India Analyses of International Business Situation

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Analyses of International Business Situation
A. Economic, political and legal analysis of the trading country 1. Economics:
India's economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of support services. India has recently emerged as a vibrant free-market economy, rejecting its previous socialist path along with the old inefficient centralized bureaucratic state. In 1991, when the Congress party gained power under the leadership of P.V. Narashima Rao, the government liberalized the number of industries open to foreign investment, loosened approval requirements and allowed majority foreign equity ownership. The economy has posted an excellent average growth rate of 5-7% since then, reducing poverty by about 10 percentage points. Management guru, Peter Drucker sees India as an economic powerhouse, and the risen GDP of 8.4% in the last quarter of 2003 supports 7

his argument. India has large numbers of well-educated people skilled in the English language. The country has recently become is a major exporter of software services and software workers, and the information technology sector leads the strong growth pattern. With a world changing from an industrial to an informational economy, India is bound to play a monumental role in the future of the global industry. (CIA World fact book, History of Nations- India, http://www.livinginindia.com/archives/)

2. Government:
India’s government was formed in 1947 after the country gained its independence from the Imperial Britain. The Indian constitution adopted in 1950 was modeled after the United States constitution. Under this constitution, India is a federal republic, meaning it’s a representative democracy with power divided between the state and federal government. There also three branches including a bicameral legislature, executive branch, and judicial branch. Unlike America, the head of State and the head of government in India...
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