- POLITICAL SCENARIO
- MAKE IN INDIA
- SWACH BHARAT ABHIYAN (The Initiative to Clean India)
- PRADHAN MANTRI JAN DHAN YOJANA (BANK ACCOUNTS FOR ALL)
- FOCUS ON OFFSHORE RELATIONS
- SOCIAL STANDINGS
- TECHNOLOGY STANDING OF INDIA
- ECONOMIC SITUATION OF INDIA
- FOREIGN DIRECT INVESTMENT (FDI) IN INDIA
- POTENTIAL AND OPPORTUNITY IN FDI (INDIA)
- COMPETITIVE ADVANTAGES OF INDIA
- TRADE POLICIES AND INCENTIVES
- FOREIGN CURRENCY AND EXCHANGE INFLUENCES
report must address the following key areas: 1)General overview of the country or region
2) Political,Economic,Socio-cultural and Technological influences/benefits/ advantages
3)National resource and factor endowments that create competitive advantage
4)Foreign currency and exchange influences
5)The countries existing trade policies, systems, barriers and incentives
6) Existing levels of Foreign Direct Investment
7) Summary and recommendation based on your assessment.
Before the worldwide financial meltdown of 2008–09, there was a developing sense among financial specialists and policymakers that the emerging economies, with their new monetary power, are in a better position to withstand the shocks when compared to their developed peers.
India has been the front runner when it comes to growing in tough environments. Along with China, India has contributed a huge chunk to world growth (Dreyfuss, 2009).
The fact that India is basically a consumption story has helped it withstand the rough global weather.
The dynamics have changed immensely for the largest democracy even more after there was a change in the Central Government in May, 2014. Things have started to look better and brighter for the nation (Mohan, 2008).
India is now the fastest growing nation in the world pipping China from the supreme position. It is important to see how the dynamics have changed for this wonderful nation and how things are looking up for the great economy.
It isn’t a surprise when the world’s biggest financial experts are calling India as the bright spot for investments at a global level.
The Parliament of India has two houses- The Lok Sabha (lower house) and The Rajya Sabha (upper house). The ruling party has a thumping majority in the lower house and this ensures that things run smoothly in comparison to the case earlier.
As the government is in vast majority, the government has been able to do things that they think is important for growth. Some of the best things that the government has done are listed below.
MAKE IN INDIA
SWACH BHARAT ABHIYAN (The Initiative to Clean India)
PRADHAN MANTRI JAN DHAN YOJANA (BANK ACCOUNTS FOR ALL)
FOCUS ON OFFSHORE RELATIONS
India boasts of a plethora of religions and ethnic groups (Bhagat, 2011).
TECHNOLOGY STANDING OF INDIA
India is the world's biggest sourcing destination for the data innovation (IT) industry, representing over 65% of the US$ 124-130 billion business sector. The business utilizes around 10 million workforce. All the more imperatively, the industry has driven the monetary change of the nation and modified the impression of India in the worldwide economy. India's cost factor is highly competitive when it comes to giving IT administrations, which is roughly 3-4 times less expensive than the US.
Be that as it may, India is likewise picking up noticeable quality regarding scholarly capital with a few worldwide IT firms setting up their development focuses in India (Eunni, et al., 2007).
The IT business has likewise given rise to major demand in the education system of India, particularly in engineering and in the division of computer science.
The Indian IT and ITeS industry is partitioned into four noteworthy portions – IT administrations, business process administration (BPM), programming items and building administrations, and equipment.
The IT-BPM division has been seeing a growth of over fifteen percent (Compound Annual Growth rate) 2010-15. This rate is 3-4 times higher than the worldwide IT-BPM expenditure.
ECONOMIC SITUATION OF INDIA
Without being stalled by coalition accomplices, Modi held on with his emphasis on change. On the front of infrastructure, government has started reviving the stalled projects. India is highly in need of adequate infrastructure. Real changes and advancements are under procedure for Modi's agenda and dream: 100 Smart Cities and Clean Ganga Mission.
India's quick development in the last decade running up to 2012 saw it rise as one of Asia's most encouraging markets. Be that as it may, the recent slowdown made development and productivity progressively tricky, constraining organizations to ponder the way they assign their respective resources (Contractor, et al., 2007).
As development grows and quick shifting in India's urban and rural areas happen, advertisers should settle on key business sector and areas so that the returns are maximized. Understanding the development drivers and recognizing high-potential markets at a granular level are basic needs for organizations hoping to take advantage altogether from this returning tide of development.
India is doing great and the majority of the development that the nation is seeing is from the sector of services. It is truly the new bright spot, the positive in the worldwide economy.
The reason is clear. The nation has concentrated the vast majority of its development on the part of services. Taking into account World Bank estimation of quality added to GDP, 52.1% of worth added to Indian GDP originates from the services' side while industry (includes producing, mining, and so forth.) just makes up around 30.1%. Interestingly, China's part is 48% Services to 42.7% industry.
Moreover, the nation has not been affected by the late downturn in the markets of manufacturing and commodities, as other rising countries have, because of the fact that India is more of a closed economy. Again as indicated by the World Bank, India infers 23.6% of its GDP from various kinds of exports, like China's 22.6% and much lower than other rising economies.
One more parameter where the country is getting benefit is the cooling of global oil prices. Considering the fact that India imports over four-fifth of its oil demand, the price drop of over 60% is a great advantage. The import bill has reduced drastically and the same can be used in other avenues.
Apart from this, the great population growth and better reforms with respect to doing business has set the course for success for India
Truth be told, in view of quality added to GDP by the services segment, both the US and numerous European nations make a far greater amount of their riches from services area than India. But percentage wise India does much better.
With solid development and rising real salary, India remains a brilliant bright spot in the worldwide economy, IMF boss Christine Lagarde said recently during declaration of policy.
In her address, Lagarde said that the worldwide outlook has debilitated further in the course of the most recent six months exacerbated by China's economy relatively slowing down, weakening of commodity costs and the possibility of monetary tightening for some nations.
Developing markets had to a great extent drive the global growth and it was expected that the developed economies would get on the path of decent growth soon.
While developing markets are an extremely different gathering, the story is comprehensively similar (Gaur & Kumar, 2009).
India, by difference, remains a brilliant spot with solid development and rising genuine earnings.
India, for instance, has diminished spending on the highly costly subsidies on energy so it can put more in development upgrading the overall social infrastructure.
FOREIGN DIRECT INVESTMENT (FDI) IN INDIA
Companies want to exploit the first mover advantage and take benefits of cheap labor and growing demand in the country. With a very high consumer base and a vast youth population, FDI has been so strong that it has already surpassed USA and China as the top FDI destination across the globe.
FDI has steadily increased in India in various sectors since 1991. Post the opening of economy, the interests in India have only grown. In the crucial phase of Indian economy, the legislature of India with the assistance of World Bank and IMF presented the full scale monetary adjustment and auxiliary alteration program. As a consequence of these changes, India opened its gates to FDI inflows and also adopted a much flexible and open foreign policy to encourage investors from all across the globe. Further, under the new foreign policy approach, the government constituted FIPB (Foreign Investment Promotion Board) whose fundamental duty is to welcome and encourage investments from offshore (Chakraborty & Nunnenkamp, 2008).
The latest standings of permissible limits in FDI in India are given below:
• Townships, business centers, shopping complexes, coffee, rubber, palm oil, medical devices, duty free shops, specific railway projects, ATM operations (White Label) - 100%
• Defense sector can have FDI up to 49%.
• Private Sector Banks can have 74% FDI.
• Insurance can have FDI up to 49%.
POTENTIAL AND OPPORTUNITY IN FDI (INDIA)
For Indian economy which has colossal potential, FDI has had a positive effect. FDI inflow supplements local capital, and additionally innovation and aptitudes of existing organizations. It likewise sets up new organizations. These factors contribute to development of the Indian Economy.
Also, the large size of the market and the need of consumption makes it an ideal destination to put one's money. There has been a considerable increase in disposal income as well for the people of India in general. This makes it an ideal market for almost every class of item.
With India growing and expanding on every front, the demand shall only increase and it is important for firms to capitalize on the same (Balasubramanyam & Sapsford, 2007).
COMPETITIVE ADVANTAGES OF INDIA
• A great setup in terms of democracy backed by an independent judicial system.
• Buoyant capital markets along with good number of banks, bank branches and financial institutes have aided a lot.
• Excellent work force that is the result of some of the best technical and management institutes.
• A very high English speaking population. This ensures in smooth in conducting business.
• The proactive nature of the new government. With policies and schemes that are laid to lure investments, the country can only get better.
• A huge chunk of demand by the vast population of India. With the fact that most of the population belongs to the youth brigade, the destination is all the more attractive.
• Labor costs in much lower in India in comparison to the other locations. This happens to be one of the biggest reasons for firms to invest in India (Zheng, 2009).
TRADE POLICIES AND INCENTIVES
The short term goal of the approach is to capture and turn around the declining exports and to give extra support particularly to those areas which have been hit seriously by slowdown.
The long haul goal of approach for India is to try doubling India's pie in worldwide exchange by 2020. So as to meet these goals, the Government would take a blend of strategy measures including financial policy changes, institutional changes, procedural optimization and improved access to the world for businesses.
Change in infrastructure that are needed for exports; cutting down exchange costs, and giving full discount of all aberrant duties and tolls, would be the three measures, which will bolster to accomplish this objective. Attempts will be made to see that the Goods and Services Tax refunds all aberrant charges on various exports.
FOREIGN CURRENCY AND EXCHANGE INFLUENCES
The demand and supply of the foreign currency influences the exchange rate at the bourses of India. There are certain factors that play a crucial role in determining the way foreign currency is valued. These parameters are:
• Difference in Inflation levels of the countries.
• Interest rate regime in the two nations.
• Current Account Deficits (CAD)
• Public Debt
• Political and Economical Stability.
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India has proven that it is the perfect place for investment and it is beyond doubt that the government is working hard to ensure that the nation is the frontrunner in growth.
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