Negotiations in India, business culture and Indian contract law

Negotiations in India, business culture and Indian contract law

indian contract law

Indian business culture

In Indian business culture, the head of the organisation gives all the explicit instructions and team follows it without complaints. India is a male dominated society and women should be ready for personal questions too. Business in India is based on trust. They value personal networks and close ties.

Negotiations in India

If you want to do business in India and want to start negotiations, please be aware of the following points.

  • The negotiation process can be slow.
  • It is good practice to be patient and polite.
  • Sometimes it can take multiple visits spread over a few months.
  • Hierarchy is important in India.

India contact law

In India, the decision is viewed as a process. Therefore, it does not necessarily stop when both parties have signed the contract. Terms that have been agreed on can be revisited.

Price negotiations in India

Growth in various sectors is immense, but tax and regulatory issues make entry of new businesses apprehensive. For sustainable growth of the company, they should take a long-term view without resting too much on currency changes.

The India legal system

The Indian legal system is fashioned on English common law. It is a unique combination of English common law with statutory and regulatory law. Some statutes enacted before independence still operate though amended many times to to evolve with the specific needs of the times.

Contemporary Indian law also exhibits European and American slant. Primarily enactments are passed in the Parliament and the state legislatures. Case law or judgments of the Supreme Court of India and High Courts of various states and specialized tribunals forms the secondary source of law.

As per the Constitution of India the law laid down by the Supreme Court of India is binding upon all the courts in India.

India follows adversarial model. Parties to a dispute represent their arguments, and present evidence besides calling and questioning witnesses.

The Indian judiciary is known for its fierce independence. It is free of influence from the legislative and executive sections of the Indian government.

Arbitration and litigation in India

Arbitration

It is the effective and faster way of solving disputes than the court proceedings in India. This inspires foreign investors to have more faith in the legal system of India. It is based on United Nations commission on international trade law (UNCITRAL).

Litigation

Litigation process can be very long and frustrating. Therefore, it should only be initiated when you have already had a well-thought strategy. Despite that, you should try to avoid litigation.

Intellectual property rights in India

Intellectual property rights are legally defined as the right one has over his or her own mind, or intellectual creation, during an assigned period of time. Examples of intellectual properties include literature, music and artistic works of all kind. Intellectual property rights vary from the trademark, copyright or patent.

Trademark

  • Business names
  • Slogans
  • Labels
  • Packaging and Numerals

In order for anything to be trademarked and registered, it must follow certain qualifications like:

  • Capability of being graphically represented or on paper
  • Capability of distinguishing itself from other goods
  • Capability of being used as a mark for goods or services

Patent

  • Novel inventions having industrial application

Copyright

  • Websites
  • Software
  • Books
  • Sound Production

Trademark authorities in India

In India, patents and trademarks are handled by various agencies like the Controller General of Patents and Design, Department of Industrial Policy and Promotion and the Ministry of Commerce and Industry. In the same way, the Copyright Office, Copyright Societies and Government of India handle copyrights of intellectual property of the country. Based on the type of property, a duly form is filled and submitted to the appropriate agency.

Between the years 2013 and 2014, the trademark industry was the most common type of property right with more than 200,000 trademark registration applications filed. The trademark industry is covered by the Trademark Act of 1999 - this act identifies the entity of services to distinguish it from goods of same but different, that is of different origin. The most common trademarked property in India is that of business names.

The Indian copyright act

Copyright registration acts under the Indian Copyright Act of 1957. This is a right given by the legislation to creators of artwork, including literature, music and cinematography. It protects the expression of the mind through the creation of art. Most commonly copyrighted properties include websites or software since they are considered as “literary works” under the Act mentioned above. Website copyright can be a tedious process since websites can contain various properties such as music and graphic content. Whereas, software only needs a source code in order to be copyrighted.

The patent act

Under the Patent Act of 1970, Indian intellectual properties can be registered for patenting, as long as the invention has industrial applications. Under the Act, items that will not be patented include:

  • A frivolous invention that contrasts natural law
  • An invention that contradicts morality or can cause serious prejudice against all life forms
  • The discovery of a scientific principle or formulation of a theory that has already been discovered and proven to be true
  • The discovery of a new substance that does not result in the known efficacy of an already known substance
  • Any substance created by mixtures of the same aggregates under the same substance

These are to only name a few of the things that are not covered by the Act. Under the Act, the patent filing must be done prior to publication of the invention, to avoid misconceptions of novelty and humour. If done so, there will be a grace period of 12 months to file for patent registration of the identified invention.

Conclusion

Business in India is fueled by a robust domestic market. All three sectors of the economy - agriculture, industry and services with high savings rates make India a lucrative market.

However, expanding to India can be challenging. It is advisable to research thoroughly, understand the culture, Indian contract law, and necessary procedures to optimize the outcomes of your strategy.

This entry in Asia was updated on May 9, 2017 by specialist.