INDIA IN THE INTERNATIONAL SPOTLIGHT

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

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.

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 and engineering thus attracting interest of foreign investors. English is widespread language and is accepted as an international language of business thus reducing 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 countries hence 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 thus there will be several opportunities for foreign investors to exploit in future.