Purchase of existing assetsQuick entry, local market know-how, local financing may be possible, eliminate competitor, buying problemsNew investment No local entity exists or is available for sale, local financial incentives may encourage, no inherited problems, long lead time to generation of sales or other desired outcomeParticipation in an international joint-ventureShared ownership with local and/or other non-local partner
Head of Education Promotion India, Education UK, SuchitaGokarn
PLANNING MODEL AND LIBERALISATION PRIVATISATION GLOBALISATION MODEL INDIAPresented By: Pankaj Jain, Naketa Aggarwal, Jatin Gupta, Umesh Soni, Ravinder Sandhu FA-1 (2010-2012) IIPM, Chandigarh
LPG New Economic Policy of 1991 / Economic Reforms of 1991Post Independence 1960’s – 1980’s 1990 onwards 1950’s Government Control Economic Reforms Adopted Socialism brought in by then Green Revolution P.M, Mr. P.V Government Sector Narsimha Rao and then Finance Increase in Exports Minister Mr. Manmohan Singh Agriculture Business Regulation
1. LIBERALISATION INDUSTRIAL POLICY 1991 2. PRIVATISATION DISINVESTMENT (50%-51% Transfer) 3. GLOBALISATION INTERNATIONAL TRADE (Export & Import of goods)INTERNATIONAL INTERNATIONALFINANCE MIGRATION(FDI’s , FII’s) (International students, Skilled workers etc.)
FDI - is Foreign Direct Investments i.e. a foreign companyhaving a stake in a public sector undertaking in a country fora long period and that company is called MultinationalEnterprise.FII - is Foreign Institutional Investors, i.e, foreign Investment Bankerslike Goldman sachs, Merrill lynch, Lehman bros etc...investing inindian markets......in other words buying indian stocks.....FIIsgenerally buy in large volumes which has an impact on the stockmarkets...
Why FDI ?Gain a foothold in a newgeographic market. Increase a firm’s global competitiveness and positioning. Fill gaps in a company’s product lines in a global industry. Reduce costs in areas such as R&D, production, and distribution.
Types of FDI EntryPurchase of New existing Prior investment Automatic assets Permission Route (FIPB) Participation in an international joint-venture 6
Why INDIASecond largestnaturalof software developers after the U.S.Abundance of group resourcesHas 6,500 companies on the at 300 million Exchange (only the NYSE haslists a middle class estimated Bombay Stock out of a total population of 1billionmore)Destination forlargest economy & second largest pharmaceutical industryWorlds fourth business process outsourcing, Knowledge processing etc.Second largest English-speaking, scientific,8%Growth over the past few years averaging technical and executive manpowerLow costs & Tax exemptions in SEZ StabilityLiberal, largest democracy, PoliticalTax incentives for IT , business process outsourcing and KPO companiesSecond largest emerging market (US$ 2.4 trillion)Skilled and competitive labors force& D facilities in India100 Fortune 500 companies have RHighest rates of return on investment
FDI Investment Sectors Cigar and cigarettes of tobacco I.T Coal, Roads & Highways Oil & Energy Diamond, Gold, Silver , Minerals Power sector Atomic minerals Pharmaceuticals & Electricity Chemicals Hotel, hospitals Atomic energy Real state Arms and ammunition Mining Lottery business Mobile Sector Betting and Gambling Automobile Aircraft and warships Telecommunication
Major InvestmentsCompanies Sector InvestmentWal mart,Marks Retail US$ 10 BillionIntel Corp. I.T US$ 40 BillionBritish & cairn Oil & Energy US$ 2 BillionEssar power Power sector US$ 2 BillionToyota Automobile US$ 10.51 BillionPanasonic Telecommunication US$ 200 million
“An institution established outside India, which invests in securities traded on the markets in India” Investments made by residents of a country in financial assets and production processes of another countryInstitutions like pension funds ,mutual funds, investment trusts, asset managementcompanies,nominees companies and incorporatedportfoliomanagers
Where they can… Under securities such as shares, debentures and warrants issued by Indian companies which are listed /to be listed on the Stock exchange in India The schemes floated by domestic mutualfunds, traded on the primary and secondary markets. In government securities including treasury bills and debt securities of Indian companies.
ADVANTAGES OF FDIIncrease in Domestic Employment/Drop in Increased Productive efficiencyunemployment due to competition from multinational subsidiariesInvestment in Needed Infrastructure. Increase in ExportsPositive Influence on the Balance ofPayments. Increase in savings and InvestmentNew Technology and “Know How” Transfer. Faster growth of output andIncreased Capital Investment. employmentTargeted Regional and Sectoral Consumer BenefitsDevelopment.
IIT is one of the most respected institutions in the world for engineering. But last year they only admitted 3500 new students, and 350,000 applied! What are the unlucky 346,500 students going to do?Lack of facilities Reservation System Cultural Experience Superiority Complex Value of the education higher abroad Liberal ArtsCareer opportunities
2004-05 -----------------------15,0002005-’06------------------------16,227 China-----------------67,7232006-’07------------------------20,000 South Korea -------62,3922007-’08------------------------23,500 Japan ----------------35,2822008-’09------------------------27,000 Taiwan ----------------20,0942009-’10------------------------32,000
business and management (22%), engineering humanities (2%) (19%) mathematicsAgriculture(2%) and computer science (9%)intensive English physical and life language (5%) sciences (9%)) health social sciences professions (5%) (9%) fine & applied arts (5%),
34% of Microsoft employees 13% of 38% of XEROX doctors in employees USA Indians 17% of 12% INTEL scientistsscientists in USA 28% of 36% of IBM NASA employees scientists