balle balle

7/29/2019 Balle Balle

1/19


2/19

The business sector in India has achieved quick growthfollowing liberalization. WTO statistics reveal that it isresponsible for almost 1.5 percent of global trade atpresent.

India has ranked 133rd, though, and this means thatthere is lot of room for improvement for this South Asianeconomic powerhouse looking to cement its position in theglobal economic map.

As the third-largest economy in the world, India is apreferred destination for FDI


3/19

Until the liberalisation of 1991, India was largely andintentionally isolated from the world markets, to protect itseconomy and to achieve self-reliance.

Foreign trade was subject to importtariffs, export taxes and quantitativerestrictions, while foreign directinvestment (FDI) was restricted by

upper-limit equity participation,restrictions on technology transfer.

In 1991, India adopted liberal and free-market oriented

principles and liberalized its economy to international tradeunder the guidance of Manmohan Singh, who then wasthe Finance Minister of India and eliminated mechanism ofstrict government control on setting up new industry.


4/19

A foreign company planning to set up business

operations in India has the two options whether as anIndian company or a foreign company.

If the foreign company establishes its business byestablishing the company under Indian companiesACT, 1956, all the provisions related to the Indiancompanies will apply on that company.

But if foreign company starts its business as aforeign company through branch, liaison office orproject office it has to comply with some otherprovisions also.


5/19

There are a number of reasons why themultinational companies are coming down to

India. India has got a huge market. It has alsogot one of the fastest growing economies in theworld.

Besides, the policy of the government towardsFDI has also played a major role in attractingthe multinational companies in India.


6/19

Government, nowadays, makes continuous efforts toattract foreign investments by relaxing many of its

policies. As a result, a number of multinational companieshave shown interest in Indian market.

India has strengths in telecommunication, information

technology and other significant areas such as autocomponents, chemicals, apparels, pharmaceuticals, andjewellery.

India has a large pool of skilled managerial and technicalexpertise.

The size of the middle-class population stands at 300

million and represents a growing consumer market


7/19

It is too specify that the companies come and settle in India toearn profit. A company enlarges its jurisdiction of work beyondits native place when they get a wide scope to earn a profit andsuch is the case of the MNCs that have flourished here.

More over India has wide market for different and new goodsand services due to the ever increasing population and the varyingconsumer taste. The government FDI policies have some how

benefited them and drawn their attention too.

The restrictive policies that stopped the company's inflow arehowever withdrawn and the country has shown much interest tobring in foreign investment here.


8/19

Besides the foreign directive policies thelabour competitive market, marketcompetition and the macro-economic

stability are some of the key factors thatmagnetize the foreign MNCs here.

Following are the reasons why multinational

companies consider India as a preferreddestination for business: Huge market potential of the country FDI attractiveness

Labor competitiveness Macro-economic stability


9/19

There are certain advantages that the underdevelopedcountries like and the developing countries like Indiaderive from the foreign MNCs that establishes. Theyare as under:Initiating a higher level of investment.

Reducing the technological gap

The natural resources are utilized in true sense.

The foreign exchange gap is reduced.

Boosts up the basic economic structure.


10/19

Roses does not come without thrones.Disadvantages of having an MNCs in a developing

country like India are as under-

Competition to SMSI.

Pollution and Environmental hazards.

Some MNCs come only for taxbenefits onlyExploitation of naturalresources.

Lack of employment opportunities.


11/19

Diffusion of profits and Forex Imbalance.

Working environment and conditions

Slows down decision making

Economical distress


12/19

Globalization is the driver to multi-nationalism. Large foreign companies

(Fortune 500 companies) have looked at Indiaas potential growth market, as IndianEconomy would be the 4th Largest Economy interms of Purchasing Power parity and by

2025 it is projected to be about 60% of USEconomy.


13/19

Large corporations whose entry into Indian Economyhas resulted in mergers and acquisitions in a big waythrough FDI, etc. Those who have/having potential todo multi-million $ business are being acquired and/ormerged with the world's large organizations.

This has created and/or increased the wealth of thestake holders of Indian companies includingemployees. However, with this, the balancing act

between the RICH and the POOR is not maintained.


14/19

On the other hand, there has been huge loss to smalland medium enterprises when a foreign companyenters Indian market to offer their products andservices.

For such companies global strategies matters more,than the economic condition of our country and itspeople. It is just a minute's job for them to closedown the business leaving all its employees and

distributors in lurch.


15/19

IBM: IBM India Private Limited, a part of IBMhas been operating from this country since the

year 1992. This global company is known forinvention and integration of software, hardwareas well as services.

Nokia Corporation: Nokia Corporation wasstarted in the year 1865. Being one of the leadingmobile companies in India


16/19

PepsiCo: PepsiCo. Inc. entered the Indian market

with the name of PepsiCo India from the year1989. Within a short time span of 20 years, thiscompany has emerged as one of the fast growingas well as largest beverage and food

manufacturer.

Ranbaxy Laboratories Limited: RanbaxyLaboratories Limited, one of the biggestpharmaceutical companies in India, started theirbusiness in the country from the year 1961


17/19

Reebok International Limited: This global brand

is a famous name in the field of sports as well aslifestyle products. Reebok International Limited,a subsidiary of Adidas AG, is based in U. S. A.(United States of America) started its operation

in 1890s.

Sony: Sony India is a part of the renowned brandname Sony Corporation, which started their

business operation in the year 1946 in Japan.


18/19

Vodafone: Vodafone Group Plc is an internationaltelecommunication company, which has got it'sheadquarter based in London in the UnitedKingdom (U. K.). Earlier known as Vodafone Essar

and hutch. And many more


19/19

balle balle

Documents