Pest Analysis of India
Poter’s Diamond Analysis on FDI in India
Factor Condition; ➢ India is the second most populous country in the world. Some 68% of the population still lives in rural areas. A total of 550 million Indians are under the age of 25 and 350 million under 15 years (IBEF, 2008). By 2013, the net addition to the productive population (age 25-44 years) will be 91 million, or 33 %. The biggest benefit of this demography is the high consumer base [pic] [pic] ➢ The working age populaton is expected to rise by 83% by 2026. ➢ India is fifth largest economy in the world and has the third largest GDP in the entire continent of Asia. It is also second largest among emerging nations (based on purchasing power parity). ➢ India has world’s largest number of scientific and technological training centres after the USA.Many MNCs have set up R&D centeres. About 2000 recognized R&D institutes operate in India. ➢ India being a strongly regionalized country, most of them only know a small part of India which cannot representative of the whole country. The idea of “unity through diversity” (the national motto) and the complexity of the country make India difficult to tackle: languages, hundreds of dialects, and strong regional cultures and identities. Even within the Indian population, people do not understand each other fully (it can even be easier for a north Indian to sell his products in Dubai rather then in South India). ➢ The Indian government introduced new legislation on special economic zones. Companies that choose to invest in those zones are offered tax concessions such as a 15 years direct tax holiday and full exemption of import duties etc. ➢ India is fastest growing free market democracy in the world. ➢ The new policy of Government of India is, of couse, much better then old plicy. However, in comparison with the business environment in many other countries, India still is not very attractive in the eyes of foreign companies, despite the large and growing
Factor Condition; ➢ India is the second most populous country in the world. Some 68% of the population still lives in rural areas. A total of 550 million Indians are under the age of 25 and 350 million under 15 years (IBEF, 2008). By 2013, the net addition to the productive population (age 25-44 years) will be 91 million, or 33 %. The biggest benefit of this demography is the high consumer base [pic] [pic] ➢ The working age populaton is expected to rise by 83% by 2026. ➢ India is fifth largest economy in the world and has the third largest GDP in the entire continent of Asia. It is also second largest among emerging nations (based on purchasing power parity). ➢ India has world’s largest number of scientific and technological training centres after the USA.Many MNCs have set up R&D centeres. About 2000 recognized R&D institutes operate in India. ➢ India being a strongly regionalized country, most of them only know a small part of India which cannot representative of the whole country. The idea of “unity through diversity” (the national motto) and the complexity of the country make India difficult to tackle: languages, hundreds of dialects, and strong regional cultures and identities. Even within the Indian population, people do not understand each other fully (it can even be easier for a north Indian to sell his products in Dubai rather then in South India). ➢ The Indian government introduced new legislation on special economic zones. Companies that choose to invest in those zones are offered tax concessions such as a 15 years direct tax holiday and full exemption of import duties etc. ➢ India is fastest growing free market democracy in the world. ➢ The new policy of Government of India is, of couse, much better then old plicy. However, in comparison with the business environment in many other countries, India still is not very attractive in the eyes of foreign companies, despite the large and growing