Doing Business in India

There has been a wide range of untapped market in food retail of India industry.  Recently the India government has allowed FDI to do business in single brand retail and multi brand retail and it is a great opportunities for those foreign firms that have a desire to conduct their business in aboard. The paper will discuss about the National competitive advantage of India for FDI whether to invest in India or not by the help of Michael Porter’s National Diamond (1990). The information on this report is gathered from the various reports that was published by the government publication, world bank organization, industry news and internet resource etc.

In Michael Porter’s National Diamond, the determinant of the National Competitive are 1. Government and Chance,

• 1. Government and Chance,
• 2.Factor Conditions,
• 3. Demand Conditions,
• 4.related and supporting industries and
• 5.Firms, Strategy, Structure and Rivalry

The demand factor in Porter’s National Diamond will show the nature of the India market and what should the firm sets as priorities according to the refinement of the country. It is a major diagnose to examine before taking a step into any country.

The role of government

The role of government plays a vital role in doing business within it countries because it has the power to influence all the transactions that the firms are doing. The government has introduced several steps to enhance the growth of food processing industry. In order to further enhance investment in the food processing industry, several policy initiatives have been initiated in the recent past. A different kinds of regulatory reforms made by the Central and State Governments have raised most of the India’s economic. The  India government is very defensive the process food sector and acts as an activator  to assist the industries by offering the required environment for firms to grow and numerous incentives such as capital subsidies and tax exemptions. In order to assure the quality of food that are available on the market are safe and relieve for consumption and that the content food label is correct, the government has provided and implemented the standard of food laws on fair trade.. The government also aim its country to be a green sustainable environment for the next generation and invest a huge amount of money in the green project. However, scale and supply chain efficiency, deploying superior technology, product innovation and pricing, brand competitiveness and effective marketing are also need to address to be more attractive to FDI.

The   cost advantage in manpower can be used to set up large low cost production bases for domestic and export markets. Furthermore, most of Indian speak in English and it is the second largest county that use English as official language and one of the largest producer of English speaking graduates in the world. Besides, India has a lot of natural resources that could bring a competitive advantage to the food processing industry with its good climatic conditions and a large amount of output from its stock yard. On the other hand, there are unsufficient amount of electricity that would affect food industry such as cooling facilities for vegetables and frozen food, irradiation facilities and controlled atmospheric storage. Electricity plays an important role in food storage especially those that requires refrigeration, power outages may cause these materials to turn bad and result in huge business losses.

. India is a big country with over 1.10 billion consumer and there are many different ethnic groups and religions although Hinduism is the domain religion. In food process sector, there is still a huge untapped home market of 1000 millions consumers.. The Indian is changing lifestyle due to increasing nuclear families, urbanization and working women has modified the eating habits of the Indian consumers

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The major issue that adversely affects Indian economy is its corruption and most of it due to the social scheme and entitlement programmes which are disguise by Indian government .Legacies of group grievances and conflict resulting from Insecurity and human flight are additional challenges for the nation. The World Bank Group’s new Country Partnership Strategy (CPS) that is to develop in consultation with country authorities, civil society organizations, development partners, the media, the private sector, and other stakeholders will guide its support to India from 2013 through 2017. To cope with the International Financial Reporting Standards, India has changed its accounting system. Furthermore the GDP had increased about 9% per year in 2011 and there is a grand market opportunity for companies who want to extend their markets in India.

The role of government plays a vital role in doing business within it countries because it has the power to influence all the transactions that the firms are doing.The government has introduced several steps to enhance the growth of food processing industry. In order to further enhance investment in the food processing industry, several policy initiatives have been initiated in the recent past. A different kinds of regulatory reforms made by the Central and State Governments have raised most of the India’s economicThe  India government is very defensive the process food sector and acts as an activator  to assist the industries by offering the required environment for firms to grow and numerous incentives such as capital subsidies and tax exemptions. In order to assure the quality of food that are available on the market are safe and relieve for consumption and that the content food label is correct, the government has provided and implemented the standard of food laws on fair trade. To attract more foreign investment into the country, the government has allowed the foreign direct investment to own 51 per cent of equity in multi brand retail and completely 100 per cent in single brand retail. However, scale and supply chain efficiency, deploying superior technology, product innovation and pricing, brand competitiveness and effective marketing are also need to address to be more attractive to FDI.