China Research

This is an attempt to summarize my impressions from quite a number of trips to the “continent” of India. Yes, l see India rather as a continent than representing a single country. When having noticed that India recently has surpassed China as the country with the largest population in the world and when having become aware of the enormous distances from the North to the South and from the West to the East, foreigners should conclude that India is characterized by different geographical, political, ethnical, religious, cultural, social, institutional and economic conditions. All this  in one country!

Understand and comment on these above-mentioned Indian conditions in a friendly and appreciatively way when meeting Indian business people! Foreign business people should stick closely to good relations and business deals. This conclusion looks logical and will remain valid in the long run.

Why is India gaining momentum?

India is currently receiving much more international analytical and commercial attention than a few years ago. There are several explanations for this development:

–  A lot of positive reports on India could be read more recently in the international press – partly in order to create or show a kind of contrast to China;

–  India’s status as a democracy seems to be acknowledged more carefully by current non-Indian corporate leaders;

–  India has started to plan and implement economic reform policy more ambitiously;

–  India received recently the most positive GDP outlook of all countries for 2023/2024 by several global forecasters, by the IMF as well; 

–  the Western global corporate world regards Indian companies to a lesser extent as future competitors than they do when it comes to Chinese global players;

–  China lost certainly recognition in a substantial number of Western countries by not opposing to the Russian war in the Ukraine (which India also rejected to do but India was able to apply its political bonus in the West);

–  some serious policy failures in China (e. g. the reactions on corona) may have turned global commercial attention somewhat stronger to India than ante coronam.

One may summarize as follows: The global business community still seems to judge China as more dynamic – but India still seems to be better able to attract more sympathy points from democratic countries and their corporations all over the globe – and this way also become increasingly interesting to foreign investors. Further growth potential can be explored by sizeable improvements of mainly infrastructure, institutions and education. However, necessary policy changes can take long time to be implemented.

How to meet Indian business people

Here we come to a very important issue for Western business people. When meeting Indian managers or other kinds of Indian colleagues, Westerners often feel that meetings or negotiations are handled more or less the same way in India as it is done at home or in familiar countries in the neighborhood. However, this may turn out to be a completely wrong reaction or attitude.

The other way around: Indian business culture is very different from the Western. Though not covering everything in this article, my experience from India can lead to a number of conclusions or recommendations as follows:

1. 1. Accept the Indian rule of the game! Don’t hesitate to use or say titles!
2. 2. Focus on communication, first on telling and showing who you are!
3. 3. When you meet initially in India, don’t act straight forward to a deal!
4. 4. Accept a dinner without business talk. Talk about your family!
5. 5. For Indians, the family is very important. Take your time to listen!
6. 6. Don’t talk about politics which Indians usually do not like to take up!
7. 7. Don’t be very critical! Indians are rather euphoric or happy. Relax!
8. 8. Indians are religious. Never question their religious habits / seriosity!
9. 9. Never ask or talk about the Indian caste system!
10. 10. During negotiatins: Never let your hosts feel any time pressure from you!

Obviously, one should look for information about how to behave in India. Sensitive topics should be avoided, appreciated topics like family, religion and knowledge about India should be preferred.

If intense commercial relations to Indian companies are planned, it would be a good idea to learn Hindi. Indians even appreciate low skills in Hindi. Do not forget that India already today is the no 5 economy in the world and will probably have moved into the third place around five years from now. The potential is enormous but necessary economic, institutional, social, environmental and educational changes should happen faster than in the past.

India will – as far as one can see today – develop into a giant market for direct foreign investors, exporters and purchasing managers.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

 

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Summary from a speech by Hubert Fromlet, Linnaeus University/Sweden on January 8, 2023, at the “International Research Conference” arranged by the Indian Institute of Finance (IIF)            

Ever since its start 55 years ago, 95 economic researchers have been awarded the so-called Nobel Prize¹⁾ which is broadly considered as the most prestigious recognition for economic research. Unfortunately, only two female scientists made it so far: American sociologist Elinor Ostrom in 2009 and French-American experimental poverty researcher Esther Duflo in 2019. More female candidates could be found which I various times elaborated on in the Swedish and global press, Indian press included ²⁾.

Presumably, the long-term perspective looks better because of the favorable outlook for more extended female research. This probable global way forward – in reality favored by more and more female academic students and graduates – may also serve as a strategic encouragement for Indian economic and financial research.

Since management research very rarely has been awarded so far and management researchers are not ruled out formally from the Nobel Prize in Economics, one may also imagine that fundamentally important and sustainable management research gradually could move closer to the inner circle of Nobel Prize candidates. If so, also more Indian economists may show up on the candidate lists at some point.

Interesting names from India

For being an emerging country, Indian economists were so far quite well visible in a Nobel-Prize context (with the past winners Amartya Sen in 1998 and more recently Abhijit Banerjee in 2019) – even if more could have happened. Jagdish Bhagwati should have been a Prize Winner already many years ago, micro economist Avinash Dixit at least in the past ten years. A strong Indian name for a future Nobel Award should be in my view behavioral and financial scientist Sendhil Mullainathan (Chicago).

It would be positive if economists in the visibly catching-up country of India  strongly could be provided with conditions that can develop ambitions and research in line with India’s obvious individual potential – also for eventually knocking more frequently on the door of a future Nobel Prize in Economics.

References

• https://www.nobelprize.org/prizes/lists/all-prizes-in-economic-sciences/
• https://timesofindia.indiatimes.com/world/europe/economics-prize-wraps-up-unpredictable-nobel-season/articleshow/86928188.cms

 

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

 

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