Understanding the culture of India is a key to successful business relationships.

Indian states can be distinguished by many factors, one of which is on linguistic basis, and there are 26 states in all. Apart from these local languages there are innumerable dialects specific to each ethnic group. Hindi is the most common national language spoken, though that is mostly in the north, making English a neutral-link language.
However, along with globalization has come not only the call center culture where young professionals are well versed with American and British English and accents, but a also a new confidence in the way Indians have tailored the English language to suit their own culture. This occurs mostly in urban areas but is spreading fast to the rural areas as Indians have improvised in order to make English a part of their identity. So it is common to hear “Hinglish”, a combination of Hindi and English, where local terms are combined through English sentences. This usage is not only reflected in advertising, but also in television shows, movies, and even in Indian writing in English, mainly due to the inability of the English words to convey the correct experience or meaning.
Nonverbal communication is also extremely important in every society, especially when doing business as it may be easy to unknowingly offend the practices or beliefs of another culture. Problems arise when two cultures meet, and the physical nonverbal signal means one thing in one culture and has an altogether different meaning in the other culture. for example, many Indians bob their heads up and down when affirming something and from side-to-side when conveying a 'No' shaking the head from side to side is a visual way to communicate to the speaker that you understand what they are saying and in many cases that you agree with them. On the other hand, in western cultures, this is how disagreement or a "no" is conveyed. Women prefer to be greeted with a simple verbal greeting, but, in urban cities, handshakes between both sexes are quite common. Any other exhibition of public affection is usually looked down upon in India
It is important to know that “no” is a selective word in the Indian dictionary for instance, if you ask someone for directions, whether they know the way or not, they do not want to disappoint you, so they go ahead and give you directions anyway. There is nothing in their manner to give you a clue that they have no idea where the place is. Another example during business, of their inability too say “no” is at a store, even if the product you requested is not available, the store-keeper would show you several options, without definitely telling you he doesn’t have your product.
Time management is an important consideration for those dealing with Indian businessmen or people in general. Indians are very different in that they would rather please someone by saying they would be at a certain place at a certain time or have something sent but it may take numerous phone calls and several hours before that actually takes place.
Some other important points are that the right hand is usually used for cash transactions because it is considered auspicious. Touching the feet of the elderly is a way of showing respect. Indians place a premium on family relationships, and usually live and socialize within extended family units. Hospitality is second nature to any Indian. Even if conducting business matters, if they take a liking to you, you will be invited to their homes, to attend their weddings and they would expect to be invited in return. Dining at an affluent and educated Indian's home is not very different from the western way. However, in a traditional middle-class home, one may be expected to sit in a cross-legged position on the floor and eat with the right hand from a banana leaf. It is customary to leave one's footwear outside the door to the house.
Overall, doing business in a particular nation requires a focus on a multi-dimensional understanding of its culture and business practices. Understanding those differences and adapting to them is the key. India is a complex country, and those arriving here to do business will discover that the path to success is often, not very smooth.
Sharri whiting wrote a useful article on “Doing business in India: A marketplace shifting to high speed”which has been pasted below, click here to read the whole article.

Indians in general are very polite, with the "namaste", a gesture with hands folded as in prayer, a respectful greeting. Shaking hands is also acceptable. Be aware that there are cultural differences regarding food: Hindus do not eat beef and many are vegetarian, while Muslims do not eat pork. Many more conservative Indians do not drink alcohol. Says Misri, "Though pork, beef and alcohol is readily available in all towns and cities, especially the four main metropolises."
Avoid commenting upon the Indian caste system or poverty. Learning something about the history and culture of the country helps build understanding.
Women should consider dressing conservatively when going out in public. For example, shorts are not usually worn in public. ..However, as Misri points out, "In today’s India, especially in the major cities, you can wear whatever you feel like especially the foreigners. Conservative dressing is advisable while travelling by public buses or visiting city suburbs or in certain cities in the Muslim-dominated areas."
Be aware that relationships between family members and caste distinctions are hierarchical। The importance of these relationships must be considered when working with Indians. Misri adds that "Caste systems are left behind within the premises of ones home if an individual practices it. Even an averagely educated person doesn’t bring it or practice it in any form at his or her work place."
In some cities, dinner parties start very late and guests arrive long after the hour mentioned in the इन्विटेशन
Medical doctors are considered to be excellent, while nursing care and hospitals often fall short of western standards. Misri adds that there are private clinics, hospitals or medical centres, which do not fall short of any standard but they cost a lot as per Indian standards but not European. "Government hospitals and clinics surely are of very poor standards and always overwhelmed by queues of patients," she says.

Care should be taken to avoid malaria and other diseases more in humid areas। (Banglore, for example, is a less humid, higher-altitude city than some other major cities in India, which may explain in part its attractiveness to multi-nationals।) Drinking water is a major problem and care should be taken to consume bottled water only.
Pollution, though improving, can be a problem in the large cities.

Traffic is so bad that many expats hire drivers to negotiate the crowded streets। Misri confirms, "Traffic is extremely unruly and in many places the rules are just not followed. When there are no sidewalks pedestrians use the roads making it very dangerous to drive. In shopping areas and market places one can be easily cheated in terms of price and quality, it is advisable to take help from a local.

Business etiquette
One of the effects of the British Raj was that English has remained the primary language in business and government, though accents and word usages differ from region to region. The Indian business culture is hierarchical, with respect for age and status affecting all business interactions. This is something you can find in family businesses not within a corporate culture. Decisions will only be made after they have been sent up the chain of command; don’t expect immediate answers। Everywhere in the corporate world there are definite positions for decision making. Do not force lesser-ranked executives into giving concrete answers, as that will embarrass them in front of the group.
Reconfirm all appointments। Depending upon industry or region, punctuality may not be an important issue. You should be aware that the left hand is considered unclean. Although, Misri observes that nobody bothers whether you eat or write or distribute visiting cards with it. "It is considered unclean when performing religious ceremonies." She says.
Never use first names with business superiors, as India is a more formal culture.
Ask for input from participants in a business meeting. Don’t take a "yes" at face value and don’t push for a final yes or no at a meeting। People's attitude is to "ponder over" something before taking a decision
Negotiation on price and terms is normal; you should both offer and expect concessions when making a deal. Bureaucracy is rampant and can be extremely depressing to handle observes Misri. "Needless to say bribing is prevalent especially when dealing with the government," she says. Follow up meetings with a written overview of what was on the agenda।
Something very alarming for a western expat will be the total lack of respect for labour, the unskilled or semi-skilled labour force।

March 2004

She also writes the following about the IT industry :
According to Fortune magazine (November 2003), there are more than 350,000 people working in the high tech service and outsourcing segments in India, with the number predicted to top one million before 2008. Much of this activity is taking place in Bangalore, the centre of information technology industry in India today, with IT companies occupying several million square feet of office space and employing 110,000.
Adding to a roster of Indian companies, such as Infosys, are Microsoft, Dell, CitiCorp, Oracle, Sun Micro Systems, SAP, Cisco, Philips, GE, AOL, Motorola and Texas Instruments and, soon, IBM, which will hire several thousand employees. These organizations not only find the cost savings here important to their bottom lines, they welcome the large pool of educated high tech labour, young people who have chosen to stay in their home country when offered opportunities from incoming multi-nationals.
According to Indian-born Shayonti Misri, who currently lives in the Netherlands, "Another very important factor is the proficiency of the educated labour pool, in the English language. It enables the successful operating of all call centres and makes outsourcing from India much easier and acceptable for European and U.S. companies."
Add to them the tens of thousands of Indian engineers and managers who have returned home from Europe and the U.S., and it is easy to see why the population of Bangalore is expected to rise to seven million by 2011, from 4.8 million in 1991.
Of the other cities in India, Delhi is the centre of government and diplomacy, as well as a growing back office IT centre, while Mumbai (formerly Bombay) has been considered the New York or Los Angeles of India and possibly the easiest city for expat living. Mumbai is home to India’s largest conglomerate, Tata.
Relocating IT jobs to India is not without its problems which are principally power outages (requiring back-up generators), inadequate roads and airports, and widespread poverty. Still, the companies come, learning as they go how to make it all work.
Misri points out, "It is important to note that the call centres work 24hrs to cater to the European and US clientele, in spite of using labour and over and above normal working hours, which includes the night, the multinationals are able to get away without compensating the employees due to the lack of stringent application of labour laws and rights. Something which would not occur in Europe."