In 1991, India’s closed economy opened up and attracted investments from several multinational companies (MNCs) around the world. As a result, people began to seek information about doing business in India, giving rise to a plethora of literature aimed at assisting them. Generally there are two prominent views of India.
One is that India is a poor, under-developed country, lacking infrastructure and rife with religious superstitions, corruption and violence.
The other is that India has an under-rated affluent and intellectual class, an advanced Information Technology (IT) sector and a rich culture. Neither view is entirely accurate.
For those planning to do business in India, it is important that they are well informed of the real, complex situation in order to make calculated investments.
Knowledge about doing business in India has to be constantly revised, updated and eradicated of biased or stereotypical views. A symptom of the maturity of this knowledge is recognition that the Indian business environment is amorphous. Conditions vary from state to state, industry to industry and region to region.
This paper seeks to examine some aspects of this complexity and suggests how prospective investors could use the knowledge generated. Apart from Ramachandran’s (2000) acknowledgement of India’s segmented marketplace and Kumar & Thacker-Kumar’s (1996) article on Indian bureaucratic levels, few scholars have examined the diverse reality of
India’s business environment. In the light of the limited scholarship on this topic, this paper has three main objectives:
(1) to show the different perspectives of doing business in India,
(2) to discuss the possible explanations for these perspectives and
(3) to show that the activities of multinational corporations (MNCs) are shaped by their diverse encounters.
Before we begin the analysis, an introduction to India’s economic background is required. For four decades since independence in 1947, India embarked...