Doing Business in India: What the Case Studies Leave Out

Every few months there's a new piece about India's consumption story. The rising middle class, the digital infrastructure, the demographic dividend, the UPI numbers. All of it is true. India is genuinely one of the most interesting places in the world to build a business right now, and I say that as someone who has been doing it for over a decade.

But the case studies tend to leave some things out. Not because the writers are dishonest, but because the things that don't fit the narrative are hard to structure into a slide deck, and they're the kind of things you only learn by being in it.

Here's what I've learned.

Compliance is a full-time job.

The regulatory environment in India has improved substantially over the last decade. GST simplified some things. MSME registrations are easier. Digital infrastructure for compliance has gotten better. And yet, the compliance burden on a small business in India is genuinely significant, not because any single requirement is unreasonable, but because the aggregate of them is relentless.

GST filings, TDS deductions and returns, ROC filings if you're a private limited company, professional tax in some states, labour law compliance if you have employees, FSSAI if you're in food, BIS if you're in certain product categories. Each of these has its own portal, its own timeline, its own penalty structure, and its own interpretive ambiguity. The cost isn't just money. It's attention, and attention is the one thing an early-stage founder has least of.

The businesses that handle this well are the ones that treat compliance as infrastructure from day one, not as an afterthought. They find a good CA early, they build systems for documentation and deadlines, and they don't try to figure it out as they go. The ones that don't do this spend an enormous amount of founder time in recovery mode.

Cash flow is the variable that kills you.

Indian customers, B2C and B2B both, have a complicated relationship with payment timelines. In D2C, RTOs (return-to-origin) are a structural problem: you ship the order, the customer doesn't accept delivery, the product comes back, and you've paid for the logistics twice without receiving payment. At scale, this destroys contribution margin faster than almost any other variable.

In B2B, payment cycles are long. Thirty days is optimistic. Sixty is common. Ninety is not unusual. If you're a service business or an agency, you are effectively providing working capital financing to your clients, and the cost of that rarely shows up in your pricing because it's invisible until it isn't.

The founders I've watched navigate this well are almost paranoid about cash flow relative to revenue. They track it separately, they model it separately, and they make decisions (on hiring, on capex, on new client onboarding) based on cash position, not P&L. It seems obvious when you say it. It's surprisingly uncommon in practice.

Relationships still move faster than systems.

India has better digital infrastructure than most countries its size. And yet, at the level of actual business decisions (vendor negotiations, government approvals, bank relationships, enterprise sales), relationships remain the primary accelerant. Not instead of doing the work, but in addition to it.

This is sometimes framed as a corruption story, which I think is mostly wrong and also misses the point. It's a trust story. In an environment where contracts are hard to enforce quickly and information is unevenly distributed, people do business with people they know, or people who come referred by people they know. That's not irrational. It's a rational response to the environment.

What it means practically: the time you spend building genuine relationships, not networking in the transactional sense but actually knowing people and being known, compounds in ways that are hard to measure but very easy to feel when you need something to move quickly.

The market is not one market.

India at the top end behaves like a mature consumer market. Premium products, considered purchases, brand loyalty, willingness to pay for quality. India in the middle is acutely price-sensitive, highly influenced by social proof and peer recommendations, and will switch for small savings. India at the bottom is a market that most consumer businesses don't actually serve, despite claiming to.

The mistake I've seen most often is building for one segment while believing you're building for another. Usually this means building a premium product, pricing it at a mid-market level to chase volume, and ending up with margins that work for neither. The businesses that succeed in India tend to be very clear about which India they're serving, and they don't try to straddle.

None of this is a reason not to build here.

I want to be clear about that. Everything I've described above is also true of most markets worth building in. The US has compliance complexity, cash flow problems, and relationship dynamics of its own. Europe has regulatory overhead that makes India look simple. Emerging markets always have friction, and the friction is usually the moat once you've figured it out.

The opportunity in India is real. The consumption story is real. The digital infrastructure is genuinely impressive. But the businesses that will capture it are the ones that go in clear-eyed about what the operating environment actually is, not the case study version but the version you discover in the first two years of actually running something here.

The two are related but not the same.