Case study on India

ASM TOWHEED
801312006

The case focuses on India, one of the most populated county, how they have managed to attract FDI
from each corner of the world and continue to grow their economy; despite the people of different
life style, language and ever changing political environment. It presents India has challenges to
maintain its political environment as the natives are aware of the social needs and the relation with
the neighbor county, on the other hand is a land of opportunity; with less bureaucratic complication,
highly educated workforce and competitive labor. My observation is: in recent years India has
adapted technologies, international language and lessened obstacles for investors dramatically
making them a role model for all other developing nations to follow.
1. As the case suggests, Inception used to be a very tough endeavor in India to achieve in late
1990s; i.e. it took PepsiCo three years just to set up a soft drink concentrate factory, and
Gillette, the U.S. razor blade company, had to wait eight years for its application to enter the
market to be accepted. Nevertheless, the exaggerating growth of Investment in recent years
($3B in 2000 to $27B in 2009) proves that they have strengthened and incapacitated
themselves firmly. The complex and lengthy License Raj system (Approval procedure of 80
different Government agencies) had disavowed. As a result Coca-Cola was able to get
permission for a 100-percent-owned unit in India in eight weeks, and Motorola received
clearance in two days to add a new product line. I would say nowadays, India has a good
environment to invest and certainly ready for more FDI.
2. English being the widely used language, usually MNCs will look for a county where highly
educated human resource available and English is practiced as a national language. A MNC
does not need to spend a ton of money in training when the workforce is already aware
about the technicality and complicacy. MNCs like IBM, Microsoft, Nokia Corporation, Sony
and Vodafone have raised their plan in India; the reason behind their investment is quality
engineers that India had produced in the recent past. As these MNCs depend on highly
sophisticated technology it is imperative that the knowledge and the education level of the
employees match their wants, only cheap labor does not serve the purpose and that
explains the importance of highly educated human resource pool for MNCs.
3. The explanation of low per capita income of the country is correlated with the labor cost, as
Three-quarters of Indians live in over 600,000 villages. With the evaluation of in areas such
as medicine, engineering, and computer science MNCs are already rushing to India.
However we need to consider the menial and semiskilled the industry need as well. For
example the agriculture and textile sector need workforce. As India can offer labor at a very
competitive price, it certainly is the cause of growing business further.