The success of your business in India depends largely on whether you work with the right partner.
Unfortunately, when it comes to selecting a sales or joint venture partner, “chance” is all too often in charge. We have explained why a structured approach to finding business partners in India is worthwhile other specialist articles already discussed in detail.
German-Indian relationship problems
Initiating business in India
In addition to the hard factors such as market access, industry know-how, production resources, infrastructure, network or capital resources, in our view completely different aspects and characteristics of a (potential) business partner play an even more important role. We would like to specifically address the examination of these so-called “soft” values such as integrity, loyalty, trust, transparency and commitment. This also includes values such as “compatibility” with one’s own corporate culture and an investor’s India strategy.
Unfortunately, the qualities mentioned are few and far between in India. In our article “Why joint ventures really fail in India” We cite the following as typical “reasons for divorce” in German-Indian joint ventures:
- Owners' disagreements regarding company strategy
- Differences in management style, as well
- Lack of ability to compromise on the part of Indian partners
Therefore, examine whoever binds forever …
In order to prevent such future “marriage crises”, one should not throw oneself head over heels into the arms of the first wedding suitor that comes along with rose-colored glasses, especially in India.
Due to an often overly cautious approach on the European side, so to speak “Too much” intercultural preparation In reality, the due diligence of an Indian business partner by the European side is usually not intensive enough. So the “soft” factors mentioned above are easily neglected during the examination and sooner or later blind love ends up in front of the divorce judge.
What do you know about your Indian partner?
Do you actually know exactly who you are working with? What drives your partner? Why does he really want to go? them work together? How does he behave in critical phases? Has he had any collaborations such as sales partnerships or joint ventures etc. with other European companies in the past and how did they go?
Before you enter into a cooperation, you should be able to answer these questions clearly. And if you are already in a relationship and these questions have not yet been fully clarified, then you should start working on this information as soon as possible.
Because only if you understand your Indian partner can you make the right decisions in India and not be directly at the mercy of your partner or even his hidden Agenda delivered.
I know what you did last summer...
On the other hand, you can assume that your Indian business partner knows almost everything about you: He has not only collected business information about your company, but also collected private details - right down to your children's school and your car brand.
Indian family businesses think very carefully about who they enter into partnerships with and who they don't. Indians always want to know exactly who they are dealing with. Since there is no separation between business and private life in India, anything that helps you assess your counterpart is of interest.
Knowledge is power – and a self-protection mechanism
In India, mistrust, prejudice and competition are among the dominant social driving forces. Therefore, the constant “checking of the other person” as an automatic self-protection mechanism runs as background noise in every situation, so to speak.
Just as partnerships between men and women in India are almost exclusively concluded within their own “community”, Indians also prefer cooperation within the family or with members of their own clan in a business environment. Conversely, people tend to avoid business partners who are outside of their personal network or who are difficult to assess.
What is common practice in India is no different when working with foreign partners.
How to find out more about your partner
In India, create a lot of information equality and don't believe everything your potential partner tells you.
Former business relationships are particularly interesting for your consideration. How has your partner behaved with foreign partners in the past? What behaviors characterized him? Was he oriented towards partnership and long-term, transparent and open or did he act more selfishly and more concerned with his own advantage?
Sounds a bit complicated - but all of this is comparatively easy to find out - via completely official information channels, but definitely in combination with unofficial channels!
- Official primary data and direct information: Research your partner in official databases like this Indian company register or hire a professional information service provider to find out which European companies have already had business relationships with your target partner. Contact them and get valid information first hand.
- Informal channels: Use your own or other but trustworthy networks in India to get information about your potential partner and the companies in his or her environment. More about this in our Articles on market research in India.
Because a relationship on equal terms is only possible if you know your partner and can assess him correctly. Otherwise, you will be at risk – due to the information imbalance one-way dependent relationship to your own detriment. This is a situation that Indian entrepreneurs often strive for with their European business partners. But that is definitely and definitely NOT in your interest!
