What is your assessment of India as the next economic engine after China? What are the dos and don

A Critical Research on the Indian Endeavor to Achieve Regional and Strategic Global Dominance in Foreign Direct Investments (FDI

Table of Contents

Title Page i

Introduction 1

Background of the Problem 1

Significance of the Study 3

Objectives 4

Review of Related Literature 5

Political Risk 5

Domestic Politics 6

Foreign Policy 7

Economic Risk 10

The Economy of India 10

The Fiscal Policy 13

The Monetary Policy 15

The Business Environment 18

Foreign Investment Policy in India in Relation to China 19

p Operational Risks in Doing Business in India 21

Comparative Analysis 21

The Political Risks of India versus China 22

The Economic Risks of India versus China 24

The Business Environment of India versus China 27

Conclusion and Recommendations 29

Conclusion 29

Details to Consider When Doing Business in India 30

Recommendations 31

References 33

List of Figures

Figure 1 : India 's Bilateral Trade with Africa (US bn ) 8

Figure 2 : India - Repurchase Rate ) 16

Figure 3 : India - Wholesale Price Inflation , Weekly (y-o-y ) 17

List of Tables

Table 1 : The Economic Activity of India 12

Table 2 : The Fiscal Policy of India 14

Table 3 : SWOT Analysis of the Politics of China 23

Table 4 : SWOT Analysis of the Economy of China 25

Table 5 : SWOT Analysis of the Business Environment of China 27 Introduction

India , under the administration of Prime Minister Manmohan Singh has steadily become a favorable area for foreign direct investment (FDI The relatively huge market size of the country together with its positive cost structure and favorable macroeconomic climate have paved the way for foreign investors to invest highly within the aforementioned . The vastly educated workforce of India together with its strong management talent and fluency of the English language have also made the country gain its competitive advantage against its Asian neighbors (Business Monitor International C , par .35

Not until recently , the country has expressed its endeavors to surpass China in terms of FDI and eventually its leadership in the global market . Such an attempt appears to be highly reasonable as although India 's FDI 's inflows are relatively small , the aforementioned has been perceived by the international business community as more skill-intensive technology centered , as it focuses more on information and communication technology (ICT and service oriented , as it is notable in terms of its investment in its services sector . Within the fiscal year of 2006-2007 , the FDI of the country tripled to US 16 billion , hence paving the way for India to attain an investment target of US 30 billion for the fiscal year of 2007-2008 (Business Monitor International C , par .36

Background of the Problem

Despite the perceived competitive advantage of the country in regard to the race for FDI attraction , there are a number of criticisms telling that India is not capable of winning the race to attract FDI investments by the year 2010 (Dasgupta , par .1 . Foremost of the reasons that are noted are its weak domestic politics that resulted from the faction that came about from the...