Case study on India ASM TOWHEED

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The case focuses on India, one of the most populated county, how they have managed to attract FDI

from each corner of the world and continue to grow their economy; despite the people of different

life style, language and ever changing political environment. It presents India has challenges to

maintain its political environment as the natives are aware of the social needs and the relation with

the neighbor county, on the other hand is a land of opportunity; with less bureaucratic complication,

highly educated workforce and competitive labor. My observation is: in recent years India has

adapted technologies, international language and lessened obstacles for investors dramatically

making them a role model for all other developing nations to follow.

1. As the case suggests, Inception used to be a very tough endeavor in India to achieve in late

1990s; i.e. it took PepsiCo three years just to set up a soft drink concentrate factory, and

Gillette, the U.S. razor blade company, had to wait eight years for its application to enter the

market to be accepted. Nevertheless, the exaggerating growth of Investment in recent years

($3B in 2000 to $27B in 2009) proves that they have strengthened and incapacitated

themselves firmly. The complex and lengthy “License Raj” system (Approval procedure of 80

different Government agencies) had disavowed. As a result Coca-Cola was able to get

permission for a 100-percent-owned unit in India in eight weeks, and Motorola received

clearance in two days to add a new product line. I would say nowadays, India has a good

environment to invest and certainly ready for more FDI.

2. English being the widely used language, usually MNC’s will look for a county where highly

educated human resource available and English is practiced as a national language. A MNC

does not need to spend a ton of money in training when the workforce is already aware

about the technicality and complicacy. MNC’s like IBM, Microsoft, Nokia Corporation, Sony

and Vodafone have raised their plan in India; the reason behind their investment is quality

engineers that India had produced in the recent past. As these MNC’s depend on highly

sophisticated technology it is imperative that the knowledge and the education level of the

employees match their wants, only cheap labor does not serve the purpose and that

explains the importance of highly educated human resource pool for MNCs.

3. The explanation of low per capita income of the country is correlated with the labor cost, as

Three-quarters of Indians live in over 600,000 villages. With the evaluation of in areas such

as medicine, engineering, and computer science MNC’s are already rushing to India.

However we need to consider the menial and semiskilled the industry need as well. For

example the agriculture and textile sector need workforce. As India can offer labor at a very

competitive price, it certainly is the cause of growing business further.