/ Unlocking Opportunities: Guide to Doing Business in India

For a European company to succeed in India, you must be aware that India is a fragmented market with large, and often underestimated, regional differences in language, culture, infrastructure and wealth, all of which affect the regional business culture.

Indian states are therefore better compared to individual countries than to, say, the different European Countries. Indeed, India’s most populous state, Uttar Pradesh, has as many inhabitants as Brazil, and the southern state of Tamil Nadu has an economy as large as that of Hungary.

There are also large demographic differences between Indian states. Here, state governments play a crucial role in shaping the business landscape. They control many important laws, such as those related to business, labor, and the environment. For example, Gujarat, streamlined regulations, leading to impressive economic growth. On the other hand, Bihar, improved law and order and infrastructure, achieving substantial GDP growth. In contrast, Uttar Pradesh, with frequent government changes, struggled to implement reforms, resulting in slower economic growth. Stable state governments have a significant impact on overall growth in India.

North Indians primarily speak Hindi, while South Indians prefer to communicate in English or in their regional state language, such as Kannada or Malayalam. The German wholesaler METRO, better known in the Netherlands as Makro, found out after their start in India that there are big differences between the groceries that customers in a certain region put in their shopping cart and adjusted the assortment accordingly by adding more local products. Logical really, Finns also have different preferences than Spaniards.