Change in climate for foreign invesment in India

In 1991, India's Socialist economy hit its nadir. The pressures of the Gulf War had prompted a run on Indian foreign exchange reserves and forced Indian to seek loans from the IMF and World Bank to bail out the economy. Since then, economic and structural reforms have strenghtened India and made it more attractive to foreign investment. The convertability of the rupee, higher thresholds for foreign ownership, lower customs duties and the abolition of industry licencing have eliminated old investment stumbling blocks. These reforms have made India, says Thomas, an even better investment prospect than China, India's new rival.     

Financial Sector Reforms in Developing Countries: The Indian Experience

This study is based on the premise that the success/failure of financial sector reforms depends heavily on country specific factors and makes an attempt to examine these factors in the Indian context. The financial sector reforms analysed in this paper include the deregulation of interest rates, increasing competition and foreign ownership, and the introduction of financial supervision. We argue that an economic rationale for a gradualist approach to financial reform is that it is stability enhancing. Furthermore, we suggest that India’s complex political economy has resulted in a gradual approach to reform, and this approach has been successful along the dimension of banking stability.     

India's quiet economic revolution

Montek S. Ahluwalia, Secretary of the Indian Finance Ministry, is one of the major architects of India's program of economic liberalization. Since June 1991, he has worked on gradual reforms that have enabled India's once floundering economy to “turn the corner” where other countries trying to reform more rapidly have not. Based on budget figures that the Finance Minister, Dr. Manmachan Singh presented to the Indian Parliament on February 28, 1994, Mr. Ahluwalia reviews the government's reforms in the tax, public, financial, and industrial sectors, in trade and exchange policies, and also examines the progress India has made toward macroeconomic stability.     

Doing Business in India

On its independence in 1947, India was among the two most industrialized nations in Asia. Since then it adopted a “mixed economy” approach that hindered its national growth and the optimum utilization of its immense resources (both natural and human). To re‐establish itself as an economic force in the region, India liberalized its economy in early 1990s. The adoption of the “free market economy” model has created great opportunities for foreign businesses. This article provides useful information on the complex business environment, aimed to help foreign businessmen and investors to develop a good understanding on key background knowledge for being successful in India. It reviews Indian historical development, political structure and climate, international relations, and economy and foreign trade. India's infrastructure, legal framework, socio‐cultural set‐up, competitive environment, as well as market structure and potential are also analyzed. © 2001 John Wiley & Sons, Inc.     

Managing diversity: Impact of religion in the Indian workplace

Religious diversity in India stems from centuries of foreign traders and invaders ranging from the Mongols to the Mughals, French and British who came with their faiths. Religious diversity has created much political conflict and bloodshed in society at large (e.g. the recent blasts in Mumbai), but many differences have been reconciled in the workplace over time. MNCs seeking to engage in the Indian economy are attracted by the intellectual capital of this diverse nation. I examine the presence of religion in the Indian workplace through cultural values, beliefs and management practices and their impact on IHRM practices in managing diversity.     

Why India Lags Behind China and How It Can Bridge the Gap

Though India has been growing at six per cent annually since the late 1980s, it trails behind China, which has been growing at ten per cent per annum since 1981. The single most important factor explaining this difference is the relatively poor performance of Indian industry. Whereas the share of industry in China's GDP rose from 42 per cent in 1991 to 51 per cent in 2001, it remained virtually stagnant in India. By contrast, services grew rapidly in India, expanding from 42 per cent in 1991 to 48 per cent in 2001. With the information technology sector less than two per cent of the GDP, services growth was largely in the informal sector. Approximately 77 per cent of India's workers live in rural areas. To bring a large chunk of this workforce into the modern sector, India must achieve a much higher growth in the traditional, unskilled‐labour‐intensive industry. Growth in the information technology sector gives India an extra lever but cannot be the main engine of transformation. Therefore, the right approach is to walk on two legs: traditional labour‐intensive industry and the modern IT industry. Both legs need strengthening through further reforms. The paper suggests four specific reforms, three for industry and one for IT, necessary to achieve the transformation to a modern economy.     

印度对华反倾销非市场经济待遇——基于1994～2009年历史案件的统计分析

印度已成为全球对外反倾销和对华反倾销第一大国。文章对可获详情的134起涉华案件的非市场经济待遇状况进行了全面考察和统计分析,结果表明,印度对中国实施非市场经济待遇的主要依据是认定涉案企业存在政府实质性干预,确定正常价值的主要方法是印度实际支付或应付价格法和最佳可获得信息法,与同案市场经济待遇中国企业相比,非市场经济待遇对涉案产品反倾销税率的影响显著。     

Growth and poverty in India: emerging dimensions of the tertiary sector

The economic reforms of the 1990s have accelerated the tertiarisation of the Indian economy. New activities both in the manufacturing and tertiary sectors have emerged and also seem to have generated employment opportunities that did not exist earlier. Though many such opportunities are available only to the highly skilled and/or educated workforce, the indirect effects are of considerable significance in that they manifest the percolation effects of growth. In this context, the present study aims at examining the nature and composition of the tertiary sector's growth across the major states in India and relates such growth patterns to changes in poverty. On the whole, results are indicative that a large tertiary sector is not as superfluous as is often said to be. It has the potential to enhance economic growth and therefore contribute to poverty reduction.     

The Evolution of Consumer Product Safety Policy and Regulation in India

Consumer product safety in India is undergoing a series of structural reforms, encompassing general consumer protection and specific product safety regulation. This article critically examines the state of consumer product safety as it has developed since the adoption of the original Consumer Protection Act 1986 and Bureau of Indian Standards Act 1986 and on that basis puts forward a first reasoned analysis of the major reforms currently under discussion (the Consumer Protection Bill 2015) or recently passed but not yet implemented (the Bureau of Indian Standards Act 2016). The analysis is framed against the backdrop of a preliminary discussion of the constitutional architecture of India, which is in itself a source of complication in the development of coherent consumer policies. The picture emerging from this article shows that, while progress is being made, the field of consumer product safety in India is a difficult work in progress where policy and regulatory developments are hard to achieve incrementally, and structural reform come at the cost of fundamental choices the feasibility of which might prove difficult.     

Effects of direct foreign investment

There has been a considerable controversy in the Indian economic literature regarding the relative merits of direct foreign investment and official development assistance. No systematic study¹, however, is available on the effects of direct foreign investment in India. Therefore this article discusses this subject for the period 1951–66.     

Competing in the global marketplace: The case of India and China

As the world economy becomes increasingly integrated and globalized, U.S. companies face unprecedented opportunity, as well as challenge. In the global marketplace, China has made great strides in economic and commercial developments. The business community observes that China is becoming a manufacturing base for the world in providing quality products at low prices. As more business people turn their attention to China's progress, however, they are missing out on an important part of the equation: its neighboring country, India, which may deserve more attention than it has received. In this article, we attempt to present an argument that India could be a viable alternative in competition with other countries on the world stage. In spite of its problems, the Indian government and people are determined to increase Indian contribution to the world economy. As such, India may serve as its next frontier.     

Indian ocean rim trade bloc: Prospects and problems

This article advances the view that regional integration among ten nations along the Indian Ocean rim will have positive economic and political consequences for all the members. Emergence of this geographically large area with one-fourth of the human population will be good for financial markets and the global economy as well. Planned regional arrangements will offer major benefits to outsiders, for example, Gulf countries, by stimulating growth and enhancing market forces. Traditional enmity between India and Pakistan, however, and the economic and political adjustments that South Africa is undergoing after the first free election may prevent cooperation in the region, not to mention the fact that the area has deep economic problems with mass poverty and low per capita incomes. Problems aside, there are hopeful signs, both economic and political, that encourage the Indian Ocean rim nations to seriously consider establishing a regional trade bloc. For example, a substantial middle class is emerging in the area. Industrialization is slowly progressing, challenging the dominance of the agricultural sector. India, however, will have to take the initiative in the matter. The size of her economy and her pre-eminence as a regional political force equip India to play the key role in the establishment of a regional agreement in the area.     

中印构建自由贸易区的经济效应分析

中印构建自由贸易区会产生贸易集聚效应、规模经济效应、资源优化配置效应、相互直接投资效应和区域经济发展效应等正经济效应;同时也存在一些负经济效应,如,中国将面临一定的税收损失、印度产品会对中国市场造成一定的冲击以及印度在吸引外商直接投资上会与中国展开竞争等。但总体上中印构建自由贸易区对两国来讲是利大于弊的。     

Japanese foreign direct investment in India: An institutional theory approach

This article charts the history of Japanese corporate engagement with India. While there has been a profound historic relationship between the two nations, economic interaction is commonly portrayed in the context of geographical and psychic distance. As institutions set the rules of corporate engagement, we analyse the evolving regulatory and policy regime for foreign direct investment (FDI) in post-independence India and the corporate strategies of Japanese multinational enterprises (MNEs) in response to this institutional change. Using a firm-level dataset we show that the trajectory of Japanese investment in India broadly follows that of other nationalities of foreign firms. Differentiated responses to institutional changes are detected by industry. Our analysis reveals important instances of Japanese firm flexibility and pragmatism vis-à-vis the rapidly growing Indian market.     

Polarisation and Reversion under Competition: Profitability of Indian Firms

We analyse profitability dynamics in a large emerging economy, India, over the two-and-a-half decades since economic liberalisation began in earnest. We find that the average rate at which Indian firms reverted to normal profitability increased significantly, particularly for firms earning supernormal profits. In contrast, firms earning below-normal profitability have been marked by little reversion to normal. Inducing underperforming firms to improve their profitability is of great policy importance. The pattern in profitability dynamics of Indian firms in the early years was consistent with a polarised long-run profitability distribution. The polarisation tendency was reversed in later years, but the projected long-run profitability distribution has a substantial underperforming tail.     

Impact of institutional reforms and industry structural factors on market returns of emerging market rivals during acquisitions by foreign firms

This paper seeks to understand the joint impact of institutional reforms and industry structural factors on market returns earned by rivals in an emerging market during foreign acquisitions. We use a sample of 238 foreign acquisitions in India during the period 2004–2013 and find empirical evidence to support the notion that institutional reforms, foreign competition and business group competition positively impact the market returns of the rivals of acquired firms. Additionally, we find that the effects of foreign competition and business group competition on rivals’ market returns are shaped by the degree of institutional reforms in the industry, indicating that firms’ market returns in emerging markets during foreign acquisitions can be better understood through the incorporation of the joint role of industry structural factors and institutional reforms.     

Effect of Business Group Affiliation on Firm Internationalization: The Case of India Under Reforms

The authors investigate how diversified business groups influence the structural reform–firm strategy relations given its effect on strategic choice and its implementation in a large emerging economy: India. By integrating business group, industrial organization, and international business literature, the authors predict considerable differences in the exporting behavior of business group–affiliated firms on the basis of their market competitiveness and governance dynamics. The authors test their predictions empirically with longitudinal data of 6,119 Indian firms over a 21-year period starting from 1991–1992 to 2011–2012 and find support for most of the hypotheses. These findings suggest that knowledge of the heterogeneity within business groups are essential for understanding the response of business group affiliates in light of the progression of reform process in India. This study thus contributes to a more complete conceptual understanding of the strategic responses of promarket reforms of business group affiliates in emerging economies.     

中印纺织品服装出口竞争优势的实证研究

中国和印度劳动力资源都比较丰富,在劳动密集型产品出口方面有一定的比较优势。在纺织品服装贸易领域,印度一直对中国影响比较大。随着中国生产要素成本的不断提高、人民币升值的步伐加快,中国纺织产业国际竞争压力日益凸现。因此,借鉴印度纺织产业的成功模式,提升中国纺织产业竞争力正成为人们关注的热点。     

Doing business in South Africa

This survey of the South African business environment outlines the major transformations the country has experienced since 1994. The economy has been restructured, which enhanced fiscal and monetary discipline as well as domestic and global competitiveness. The general business climate has been improved, but continued progress requires (1) prioritization of social issues such as HIV/AIDS, employment, and crime and (2) accelerated privatization, market reforms, and clarity about black economic empowerment. Such changes may stimulate inflation‐rate reduction, foreign exchange stability, and an increase in foreign direct investment. © 2004 Wiley Periodicals, Inc.     

Indian economy and Indian private equity

India's gross domestic product has been growing at more than 8% in the past few years, making it the fourth‐largest economy in terms of purchasing power parity. According to a Goldman Sachs report, India could become the second‐largest economy in the world by 2050. The key growth drivers are investments in infrastructure, domestic consumption, and a hub for global outsourcing. This is further supported by growth‐oriented policies by the government. The favorable environment has led to the growth of the private equity market. India received approximately U.S. $17.5 billion of investments in private equity in 2007, making it the number‐one destination in Asia. Indian private equity has been mainly focused on providing growth/expansion capital to the company as compared to buyouts in the developed markets. © 2008 ICICI Bank Limited. Printed with permission.