The previous writing assignments are attached. Please use these as reference and write a SWOT on INDIA based on the instructions below: Assignment: This Practicum brings it all together. Based upon what you researched in your other practica plus additional research, complete a SWOT analysis on your country. What are its strengths, weaknesses, opportunities and strengths? Be sure to back your analysis up with facts and references. Provide your best case recommendation for establishing a small venture in this country. Your last Practicum 4 provided arguments for your two recommendations. This paper sets the context for this decision. HINT: Your SWOT should be well-researched to support evidence for your arguments that will lead to your recommendations for two ventures for your group to pursue. You may want to look ahead to your FINAL assignment; it will give you the expectations for the final Feasibility Report done by the group. It will help if your team in its final report if your project was well-researched and analyzed.THIS IS THE BASIS OF ALL OF THE PAPERS:The Scenario Project is as follows:An angel investor has approached the School of Business at the California State University-Monterey Bay. Rather than go to a consulting firm, he wants MBA students to work on this project as consultants. He understands that students will need to understand Global Business and how it is conducted. However, he is patient. The angel investor expects a social entrepreneurial venture to be self-sustaining in two years. He expects any small business to break even in two to three years. He realizes that these expectations may not realistic; he expects a analysis of the risks to determine the probability of success. This Angel Investor has been inspired by the works of Muhammed Yunus and Hernando De Soto. He wants to invest in a small business or social entrepreneurial nonprofit in many potential countries. He is willing to invest up to $5m; but would prefer projects not to exceed a capital infusion of $3.5m. Over the next 10 weeks, you will be doing research to determine the following:Understanding of the dynamics of global business—yes, he understands that much that is written in textbooks refers to large businesses. He made his money as a small businessman, and feels very strongly that with the internet and other sources for financing, that small business-to-business ventures are possible. He is also willing to consider within country ventures as well.Knowledge about the governance structures, international policies, and movement of money.Understanding of cultural norms, structures to help business, and how to conduct business in the country recommended for investment.
revised_week_1_practicum_.docx
practica_week_3_.docx
week6_practica_assignment_kulpreet_gill_.docx
india_practicum_week_2.docx
Unformatted Attachment Preview
Running Head: DEVELOPING A PROFILE
Practicum Week 1 – India (REVISED)
Kulpreet Gill
CSUMB/ Bus 631
July 28, 2016
1
DEVELOPING A PROFILE
2
Practicum Week 1 – India
1) Understanding of The Dynamics of Global Business
The global economy is supported by powerful crosswinds. Disruptive economic market is
slowing development in developed economies. Yet emerging market economies have offered a
measure of global flexibility, though this has set the stage for boom in some factors of economic
growth. The divergence in performance between developed and growing economies focuses on a
continuing shift toward a multi-polar globe, with a decreased reliance on the U.S. as a driver of
the global economy. Emerging economies will not disengage from developed economies, in
another way they will not be derailed as was the case of the past. The advancements mirror
various salient trends that are changing the dynamics of the global business. First, strong internal
growth momentum in emerging and growing economies is offering a worthy worldwide trade
shock-absorber. The United States downturn would be a lot steeper but for the assistance being
offered to its export sector by development to its many economies worldwide.
One thing to note is whether countries like India can sustain this internal momentum. In
an increasing globalized economy, advancements spillovers from developed to emerging and
growing economies remain substantial. Certainly, trade and financial connections are increasing
as emerging economies becomes more assimilated into global markets. Therefore, developing
economies like India are unlikely to be immune from the economic effects of the financial
mayhem in developed economies. However, improved macroeconomic policy systems and
strong productivity should offer more flexibility than in the past. Impromptu stops of capital
flows to emerging markets are still probable when policymakers fail in their footing.
DEVELOPING A PROFILE
3
Furthermore, cautious policymaking has created an opportunity for maneuver therefore many
countries may be able to apply countercyclical policies if advancement falters.
Second, the commodity price shock absorber has not been working like in the past.
Regulating demand in developed economies has not resulted to the normal softening of
commodity prices, in s wide part as the dynamism of emerging economies such as India has
sustained resilient demand progression. Instead, against the setting of a falling dollar and
growing financial market volatility, economic growth factors have risen to new heights. Rising
commodity costs have diminished consumption in developed economies and even more
significantly have generated inflation pressures worldwide, just as activity is reducing
(Colli,2015).
Third, financial shock absorbers are deviating new channels as emerging and growing
economies as a group have resulted to being a net source of saving for the global economy. In
the last couple of decades, accumulation of large international reserves by Asian emerging
economies such as India and economic factors such as oil in Middle East has helped finance
deficits in some advanced economies.
2) Knowledge About the Governance Structures, International Policies, And Movement of
Money
In 2014, the government implemented new policies that made doing business in India easier.
There have been other reforms that have been implemented such as FDI Caps and introduction of
E-Visa to aid in movement of money. Investments in India re managed by exchange control
regulations which is under the governance of the Reserve Bank of India (Budhwar & Valma,
2010). This bank is the country’s central bank and exchange control authority. The structures
involved in controlling investment include;
DEVELOPING A PROFILE
4
Liaison office
This office is for the foreign businesses who engage in source division, export or test the
Indian market with their prospective business venture. This office also ensures that the
business entity improves relations the authorities and business authorities in this country.
Branch office
A business entity based outside of India and is engaged in the business activities in this
country is allowed to open a branch office with an actual approval from Reserve Bank of
India.
Project office
A non-resident business entity can establish its subsidiary based on the industry it want to
engage in although some sectors are prohibited.
A foreign business entity can fund its India venture through channels indicated below;
Equity capital- This involves issuance of equity shares to fund Indian subsidiary
Preference share capital
Debenture and borrowings
External commercial borrowings
Global depository receipts
In Paying for foreign direct investment, a foreign entity can;
Debit to non-interest Escrow account in Indian Rupees in India
Conversion of import payables/pre incorporation costs
Conversion of royalty
Debit to NRE/FCNR account
Normal banking channels
DEVELOPING A PROFILE
5
Business entry strategy in India depends on the nature of business, that particular sector and
scale of operations. Policies taken into considerations include;
Foreign Investment policy
This policy contains the rules, regulations and circulars which are issued by India’s Central
Bank.
Taxation
Income tax is regulated by Central legislation while indirect taxes like value added tax,
exercise and custom duty are both governed by Central and State laws. The India’s government
has pledged to make the tax laws conducive for foreign business entities.
3. Understanding of Cultural Norms, Structures to Help Business, And How to Conduct
Business in The Country Recommended for Investment.
There is a lot of westernization in Indian metropolitan cities such as Mumbai, Delhi,
Calcutta, Bangalore and Chennai. There is not specific precautions that are expected to be
followed in those big cities. Though in this culture, when a business is handling female clients,
some reservations are provided. The locals in India are extremely positive about foreign
entrepreneurs setting up their business in that particular country. The best way to join a business
community in this country is simply interacting with them. It is also important to note that India
is hierarchy in nature of conducting business, especially the small businesses. While doing
business in India, culture dictates that as a signal of respect, one is expected to greet with a hand
shake or folded hands (Namaste). Indian culture dictates that disrespect is evidenced by gestures
(Desai, 2012).
In India culture, when it comes to developing work-based personal relationships, there is
need to play by the rules. It is widely known that Indians favor those that they know and trust, it
DEVELOPING A PROFILE
6
does not matter how the deal being offered is fundamental or not. To succeed doing business in
India, one is expected to be punctual, that is to say that timeliness is essential part in their
culture. Therefore, in case one wants success in this emerging economy, that rules is essential.
Another way is to be patient. It takes a lot of time to complete negotiations with India people,
there being patients goes a long way. Another criterion for success is avoiding directness. This is
to mean that in case the service that is required cannot be fulfilled, one is expected to give an
imperative answer such as, ‘I will try to provide next time,’ instead of saying that there is no
service. Another important aspect to consider while doing business in India is checking out the
local calendar. India is widely known for its numerous religions which amount to seven major
ones and many minor ones. There also six major ethnic communities, therefore it is important to
note the festivities and holidays available in this country.
DEVELOPING A PROFILE
7
References
Budhwar, P, S. Varma, A. (2010). Doing Business in India. Routledge.
Colli, A. (2015). Dynamics of International Business: Comparative Perspectives of Firms,
Markets and Entrepreneurship. Routledge.
Desai, J. (2012). Indian Business Culture. Routledge.
Running head: BUSINESS CLIMATE TOWARD GLOBALIZATION IN INDIA
Business Climate toward Globalization in India
Kulpreet Gill
CSUMB/BUS631
7/30/16
1
BUSINESS CLIMATE TOWARD GLOBALIZATION IN INDIA
2
Globalization is the process by which regional as well as national economies, cultures,
policies and industries integrate through communication, transportation, immigration and trade
amongst themselves (Argenti, 2007). One of the major environmental changes that have occurred
in India in the last fifteen years is the business globalization. Following the major crisis that hit
Indian economy in 1991 when their foreign currency reserves went way down to $ 1 billion, the
then finance minister Man Mohan Singh launched the globalization policy (Kumar & Ganguly,
2010). Following this launch, India has developed various sectors and its business environment
has become better due to the removal of so many trade barriers. In addition to this, the delicensing of the industrial sector has made the trade flow to remain very ordinary .This essay will
therefore discuss the Indian business climate towards globalization and analyze how effective the
business activities are carried out (Kumar & Ganguly, 2010).
A trade barrier is a measure that is put forward by the public authority or the government
that aims at making the locally produced goods or services more competitive than the imported
goods or services (Argenti, 2007). This ensures that the locally produced goods are cheaper
hence can be easily accessed by the citizens as compared to the imported goods. India is the
seventh largest economy in the world and the sixteenth largest exporter and the 12th largest
importer (Argenti, 2007). India exports around USD 336.6 billion and imports around USD
477.3 billion. One of the things that conditions trade in India is the bureaucratic delays.
Similarly, corruption and inadequate structures are also conditions that affect tread in India.
Despite English being one of the official languages used in India, the foreign investors perceive
cultural differences as one of the major challenge affecting them. Following this, it is
recommended that assistance should be provided locally so that negotiations can run smoothly
(Kumar and Ganguly, 2010).
Protectionism is an economic policy that is used to restrain trade between different
countries. Protectionism is carried out through methods like the tariffs on the imported goods,
different government regulations as well as restrictive quotas. The government regulations are
designed to allow a competition that is fair and just between the imports, and goods and services
that are domestically produced (Argenti, 2007). In India, protectionism is used to protect the
domestic industries. Similarly, India uses protectionism to protect certain sectors like the farming
sector. Here, protectionist measure is needed since it is more about the society than the economy
(Kumar & Ganguly, 2010). However, India is very reluctant to give the foreign firms a greater
BUSINESS CLIMATE TOWARD GLOBALIZATION IN INDIA
3
access to its economy that is evidenced by the political row on its delayed decision to open up
supermarket sector to the global sectors, which include Wal-Mart.
The use of quotas is the other way that the government can use to protect its local
investors. This is an alternative method to tariffs, which aims at reducing the quantity of imports
that the country is receiving (Argenti, 2007). To make this effective, the government only allows
a specific number of goods and services to be imported and instead sell in the domestic industry.
The domestic producers mostly prefer a zero import quota so that all foreign imports are
restricted since the domestic production will increase and be sold at a higher price. The use of
subsidies also limits foreign imports. In regard to this, the domestic producers are paid by the
government for each goods they produce. The Indian government has imposed provisional
tariffs, which range from 57% to 116% on the silk that they import from China. A good example
is the way India avoids importation of petroleum from Iraq because the American government
wants to cut imports from Iraq. As a result, USA will support Pakistan since India will be against
it. However, this is not good for India.
The Indian tariffs are very high when compared to other countries despite the fact that it
has opened up its economy steadily (Argenti, 2007). In addition to this, the Indian tariffs are still
very restrictive making investors view it as rapid globalizer. Another major characteristic that
makes Indian business attractive is the fact that the government retains its right to protect its
investors when need emerges. A good example is the agricultural tariff, which has the antidumping measures that have been put to mainly protect the trade (Kumar & Ganguly, 2010).
Similarly, India is among the few countries in the world that have continued to ban the foreign
investment in the retail trade. Nonetheless, the Foreign Trade Policy for 2004/09 has seen the
government stand on trade as well as on the investment policy display a shift in the market from
protecting the producers to benefiting the consumers. This means that the producer is not well
catered for as compared to the consumer. According to this policy, India has to facilitate the
imports that the country requires so that its economy can be stimulated. As a result, India will
therefore become a major player in trade worldwide (Argenti, 2007).
Foreign direct investment is the controlling ownership of a business entity, which is in
one country by another entity that is in another country (Kumar & Ganguly, 2010). It is the
building of a new facility that has a management interest that is long lasting and that operates in
another economy apart from that of the investor (Argenti, 2007). In India, Foreign direct
BUSINESS CLIMATE TOWARD GLOBALIZATION IN INDIA
4
investment is the main source of money for the economic development. Several foreign
companies often invest directly in the Indian business since it is growing very fast. Due to this,
these companies take benefits that have cheaper wages thereby changing the Indian business
environment. In addition to this, the Indian government has amended the foreign direct
investment policy so that there is increase in the FDI inflow. A good example is the increase of
the FDI upper limit from 26% to 49% in the insurance in 2014. In addition, the ‘Make in India’
initiative was launched in September 2014, which saw 25 sectors become liberalized. Since the
Foreign Investment policy was introduced in 1991, India follows china as the second FDI
destination. Most of the biggest companies that have invested in India are from Mauritius. This
therefore suggests that Foreign Direct Investments are very much allowed in India (Kumar &
Ganguly, 2010).
The foreign direct investment inflow in India increased by 48% since the ‘Make
in India@ initiative was launched. As a result, India rose from 15th position in 2013 to the 9th
position in 2014 in terms of the foreign direct investment inflow. To make things even better,
India rose to the top most position in the year 2015. India as a result attracted a $31 billion
investment as compared to the $27 billion and the $28 billion of US and China respectively
(Kumar & Ganguly, 2010). It is important to note that India acquires its FDI through two ways.
The first route is the automatic one, which involves allowing FDI without the government
approval or the even approval from the Reserve bank of India (Argenti, 2007). The second route
on the other hand involves acquiring the government approval before getting the foreign direct
investment. For this route to be successful, the foreign Investment Promotion Board has the
responsibility of overseeing that the correct procedures are efficiently carried out.
In India, formation of alliances with NGOs and other companies is usually carried out.
One of the reasons why the alliances are important is because they help the global companies to
see what they actually need and what they wish to achieve. Concerning this, the company
evaluates the kind various kinds of investment opportunities it is seeking (Argenti, 2007).
Alliances that are based in India tend to not only improve their competition globally but also
prepare them to discover the fortune at the bottom of the pyramid in the markets that exist
(Kumar & Ganguly, 2010). This helps the International companies to generate as well as
discover the India advantage. However, most companies tend to miss out the benefits of trading
with India as they always see India as a platform of just selling their products there.
BUSINESS CLIMATE TOWARD GLOBALIZATION IN INDIA
5
Recently, India has signed the trade agreements with its neighbors and is also seeking to
sign more agreements with the East Asian countries and the United States as well (Argenti,
2007). The examples of trade agreements are the India-Sri Lanka Free Trade Agreement,
Comprehensive Economic Cooperation Agreement (CECA) with Singapore and also the
Framework Agreements with the Association of Southeast Asian Nations (ASEAN), Thailand
and Chile. These trade agreements ensure that there are alliances, which make business more
effective and efficient. Apart from agreements with other countries, India has collaborated with
the World Bank, which provides the analysis on specialized subjects as soon as the government
requests the same (Kumar & Ganguly, 2010). The World Bank has worked with the Indian
government in the last three years by collaborating with the ministry of commerce in helping the
country in the development of an informed strategy for the international reforms as well as the
domestic reforms.
In conclusion, Indian business environment is very competitive as well as effective
(Kumar & Ganguly, 2010). The use of trade barriers and protectionism do not only promote
trade in India but also ensures that other countries are interested to carry out business in India.
Similarly, the good business climate ensures that the economy is good and therefore the living
standards of the Indians are good as well (Argenti, 2007). Since the global trade is slowing
down, there is increased use of trade remedies as higher protectionism word wide. Due to this,
India should be well prepared to cope with these changes so that its business environment
remains effective hence have higher chances of attracting investors.
BUSINESS CLIMATE TOWARD GLOBALIZATION IN INDIA
References
Argenti, P. A. (2007). Strategic corporate communication. New Delhi: Tata McGraw-Hill Pub.
Kumar, S., & Ganguly, R. (2010). Globalization in India: new frontiers and emerging
challenges. New Delhi: PHI Learning Private Limited
6
Running Head: VENTURE IN INDIA
1
Topic: Establishing a venture in India
Kulpreet Gill
BUS 631
8/20/16
Running Head: VENTURE IN INDIA
2
India
I have learned that “People-to-people” contacts strive for unity among people so as to be
able to create development in a wide range by implementation of investment projects and
outsourcing opportunities that will aim in developing skills and transferring knowledge to
communities and individuals who are in need of help that will enable them to move from poverty
and dehumanizing people. Indians and the United Kingdom people were contacted in this case.
When establishing a business in India, it is important to note that the local market is an
emerging market status especially in the Private Limited Sector whereby foreign private
investors are flooding. These investors are mainly focusing in the sectors of media, engineering,
education, construction, healthcare, transport and power. Although, the best place for an investor
to invest is on the Internet as it offers great distributio …
Purchase answer to see full
attachment
Recent Comments