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City Guide: Mumbai

Mumbai is booming with new industries and long-established multinationals.


City guide

by Diane Mehta December 2008

Mumbai is booming with new industries and long-established multinationals.

About 20 million strong, Mumbai—previously known as Bombay—has always been India’s most cosmopolitan city, though until the finance minister liberalized the economy in 1991, foreign investment and trade were severely limited. Since then, the economy has grown exponentially, thanks to service-based outsourcing, software engineering and technology. India achieved 8.5 percent GDP growth in 2006, and again in 2007.

“Mumbai has the oldest stock market in Asia,” notes Gunjan Bagla, founder of Amritt Ventures, a consultancy for American companies in Asia and author of the recently published Doing Business in 21st-Century India. The city grew on the strength of cotton exports from the British empire, he adds, explaining that everything from manufacturing to entertainment and financial services have cemented Mumbai’s role as a business hub. Citigroup, Western Union, Bank of America, Dow Chemical, Nortel, Motorola and other companies all have operations in Mumbai.

The downtown area resembles the Blade Runner set, with makeshift shops squeezed between colonial-era buildings and high-rises, and ATMs on corners where motorbikes, sometimes transporting an entire family, buzz around among small cars and stately Mercedes. In the last few years, a flurry of international brands—Ferragamo, Versace, Gucci, Christian Dior—have set up shop across the city, catering to the new middle class and the established upper classes. Yet if a Mumbaikar shops for rugs, for example, he does it at home—it’s not unusual for storekeepers to bring entire collections to your house. This is a service-oriented society: Most households employ several household helpers/staff, as well as cooks and personal drivers. While there are now megamalls in the suburbs and plenty of shops housing designer clothes and fusion-style outfits, people still shop at textile markets like Mangaldas and established fabric stores like Kala Niketan, then hire a tailor for stitching.

Language and dress codes

English is the standard language of commerce and probably spoken more widely than any other language across the country, though Mumbaikars also speak Marathi and Hindi. Dress codes are similar to those in Western countries, with jackets and ties for men, especially in more conservative industries like banking. Most women still wear saris or tunics with loose pants, though some women now wear skirts and slacks as well.

Social rules still tilt to traditional

Foreign businesswomen should dress conservatively, without revealing tops or short skirts, explains Bagla, who warns, “Friendly pats or hugs, even excessive smiles from foreign women, are sometimes misread by Indian men as come-ons.” He also says that “an American woman visiting India for the first time should be crystal-clear about her role and status in the business relationship. Once Indian counterparts understand that, they will treat her with respect.”

While most offices open at 9 a.m., some open slightly later and close closer to 7 p.m. You will certainly get invitations for social engagements, and you should accept them. “The more you learn, the more capable you are of being able to manage in a different culture,” says Hal Sirkin, senior partner of the Boston Consulting Group (BCG) and coauthor of Globality: Competing with Everyone from Everywhere for Everything. Lunch meetings or drinks and dinner are to be expected, although dinner may not take place until 10 p.m. or later. Breakfast meetings are rare.

Indians tend to be frank when they talk casually—though less so with business concerns. “Small talk is important and often centers around cricket and Bollywood,” says Bagla. “Americans also need to understand that Mumbaikars don’t consider questions about politics or religion to be personal—they are fair game for small talk. Don’t be surprised if you are asked about Barack Obama’s chances or about your political affiliation.”

While Bagla advises women to be restrained with physical contact, he guides men to be aware that physical contact between men is not seen as inappropriate; a tap on the shoulder or a really long handshake is not uncommon. “Also, in public spaces, Americans are used to having an invisible circle around them that nobody violates. That concept doesn’t exist in India. If you’re standing in line, people come really close to you; and in the elevator, they’ll be all over you. They’re not trying to be rude—it’s a crowded country,” he explains.

Pierre Étienne served as the executive director of clinical operations for Pfizer in the ’90s, set up a manufacturing plant in India in 1996 and finished his work there in 2001. “In those days, setting up a phone line and rapid IT line was a long process,” he recalls, “but there was gradual change as we progressed and were followed by others.” Étienne says that the notion that you could do clinical trials in India—with fewer errors—was internally ridiculed. “It had something to do with a general belief that India was a very difficult or impossible country to work in, with impossible people.” But in India, perseverance counts. Étienne succeeded, producing better-quality results than any other country.

Mumbai is by any standard a progressive city, but this is still India. “In Mumbai, you’re facing a different world, and that’s the reality. Don’t expect Paris,” Sirkin advises. Rajesh Shotriya, CEO of Irvine, Calif.–based Spectrum Pharmaceuticals, admits frankly, “It’s very difficult to do business in India. The government bureaucracy is still alive and kicking, in spite of all the so-called relaxations they’ve done.” Shotriya says that starting up his company has taken two-thirds of a year, and that’s after hiring a prestigious law firm and audit firm in Mumbai. Yet he argues that Bombay is still the most efficient town in India.

Rajnish Mishra, president and CEO of Avaan Therapeutics, says to incorporate his company took a day in the U.S. and nearly two months in Mumbai, a time frame he was pleased with. Punctuality is a relative term in Mumbai. “Never take any time length for granted,” says Mishra. “People commit knowing fully well they cannot deliver, so it’s actually very important for any businessman to set an inspection—audit, go and make sure it’s happening on time, otherwise it won’t happen,” he offers, adding that professional people tend to stick to time frames or at least tell you when they can’t meet deadlines. This extends to meetings as well. “People in the west are used to clocks, and Indians work on calendars,” explains Sirkin. A meeting scheduled will probably take place that day, though not necessarily at the time arranged, so flexibility is necessary.

Understanding the way Indians communicate

“Indians respect relationships and tend to be indirect rather than direct in their communications. This makes it hard for them to share bad news. I tell my clients never, never, never to assume that no news is good news,” says Bagla. In India, an unexpected silence from your business partner is almost always a reason for concern.” His advice: Be proactive in communicating with Indian counterparts, and follow up vigorously. That politeness affects business dealings in several ways. It masks the fact that Indians are focused on dealmaking.

“Indians are very tough negotiators—they’re very nice, and they take you out for lunches and dinners, and give you garlands and gifts, but they’re very bottom line–oriented,” says Shotriya.

DIANE MEHTA grew up in Mumbai and visits often.

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