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INDIA IN THE INTERNATIONAL

SPOTLIGHT

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COMPARATIVE MANAGEMENT

ASSIGNMENT 1

INDIA- IN THE INTERNATIONAL SPOTLIGHT

SUBMITTED TO: SIR UMER BIN NAJEEB

SUBMITTED BY: USAMA ZAFAR (01-111091-141)

RAJA BILAWAL

ZEESHAN AYUB

RAMEEZ MALIK

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In past doing business in India was quite difficult as many MNCs complained that there are too

many barriers for effective operations. In mid 70s the country changed its rules and required that

foreign partners hold no more than 40% ownership in any business as a result many MNCs left

India. But Indian government has been relaxing its rules in recent years, particularly those

relating to MNCs.

With disbandment of License Raj that made government permits mandatory for almost every

aspect of business, the climate for foreign investment has changed and improved markedly. Coca

Cola got permission for 100%owned plant within 8 weeks. Motorola was able to add a new

product in their product line within 2 days that too via fax. Climate for business in India is very

supportive for foreign investments as;

Labor is skilled and educated. Communication barrier is not there as it would be in China for MNCs. Costs can be cut in production by foreign investors as labor is very cheap.

ANS.2:

Highly educated employees are very essential for MNCs wanting to spend in India as less

educated employees can be found in large number in China. So highly educated and skilled work

force is turning out to be a major competitive edge for India. In some businesses highly educated

workforce is much more important as in the field of:

Information technology. Medicine. Engineering. Computer Science and Telecom.

Indian government is also focusing a lot on creating more educated and skilled workforce as it

will be prime attraction for any MNC. India is thus now having the highest number of software

engineers provider to whole world and almost 40% of Microsofts employees are Indian. Many

Mncs are also outsourcing some of their operations to India because of cheap labor and high

quality work.

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ANS.3

India although having a low per capita income but I can say that India will be an excellent place for doing

business in coming years as;

Indias GDP is growing rapidly as after the first big year of new investments it jumped to over 4%and in 2006 it increased by more than 8% so it will raise per capita income of a common man

too.

Many educated and skilled workforce is there in field of medicine, computer science andengineering thus attracting interest of foreign investors.

English is widespread language and is accepted as an international language of business thusreducing communication barrier for investors which they can face in South America and China.

Low wages and salaries, which are often 10 to 30% of those prevailing in developed countrieshence an investor, can produce thrice of what he was producing in his native country.

These strong points will increase as Indias major part of population is young and educated thusthere will be several opportunities for foreign investors to exploit in future.