9 or 12 month deposit upfront, and that’s generally the norm. Ouch.

Chai wallahs
The tea boy is an integral part of every Indian office and is there to run errands and fetch the tea, cold drinks, lunch curries, a takeout Maharaja Mac, whatever. He won’t speak English, will be from the poorer areas of India, and may work for you directly or be part of a locally run service. He’ll be thrilled to have exposure to international executives. Treat them well, they are good guys, and will revere management as demigods if encouraged with a few kind words, the odd tip, and time spent on a few words of English. He’s a feature of the regular Indian office that is at once both absolutely necessary and vital to the refreshment of the executives. Chinese ayis are just not the same.

The heat
India is hot. And in the summer, really hot. Our Delhi office records temperatures of 45 degrees Celsius in August. Beijing by comparison is 32. India therefore is sweaty, roasting, and on the coast in cities such as Mumbai, very humid. It’s important to dress appropriately, and in India during such times it is not necessary to wear a jacket and tie. A formal shirt and trousers will suffice. The monsoon kicks in during June and brings rains, and plenty of them, but although it may pour, it’ll usually be just for a few hours. The rains are gone come September, when the country begins to cool down. Winter time can be balmy in Mumbai, and positively chilly in Delhi, where it can get down to just above freezing. India very definitely is a country that needs to be examined for its weather conditions. China too is the same. Summer brings heat, especially in the south where Hong Kong, Shenzhen and Guangzhou can become oppressively humid. Beijing’s winters, and the rest of northern China, can become very cold, as fronts from Siberia can and do turn south and bring freezing temperatures. But to cope with India’s heat, it’s wise to pack a bottle of chilled water, especially if you’re walking outside. It’s unwise to buy cold prepared drinks from street vendors unless they are canned or bottled – you need to be sure the contents are good.

Medical care and hospitals
India’s doctors have been exported all over the world and are highly trained both at home and at overseas hospitals and universities. India also has a wide network of international standard clinics and hospitals, as well as being home to some of the world’s top surgeons. There are numerous institutions to choose from – your medical insurance company will provide details, but others include Fortis and Apollo, while Pacific Prime provide a list of English speaking doctors and facilities on a national basis. I have had minor surgery in India (bursitis, an old tennis injury) and both the operation and aftercare were first rate.

Schools
India’s schooling system at the top end is generally excellent – the country possesses some of the most prestigious pre-university public schools in Asia. The Indian government has also recently liberalized the education sector at the university end and is for the first time permitting prestigious academic institutions to establish joint ventures and schools in India. The web site International Schools in India provides a national search function and details. However, in common with China, international schools in India are expensive. You’ll need to allow about US$20,000 per annum per child, however there is a wide and generally well established selection to choose from – with many based on the proven British standard model of education. Your embassy will also be able to advice on pertinent educational facilities in India.

City traffic
It’s an infrastructure problem, and the rise of vehicle ownership compared to the development of roads is surging ahead. While in Beijing our executives can manage if necessary four meetings a day, diaries in India regularly get screwed up. Two appointments outside the office is the maximum at most that can be realistically targeted for without busting a gut. Plan meetings well, and don’t over attempt to arrange multiple meetings each day in India. You simply won’t be able to fulfill them.

Car and driver
 A must. Indian city traffic is improving (but still problematic during rush hours), while China’s traffic problems are worsening. A decent car and driver is needed for you to read the newspapers, catch up on the laptop, and generally use your car bound time efficiently. Best to get a high wheel base vehicle though, especially in Mumbai – those summer monsoon rains dictate you need something to get through the waters. India also has a thriving second hand auto market, something China has yet to really develop – so bargains can be found. And for the wealthy, Bentley, Rolls Royce, Ferrari and Lamborghini are all in the latest showrooms. Our recommendation would be a Land Rover Discovery – it’s now an Indian-owned brand (no import duties) and that’s the job for navigating the worst of the roads and the worst of the weather. If you want to swank it up, another Indian-owned brand is Jaguar and unlike China’s expensive imported vehicles, Indian ownership means parts and service are easy. A driver is a must – a local guy who knows the city and will know all the short cuts and deal with the inevitable argument or road hassle.

Company cars
It’s a standard piece of kit for the busy executive. Together with drivers, some of whom have been professional for years. My driver in Mumbai used to be employed by Sir Richard Attenborough during the filming of the epic “Gandhi” and still receives birthday cards from him. The choices of vehicle are many, but Indians are generally not as keen as the Chinese on displaying wealth. Also, coupled with the appalling state of traffic, it’s highly likely you’ll receive dents and bangs. One day I had three minor accidents all of which messed up the paint work. A wooden cart spun out of control and scratched a three foot long mark along the car’s side, someone sideswiped me along the motorway, and then 10 minutes later I got rammed in the rear at traffic lights – so much for the expensive bespoke paint job. Better then to keep the car modest, be prepared for the odd scrape, and sit in the back. My choice, the ubiquitous Hindustan Motors Ambassador; classic, fun to be in, roomy, plenty of luggage space, inexpensive and easy to maintain.

Taxis
Given the temperatures that can be reached in India, taxis come in two varieties, air conditioned and non-air conditioned. It is wise to choose the former, and the additional surcharge is small. Upon arrival, it is also sensible to head for the “pre-paid taxi” kiosk as touts frequent international airports looking for gullible travelers. Pre-paid taxis are a reasonable fare, usually larger vehicles and are used to dealing with foreign travelers. Beware of helpful porters insisting on handling your luggage outside the main exit, they will immediately demand tips and can be a nuisance. Your taxi driver will help with your luggage. On longer journeys it should be noted that some taxis are only licensed to operate within a particular state and additional planning may be required for out of state journeys. Hotel taxis or cars tend to be expensive – far better to enquire with the concierge as to better and more reasonable rates. Other than pre-paid taxis, it is also sensible to negotiate the price, even if the taxi is metered, before you commence your journey. Some journeys will obviously involve toll roads. Be prepared to have some small change (Rs.100 notes) ready as the driver himself may not carry much cash.

Private clubs
China isn’t really big on private member clubs, and those that do exist tend to be both really expensive and cater for Chinese tastes only, although there are notable exceptions in Beijing, such as the Capital Club. But generally China is not so developed for club facilities for expatriate families and business duties. India, though, follows more the Singapore model, where clubs have long existed that cater for the expatriate community. Of particular worthy mention are the Breach Candy Club (Mumbai), close to the U.S. Consulate and home to Asia’s largest outdoor swimming pool. The Bombay Gymkhana Club offers a great range of sports activities, such as the inevitable cricket, but also hosts the rugby teams, soccer, hockey and many other activities, while in Delhi the Indian International Center is the place to hang out – and is funded by the Rockefeller Center. Private clubs in India are a source of comfort and a home away from home for many expatriates in a manner that China tends to distrust lest foreigners connive together to plot a subversive overthrow of the regime, but they are a welcome respite from the heat and daily hassles of Indian expatriate life, often have a fascinating history, a vibrant business community and provide superb facilities for the family and to make friends. Every executive expatriate package in India should include such a membership, especially if a family is involved. Other cities too, have their equivalents.

Summary
I am often asked the differences between Beijing and Shanghai, or Shanghai and Hong Kong, and which I prefer, and the same is true of Delhi versus Mumbai. I always strive to be diplomatic and say that I’m always happiest where I am at that particular moment. Increasingly though, I’ve noticed that in the China-India space I have occupied now for the past five years, there are more expatriates who are traveling to work in India, many of them from China. It’s to be expected, many successful foreign invested China businesses have either been well established and are now localizing in terms of operational management, or businesses previously only in China are now expanding into India and are sending over their trusted “Asia hand” to do it. There is no doubt that the membership of chambers of commerce in India is expanding, and that progressively greater numbers of expatriate managers are seeking work and employment in the country. China will have been the previous posting for many of them. As was mentioned in my piece two days ago, India’s infrastructure is the opportunity and many experienced project managers will be making the transition sooner or later. India represents a logical extension to a professional expatriate’s career, and the relocation from one to the other is not as extreme nor as awkward as many would think. India is the new land of opportunity, and while China commences its long descent into normal growth and suburban normality, India is where the action is. Overseas expatriates need to start preparing to expect that call – and with a significantly lower individual income tax burden – even positively looking forward to it as a solid career move. Relocating from China to India is fast becoming normal executive career practice.

Chris Devonshire-Ellis is the principal of Dezan Shira & Associates and established the firm’s China operations in 1992. The firm now has 10 offices across the country. He then established the practice in India in 2007, where they now have five offices. The practice handles foreign direct investment into China and India, companies needing advice or assistance with establishing their business in India may contact the firm at india@dezshira.com. Chris also writes for our China-India web site 2point6billion.com, and India Briefing.

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