Republic of India: International Business

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Republic of India: International Business - Presentation Transcript

  1. Republic of India
    By
    Christopher Pappas, Ruth White, SagarChuri and SouvikBiswas
    MBA 6100
    Dr. James M. McFillen
    International Business and Management
    Tuesday, August 4, 2009
  2. Geographic Information
    Political, Legal, and Economic Systems
    Financial Information
    Economic Data
    Trade Information
    Population and Population Characteristics
    Culture and Key Business Practices
    Agenda
  3. Geography
    Capital: New Delhi
    Financial Center: Mumbai
    Strategic Location: Access to domestic and South Asian Market
    Borders:
    • West: Pakistan, Arabian Sea
    • North East: Myanmar (Burma), Bangladesh
    • East: Bay of Bengal
    • North: China, Nepal, Bhutan
    • South: Indian Ocean
  4. Surface Area
    Total Area:
    • 1.3 sq. million miles
    • Almost one third of USA’s size
    • 7% of total area consists of deserts
    • 21.6% of total area consists of forests
    • 9.5% consists of water
    • 49% of land is used for arable purposes
    • 2.8% of land is used for permanent crops
    • 48% of land is used for other purposes
    • India is the 7th largest country in the world after Russia, Canada, U.S.A., China, Brazil, and Australia.
    • Coastline extends up to 4,340 miles.
    • 54% of the land is vulnerable to earthquakes
  5. Facts to Know
    Kanchenjunga (8,598 m or 28,169 ft), 3rd tallest mountain in the world, lies on the border with Nepal
  6. Natural Resources
    Coal (4thlargest reserve in the world), Iron Ore, Manganese, Mica, Bauxite, Titanium Ore, Chromites, Natural Gas, Diamonds, Petroleum, Limestone
  7. Agriculture & Industries
  8. Facts to Know
    • India ranks 1st in the production of bananas and mangos. In 2000 it produced 11 million metric tons of bananas, while Brazil produced 6.3 million metric tons
    • In 2004 India ranked 1st in the land area under rice since 42 million hectares are used for growing rice, and ranks 2nd in the production of rice since it produced 89 thousand metric tons
    • India is the world’s largest producer of milk and 2nd largest producer of food, including fruits and vegetables. India accounts for 15% of world’s production of vegetables
  9. Imports & Exports
  10. Balance of Trade
  11. Transportation
  12. Infrastructure
    $12 billion investment in Highways Development Program. Over 8,000 miles of Highways being developed
    Upgradation of airports
    $22 billion investment in developing ports and shipping sector
    Major advances in telecommunications sector. Bandwidths of terabit available. Sharp decline in telecommunications costs
  13. Population
    • India represents 17% of the world population
  14. Cities by Population
  15. Age Structure
    Median age of the total population: 25.3 years
  16. Work Force
    Total Work Force: 516.4 million
    • 60% work in agriculture
    • 17% in industry
    • 23% in service
    Unemployment rate: 7.2%
    Urban population: 28%
    Population density: 368.15 people per sq. km
  17. Sex Ratio
  18. Religion
    India is the only country with over 50% of its population practicing the Hindu religion
  19. More Population Details
  20. Human Capital
    • 2nd largest English speaking population
    • 2nd largest group of software developers after the U.S.
    • IT industry $14 billion; growing at 50% per year
    • Sends more students to the U.S. colleges than any other country in the world. In 2008, over 95 thousand Indian students enrolled in the U.S.
    • Strong pool of scientific and technical manpower
    • High quality, cost effective, competitive manpower with over 100 thousand IT professionals added each year
    • 255 Fortune 500 companies getting services from India
    • 100 of the Fortune 500 have R&D facilities in India
    • Global consultancy A T Kearney rated India as the most attractive destination for offshore business processing
    • Job creation: 1 million direct and 2 to 3 million indirect
  21. Language
    Hindi is the most widely spoken language and primary tongue of 41% of the people
    English is the most important language for national, political, and commercial communication
  22. Political System
    The Constitution of India is the longest and the most exhaustive constitution of any independent nation in the world
    The preamble of the constitution defines India as a sovereign, socialist, secular, democratic republic
    The President of India is the head of state elected indirectly by an electoral college for a five-year term
    The Prime Minister is the head of government and exercises most executive powers
    The Prime Minister is by convention supported by the party or political alliance holding the majority of seats in the lower house of Parliament
  23. Legal System
    India has a unitary three-tier judiciary, consisting of the Supreme Court, headed by the Chief Justice of India, twenty-one High Courts, and a large number of trial courts
    The Supreme Court has original jurisdiction over cases involving fundamental rights and over disputes between states and the Centre, and appellate jurisdiction over the High Courts
    It is judicially independent, and has the power to declare the law and to strike down Union or State laws which contravene the Constitution
    The role as the ultimate interpreter of the Constitution is one of the most important functions of the Supreme Court.
  24. Economy
    India is:
    • One of the fastest growing economies in the world and the 2nd fastest in Asia
    • The 10th most industrialized economy
    • Ranked 1st in prevalence of foreign technology licensing
    • Ranked 2nd in availability of scientists and engineers
    • Ranked 9th in quality of management schools
    • Among top 10 tourist destinations
    • Ranked 12th in firm level innovation
    • Ranked 16th in firm level technology absorption
    • Ranked 32nd in company spending on R&D
  25. Facts to Know
    India is
    the world’s 2nd largest small car market
    one of only three countries that makes its own supercomputers
    one of six countries that launches its own satellites
    the world’s 2nd largest pharmaceutical industry after China
  26. Gross Domestic Product (GDP)
  27. GDP – Composition by Sector
  28. Currency
    1 Indian Rupee (Plural: Rupees) = 100 Paise (Singular: Paisa)
  29. Exchange Rate
    Last 120 days:Latest (Jul 31) 48.062, Lowest (Jun 1) 46.9627, Highest (Mar 3) 51.9699
  30. Inflation Rate
  31. Facts to Know
    The Bombay Stock Exchange (BSE), in Mumbai, is Asia’s oldest and India’s largest stock exchange
    It lists 6,600 companies; only the NYSE has more
    It is the 5th largest in terms of number of trades
  32. Stock of Foreign Direct Investment
    India is:
    • 6th most attractive destination for FDI
    • Major destination for foreign venture capital funds
    • The best destination for outsourcing
    • Amongst the leading entrepreneurial hotbeds globally
  33. Corruption Perception Index
  34. India in Global Communities
  35. Globalization Index Rankings2007Out of 72 countries
    INDIA
    CategoryRankingAmount/Percentage
    Foreign Direct Investment 67 As share of GDP 1.02%
    Gross Domestic Product 12 GDP in USD-780 Billion*
    Total Trade 62 As share of GDP 43.9%
    Memberships in Int’l Orgs. 66 8 memberships
    UNITED STATES
    CategoryRankingAmount/Percentage
    Foreign Direct Investment 69 As share of GDP .90%
    Gross Domestic Product 1 GDP in USD–12.4Trillion
    Total Trade 71 As share of GDP 26.2%
    Memberships in Int’l Orgs. 1 15 memberships
    * As of 2008 – India’s GDP in USD rose above One Trillion at 1.29T
  36. Trade Information
    Profitability of US investments in India: 19.33% in 2000 (US Dept. Of Commerce)
    Complete exemption from Customs Duty on industrial raw materials
    Corporate Tax Holiday for five years for 100% export oriented companies, and companies in Export Processing Zones
    Liberalized Trade Policy
    Treaty Corporate Tax Rates:
    Avoidance of double taxation exists
    Pay lower of: tax applicable to foreign country or corporate treaty rate
  37. Transnational Issues
    India is a source, destination, and transit country for men, women, and children trafficked for the purposes of forced labor and commercial sexual exploitation
    Largest concentration of poor people in the world
    Highest rate of malnutrition among children under age of 3 (46% in 2007)
    World’s largest producer of licit opium for the pharmaceutical trade, but an undetermined quantity of opium is diverted to illicit international drug markets
    Transit point for illicit narcotics produced in neighboring countries and throughout Southwest Asia
    Illicit producer of Methaqualone
    Vulnerable to narcotics money laundering
    Ranked 2nd after South Africa in number of deaths from AIDS during a given calendar year (310,000 in 2001)
  38. Culture
    India is the world’s most diverse country considering: culture, linguistics and genetics. Only Africa (as a continent) is more diverse.
    India’s culture is marked by a high degree of syncretism and cultural pluralism
  39. Cultural Dimensions
    PDI - Power Distance Index India = Blue
    IDV - Individualism US = Yellow
    MAS - Masculinity
    UAI - Uncertainty Avoidance Index
    LTO - Long Term Orientation
  40. Facts to Know
    The Indian film industry is the largest in the world
    Bollywood, based in Mumbai, is the largest film producer in India and one of the largest in the world
  41. Business Etiquette
    Do use titles to address your Indian counterparts, such as “Professor” or “Doctor”. If he/she does not have a title, use “Mr”, “Mrs”, or “Miss”.
    Do wait for a female business colleague to initiate a greeting whether it is verbal or physical. Indian men do not generally shake hands with women out of respect.
    Do remain polite and honest at all times in order to prove that your objectives are sincere.
    Do NOT be aggressive in your business negotiations – it can be interpreted as a sign of disrespect.
    Do NOT take large or expensive gifts as this may cause embarrassment. If you do take a gift make sure you present the gift with both hands.
    Do NOT refuse any food or drink offered to you during business meetings as this may cause offence (sample small portions at least). Keep in mind that traditionally, and religiously, majority of Indians are vegetarians and do not drink alcohol or smoke.
  42. Key Factors to do Business
    Finding good partners who have knowledge of the local market and procedural issues
    Good planning
    Aggressive due diligence and follow up
    Patience and commitment
    “How to Do Business in India”
  43. Porter’s Diamond Model
    Major Industries
    Coal mining, Steel, Petroleum, Chemical
    Major Exports
    Petroleum products, Gems & Jewelry, Chemicals
    Natural Resources:
    Coal, Iron core, Diamonds, Natural Gas, Petroleum
    Major Industries
    Dairy(Milk), Leather
    Major Exports
    Dairy Products, Leather goods
    Structure & Strategy
    Cattles
    Factor Condition
    Major Industries
    Outsourcing
    Demand condition
    Manpower
    Major Industries
    Agriculture
    Major Exports
    Food Products
    Availability of land
    Major Industries
    Tourism
    Picturesque Locations
    Related & supporting industries
  44. Country Specific Advantage
    English Speaking Country
    Ideal for Outsourcing
    Software Developers (2nd in world)
    Ideal destination for FDI
    Cheap Labor
    Huge Market
  45. Threat to Indian Service Industry
    Service Industry
    Service Industry
    (Outsourcing)
    Manufacturing Industry
    Foreign Manufacturing Industry
  46. India Rising
  47. Questions?

+ Christopher PappasChristopher Pappas, 7 months ago

 

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