India is located in southern Asia. One-sixth of the world’s population (approximately 1 billion people) lives within the country’s 1.27 million square miles. Hindi is the dominant language in terms of number of speakers. India is a multilingual nation with more than 10 other languages spoken by 20 million people or more. English serves as the national language among the educated Indians. The Indian economy derives are depends on agriculture. India’s rural population presents a huge untapped potential for many marketers. Operates as a democratic republic - one party has dominated the government since independence in 1947. India was born of the partition of the former British Indian empire into the new countries of India and Pakistan. Many millions of Indians still live at the lowest level of subsistence, and per capita income is very low. Formerly, doing business in India is hard. For example, PepsiCo took 3 years just to set up factory, and Gillette wait 8 years for its application to enter the market. Lots of MNCs have complained there are too many barriers to effective operations. Mid 1970s, India changed its rules and foreign partners cannot hold more than 40% ownership in any business. Thus, some MNCs left India. Indian government has been lessening its bureaucratic rules in recent years, mainly those relating to foreign investments. Most of the investments come from US and nonresident Indians. The government realizes many MNCs making critical choice of investment between India and China; therefore they change the nation’s policies. Also, it can be seen foreign investments gave positive effect on the Indian economy. The disbandment of the “License Raj,” the climate for foreign investment has improved markedly. Yet, not everything is roses. Many MNCs are still reporting problems. Nonetheless, the Indian government’s new approach is helping a great deal and there are other attractions that entice MNCs to India. These include (1) a large number of...
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