The Indian Business Climate
The Indian Government, popularly known as the Republic of India, is a federal republic government headquartered in New Delhi. It has7 union territoriesand 29 states governed by a common law system founded on the English archetype. The government is separated into three branches. The country’s executive arm is headed by the president while the prime minister heads the government. A bicameral legislature consisting of the Rajya Sabha (Council ofStates) makes up the legislative branch while there is also a judicial branch (CIA). The government is multiparty composed of numerous political parties that influence the mechanisms of government. India is currently consolidating its political and commercial ties with nations such as Japan, Iran, China, and the U.S.
Despite the upsurge in cooperation between the Indian and American government, American enterprises in India still face significant challenges. The most fundamental is the Indian government framework thatis intertwinedbetween the central and state structures (Mehta, Armenakis and Mehta). The multiple legal and administrative systems make it problematic to operate. In addition, another challenge lies ina complex bureaucracy and a lack of proper infrastructure Facilities.
Besides the challenges above, some subproblems are also prevalent such as regional diversity that makes it hard to understand the business culture (Budhwar). This hurdle can be circumvented by having local representation by local people with ample experience and an excellent network. These employees aid in attaining cognizance of the local culture. By also exploring the market thoroughly and seeking advice from other enterprises operating in India, a comprehension of the culture is possible. Another subproblem is the unstableness and high dynamism of the project environment. Executing projects may take years from planning to finalization, with delays and alterations being commonplace (Cappelli, Singh and Singh). To overcome this challenge, an enterprise needs to be flexible, patient and persevering. Close cooperation with the American embassy should also be made a priority.
Budhwar, P. “Doing business in India.” Thunderbird International Business Review 43.4 (2001): 549-568.
Cappelli, P., et al. “The India way: Lessons for the US.” The Academy of Management Perspectives 24.2 (2010): 6-24.
CIA. The World Factbook. 20 May 2015. Electronic. 27 May 2015. <https://www.cia.gov/library/publications/the-world-factbook/geos/in.html>.
Mehta, A., et al. “Challenges and opportunities of business process outsourcing in India.” Journal of Labor Research 27.3 (2006): 323-338.