Purpose - This paper aims to investigate diversity management (DM) practices in China and India by analyzing formal DM policy (if one exists) adopted by the company and informal DM practices adopted by managers. It also aims to discuss the appropriateness of the US-originated notion of, and approach to, managing diversity in the Indian and Chinese contexts by exploring how local managers make sense of diversity and manage it in a pragmatic way. Design/methodology/approach - The authors adopted a qualitative approach. In particular, through a semi-structured interview design, qualitative data were collected from 16 Chinese and Indian middle and senior managers and four human resources (HR) director of regional headquarters of foreign multinational firms. The data were supplemented by secondary data from a wide range of sources, including government reports and media coverage to extend contextual understanding. Findings - The paper reveals that most Chinese organizations do not see DM as an issue. Where exists, its focus is on conflict avoidance rather than value-addition to the business. In contrast, managing diversity in India is of greater significance for firms, both legally and financially. Compared with their Chinese counterparts, the Indian managers are much more familiar with the notion of diversity. They are more informed and articulate about diversity issues in their country and organization. DM as a softer approach to human resource management (HRM) has yet to feature as an espoused HR strategy in Chinese and Indian firms. Research limitations/implications - The paper shows that the starting point and the process of DM in the Chinese and Indian contexts are different from that in the Western contexts. Institutional contexts and cultural traditions are essential to understanding DM issues and likely solutions. Small sample size in the study may limit the generalization of the findings. Practical implications - The paper has a number of implications for Western multinational corporations that have operations in China and India and intend to adopt a global HR strategy and roll out their DM initiatives to subsidiaries in different parts of the world. It also has implications for Chinese and Indian owned multinational companies operating in the western contexts. Social implications - Sources of discrimination and inequality at both macro and micro levels were identified in China and India. The paper also highlights areas for DM to improve leadership skills and organizational performance. The findings may inform policy making and the formulation of organizational strategy, contributing to the elimination of inequality and enhancing employee commitment and productivity. Originality/value - The paper fills a gap in the DM literature on China and India through a comparative lens. It highlights the contextual differences in political, economic, cultural and social aspects between China and India and between these two and the Western contexts, including the USA and the UK, where the concept of DM as part of the strategic HRM was originated and popularized.