The basic etiquette for any restaurant is very similar such as leaving a nice tip for good service, and being courteous to your host. Many Indian restaurants are not very formal. Yes even those considered best (Indian restaurant are usually very similar). The etiquette for Indian (or any ethnic South Asian) restaurants might be little different from other restaurants. Below I have provided some basic rules.
Do Not Ask for Beef or Pork Edit
Many Indians are either Hindus or Muslims. In Hinduism, the cow is considered a sacred animal so it cannot be eaten. Similarly, Muslims consider the pig to be a very filthy animal so it cannot be eaten. Most Indian restaurants do not serve any beef or pork products. Many restaurateurs might get offended if you ask for beef or pork, when you do not see it on the menu. If you see it on the menu, it is okay to ask. However, both of those meats are not really an Indian specialty, so the safest bet for meat is chicken meat followed by lamb meat. Please also note that some Indian restaurants are purely vegetarian and do not serve any meat. Vegetarian restaurants are usually marked vegetarian from outside. Please do not offend a vegetarian owner by asking for meat.
Eating with your hands or using utensils Edit
This rule varies with your latitude. In North India people are far more likely to use utensils than in the south. In the far south, you may not be offered utensils at all. It is perfectly fine to use your hands (more specifically your right hand) while eating. The philosophy behind this is that eating is a very sensual thing and one should be able to enjoy eating with as many senses as possible – tasting, smelling, looking and touching.
In all cases you should look around and see what your fellow diners are doing. Don't be afraid to ask for spoons or forks if you need them, but if everyone else is eating with their hand, consider trying it. Always use only the right hand, even for breaking off a piece of bread (naan, chapati, roti). (Hint: Pin the bread against the plate with the thumb and rip the piece off with the fingers.)
In the north, most meals are served with bread. In the south, you may or may not get it. The proper technique would be to break a piece of the bread off, dip or take small piece of condiments such as chutney, or vegetable curry and eat it.
In the south, you may be served a selection of curries with a pile of rice in the middle (a "meal" or a thali). In this case you take some curry and pour it onto the rice, then mix it together with your fingers until you can make a small mound or ball with it, then pick up this and pop it into your mouth. The proper mixing of curry and rice is quite satisfying once you are used to it. Try not to get the food too high up onto your hand. Keep the messy part at the fingertips.
At the end of any meal in South India, you will likely have food all over your hand. At this point, you flag the waiter and ask for the finger bowl or head for the "hand wash" station.
Concept of ‘Jutha’ Edit
’Jutha’ means something that came in contact with your mouth, your saliva or your plate (while eating). It is basically something that directly or indirectly came in contact with your saliva. It is considered very rude and unhygienic to offer someone else your ‘Jutha’ unless you are very close family, couple or close friend. So, avoid doing this if you are not sure how your other Indian diners feel about it.
Alcoholic Drinks Edit
Many Indian restaurants would not serve alcoholic drink. Even they serve alcohol, few restaurants have any range to choose from. Indians do not have any wine and dine culture, so best would be to go dry and try something like mango lassi for a refreshing alternative.
Paying the Bill Edit
When they invite you to a restaurant, many Indians imply that they are the host and they are going to pay the bill. It however depends on the individual and nature of the invitation. Many Indians feel awkward asking new acquaintances or friends to ask for payment if they invited them. Even if they want you to pay or help pay, they will decline when you first offer. So, please be double sure if they want to share. Similarly, when you invite your Indian friend to Indian restaurant they might think you will be paying for it. If you want to go Dutch, rather than inviting them, just use words as “lets go to Xyz” or “lets us both try Xyz”.
In most parts of India, a tip is quite small (3-5% is enough), though in the 5-star hotels they may have come to expect more.