2. • Market is physical place were buyers and sellers
gathering to buy and sell the goods.
• Market is a collection of buyers and sellers who
transact a particular product or product class. e.g.
grocery market, steel market, vegetable market, etc.
• There are five basic markets
– Resource market
– Manufacturer Market
– Intermediary markets
– Consumer markets
– Government markets
Concept of markets – economics view
3.
4. • Used to cover customer groupings
• Market is set of existing and potential buyers for a
defined product or service.
• Business Managers define markets on the basis of
– Need e.g. Security Market, Healthcare Market, Computing Market, etc
– Product e.g. Burglar Alarm market, PC Market, Calculator Market,
Apparel Market, etc
– Demographic e.g. Lifestyle Market, Youth Market, Kid’s Market, etc.
– Geographic e.g. Indian Market, Asian Market, Global Market, Asia –
Pacific Market
– Combination of the above e.g. Global Health Care Market, Global
Women Apparel (Woman wear) Market, etc
Markets – Managerial view
6. Terms associated with the concept of Market
• Market places – Physical (It is the place where one
goes for shopping)
• Market space (Virtual Market) – digital or virtual
• Meta markets – Convergence of suppliers of all
complementary products in the consumer’s mind.
Players in meta-markets are refereed as
metamediaries. It may be physical or virtual.
7. Key customer markets
• Consumer Markets (Companies selling mass goods and
services e.g. Soft Drinks, Cosmetics, All FMCG, CD, etc)
• Business Markets (Companies selling business goods
and services)
• Global Markets (Companies selling goods and services
in global market place. Additional challenges . Adopting
to different culture, system, currencies, environment is
key to it.)
• Non profit governmental markets (Companies selling
their goods to non profit / government organizations
like government agencies, NGO, universities, religious
institutes.)
9. Entry Modes at a Glance
• As an Indian Company
– by incorporating a company under the Companies
Act,1956 through
• Joint Ventures; or
• Wholly Owned Subsidiaries
• As a Foreign Company
– Liaison Office
– Branch Office
– Project Office
10. Liaison Office/Representative Office
• Liaison office acts as a channel of communication
between the principal place of business or head
office and entities in India.
• Liaison office can not undertake any commercial
activity directly or indirectly and can not,
therefore, earn any income in India.
• Approval for establishing a liaison office in India is
granted by Reserve Bank of India (RBI).
11. Project Office
• Foreign Companies planning to execute specific
projects in India can set up temporary project/site
offices in India.
• RBI has now granted general permission to foreign
entities to establish Project Offices subject to specified
conditions.
• Such offices can not undertake or carry on any activity
other than the activity relating and incidental to
execution of the project.
• Project Offices may remit outside India the surplus of
the project on its completion, general permission for
which has been granted by the RBI.
12. Branch Office
• Foreign companies engaged in manufacturing and trading activities
abroad are allowed to set up Branch Offices in India for the
following purposes:
– Export/Import of goods
– Rendering professional or consultancy services
– Carrying out research work, in which the parent company is engaged.
– Promoting technical or financial collaborations between Indian companies and
parent or overseas group company.
– Representing the parent company in India and acting as buying/selling agents
in India.
– Rendering services in Information Technology and development of software in
India.
– Rendering technical support to the products supplied by the parent/ group
companies.
– Foreign airline/shipping company.
13. Branch Office
• A branch office is not allowed to carry out
manufacturing activities on its own but is
permitted to subcontract these to an Indian
manufacturer.
• Branch Offices established with the approval of
RBI, may remit outside India profit of the
branch, net of applicable Indian taxes and subject
to RBI guidelines.
• Permission for setting up branch offices is granted
by the Reserve Bank of India (RBI).
14. Branch Office on “Stand Alone Basis”
• Such Branch Offices would be isolated and
restricted to the Special Economic zone (SEZ)
alone and no business activity/transaction will be
allowed outside the SEZs in India, which include
branches/subsidiaries of its parent office in India.
• No approval shall be necessary from RBI for a
company to establish a branch/unit in SEZs to
undertake manufacturing and service activities
subject to specified conditions.
15. Foreign investment is freely permitted
in almost all sectors. Foreign Direct
Investments (FDI) can be made under
two routes—Automatic Route and
Government Route.
Under the Government Route, prior approval of
the Government of India, Ministry of Finance,
Foreign Investment Promotion Board (FIPB) is
required.
16. Foreign investment in any form is prohibited in ….
• *Lottery Business including Government/ Private lottery, online
lotteries etc.
• Chit Funds
• Trading in Transferable Development Rights (TDR)
• Manufacturing of Cigars, cheroots, cigarillos, and cigarettes
(tobacco or tobacco substitutes)
• Gambling and betting including casinos*
• Nidhi Company
• **Real Estate Business or Construction of Farm Houses
• Sectors not open to private sector investments – atomic
energy, railway operations (other than permitted activities
mentioned under the consolidated FDI Policy)
* Foreign technology collaboration in any form including licensing for franchise, trademark, brand
name, management contract is also prohibited for Lottery Business and Gambling and Betting
activities
** Real estate business shall not include the development of town shops, construction of
residential/ commercial premises, roads or bridges and Real Estate Investment Trusts (REITs)
registered and regulated under the SEBI (REITs) Regulations, 2014
17. 100% Automatic route
• Agriculture & Animal Husbandry,
• Air-Transport Services (Non Scheduled Air
Transport Service / Helicopters services/
seaplane services requiring DGCA approval),
• Airports (Greenfield + Brownfield),
• Asset Reconstruction Companies,
• Auto-components,
• Automobiles,
• Biotechnology (Greenfield),
• Broadcast Content Services (Up-linking & down-
linking of TV channels,
• Broadcasting Carriage Services,
• Capital Goods,
• Cash & Carry Wholesale Trading (including
sourcing from MSEs),
• Chemicals,
• Coal & Lignite,
• Roads & Highways,
• Single Brand Retail Trading,
• Textiles & Garments,
• Thermal Power,
• Tourism & Hospitality,
• White Label ATM Operations and
• Insurance & Insurance Intermediaries.
• Construction Development,
• Construction of Hospitals,
• Credit Information Companies,
• Duty Free Shops,
• E-commerce Activities,
• Electronic Systems,
• Food Processing,
• Gems & Jewellery,
• Healthcare(Greenfield),
• Industrial Parks,
• IT & BPM,
• Leather,
• Manufacturing,
• Mining & Exploration of metals & non-metal
ores,
• Other Financial Services,
• Services under Civil Aviation Services such as
Maintenance & Repair Organizations,
• Petroleum & Natural gas,
• Pharmaceuticals (Greenfield),
• Plantation sector,
• Ports & Shipping,
• Railway Infrastructure,
• Renewable Energy,
18. Upto 100% Automatic route
• Infrastructure Company in the Securities
Market - 49%
• Insurance - upto 49%
• Medical Devices - upto 100%
• Pension - 49%
• Petroleum Refining (By PSUs) – 49%
• Power Exchanges – 49%
19. Upto 100% FDI permitted under
Government route
• Banking (Public sector) – 20%
• Broadcasting Content Services
(FM Radio, uplinking of news and
current affairs TV Channels)– 49%
• Uploading/Streaming of ‘News &
Current affairs’ through digital
media – 26%
• Investment by Foreign airlines –
49%
• Core Investment Company –
100%
• Food Products Retail Trading –
100%
• Mining & Minerals separations of
titanium bearing minerals and
ores, Its value addition and
integrated activities – 100%
• Multi-Brand Retail Trading –
51%
• Print Media (publications/
printing of scientific and
technical magazines/speciality
journals/ periodicals and
facsimile edition of foreign
newspapers) – 100%
• Print Media (publishing of
newspaper, periodicals and
Indian editions of foreign
magazines dealing with news
& current affairs) – 26%
• Satellite (Establishment and
operations) – 100%
20. Upto 100% FDI permitted under
Automatic & Government
• Air transport services (Scheduled Air Transport Service/ Domestic
Scheduled Passenger Airline; Regional Air Transport Service) – upto 49%
(auto) (Upto 100% under automatic route for NRIs) + above 49% and up to
74% (Govt.)
• Banking (Private sector) – upto 49% (auto) + above 49% and up to 74%
(Govt)
• Biotechnology (brownfield) – upto 74% (auto) + above 74% (Govt)
• Defence – upto 74% (auto) + above 74% (Govt)
• Healthcare (Brownfield) – upto 74% (auto) + above 74% (Govt)
• Pharmaceuticals (Brownfield) – upto 74% (auto) + above 74% (Govt)
• Private Security Agencies – upto 79% (auto) + above 49% and up to 74%
(Govt)
• Telecom Services – upto 49% (auto) + above 49% (Govt)
