He is charismatic, eloquent, educated and holds various titles. He is reportedly a personal friend of the Indian Commerce Minister, also knows important employees in the Prime Minister's Office and went to school with the son of the family that owns one of India's largest industrial conglomerates. That's why he obviously has the best contacts in politics and exclusive access to key positions in the Indian economy, and thus to your potential customers. You get to know him sitting next to you in business class or meet him by chance at a trade fair or conference. And he has time right now. Time for you and your company. 

A contractual agreement was quickly reached and joint business is initially underway; his personal network opens up new perspectives for the European company. You even travel with your family to your daughter's wedding and are introduced to an advisor to the Prime Minister at the celebration. 

But after a while the initial successes and sales stagnate. The new business partner always has plausible-sounding explanations for this, such as “the complex Indian bureaucracy,” “the high prices of German products,” the Europeans’ lack of patience,” etc. An open, honest conversation about negative developments is avoided as much as possible. The social recognition and income of your Indian business partner has grown, but not the sustainable success of your company. 

The economic damage caused by a separation is often considerable; the hoped-for glorious development of your own company in the new growth market of India has failed. 

“We thought our new Indian partner would be an insider who knew the Indian business world inside out. It's all just theater. Now we are standing here empty-handed and are back to square one in the Indian market.” 

Unfortunately, such disappointments are not uncommon.  

From our projects, we have been familiar with various business practices of Indian partners for decades, be it in joint ventures, sales partners, agents or local consultants. The aforementioned phenomenon was already described by us in 2006 (including in “Super Indian or Super Indian?” https://www.manager-magazin.de/politik/weltwirtschaft/a-894901.html) – at a time when India was already in the focus of German medium-sized companies. At that time, interest was particularly driven by India's role as a partner country of the Hannover Messe 2015 and the subsequent abundance of "Success in India" events by associations and other institutions, at which the good news of the "new Eldorado India" was constantly announced.  

This was followed by a phase of disillusionment and the adjustment of expectations to reality. 

There has been a period of high interest in India for some time now. “India is the new China” is a phrase that is being heard more and more often in the business world at the moment. In fact, India, with its dynamic economy, is currently very exciting and interesting as a location and investment destination (https://www.wb-indien.de/2022/09/12/hoffnungstraeger-indien-teil-1/). Driven by geopolitical developments in the foreign trade relationship between the USA and the EU and Russia and China, it can also play an important role as a “neutral” location and alternative between West and East.  

Many companies are therefore currently examining whether India is attractive as a sales or procurement market, or even for local assembly and production. But despite this positive dynamic, many European companies, not only medium-sized companies but also well-known corporations, are also learning the pitfalls of the Indian market. 

Because India is a challenging market and “quick wins” are rare. Unfortunately, a special role is always played by people who, with their skillful self-portrayal and often “Bollywood-ready” acting, cause unrealistic expectations and ultimately deep disappointment with their European business partners. 

A new business partner or advisor portraying themselves as a key person with exceptional skills and contacts is a common phenomenon in India. Such people are supposedly close friends with top politicians, influential families and have exclusive access to future major customers. Europeans are usually dazzled by their charismatic appearance - and when they are invited to a pompous Indian family celebration as a foreign business partner, trust is usually sealed. 

There is no doubt that many Indians are equipped with impressive networks and excellent skills that can lead to rapid business success. The network density is historically determined: caste systems and ethnic affiliations have shaped entire industries and regions and have given rise to so-called “communities” in which close-knit relationships and bonds of trust prevail. This means that at the beginning of a business relationship it is often easy to achieve quick success by relying on your existing network within your own community. But what happens once this internal network is exhausted? This often shows a drastic drop in the success curve. 

A study we conducted between 2007 and 2019 showed that around half of all German-Indian collaborations do not survive the first three years. After a decade, less than 10% of these collaborations exist. The question that arises: What went wrong? Was perhaps the “congenial door opener to the Indian growth market” actually just a good actor? 

Another critical aspect when dealing with new business contacts is the willingness of many people to skillfully exaggerate their CV and their successes. Unfortunately, in India it is not uncommon for titles, awards or degrees to be embellished or even bought. Whether it's celebrating yourself as "Manager of the Year" through payments, earning a doctorate from the same institutes where African dictators receive their degrees, or attending a sponsored banquet at the Swedish Academy of Sciences as a "personal invitation to the Nobel Prize Ceremony” - everything is often done to leave a lasting impression on the other person and in one's own community. 

Europeans often underestimate how important the social position and recognition of one's own community are in Indian culture - reasons why unpleasant topics and situations that damage one's reputation (“loss of face”) are avoided at all costs. 

It is first essentialto apply the same evaluation criteria that you would use for business partners in your own country or in Europe would use. This means carefully reviewing information and suggestions before accepting them. You should also try to get an independent impression on site, for example through unannounced company visits or conversations without the person new Indian business partner. 

If you are faced with the challenge of checking the credibility and quality of your business partners or key personnel in India, we are exactly the right contact for you. With more than 20 years of experience in dealing with the issue of “more appearance than reality” in India, we have specialized in “Know Your Partner” exams specialized. Whether it's about taking a closer look at your business partner, customer or supplier, as well as your own management team or key personnel - we're here to help. 

Thanks to state-of-the-art technologies, we can carry out in-depth and comprehensive analyses. But tried and tested methods, such as informal conversations and background research, are also part of our repertoire. The aim is always to provide you with a clear and truthful picture of your potential business partners or employees. With us on your side, you can be confident that you know exactly who you're dealing with and what surprises might be waiting for you. 

Use our expertise and experience to make the right decisions for your company.