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India 's Foreign Direct Investments

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Despite its deceleration over the past few years, India has become one of the most attractive places to outsource operations for corporations due to several important factors: Its young, well-educated low cost labor (Median age 27, according to the World Fact Book, CIA), the gradual economic liberalization and industry deregulation and their several technical skills are only to mention a few of the characteristics that make, along with China and certain other rising Asian nations, serious candidates for hosting big corporation’s foreign direct investments (Ranker, 2014). But India has had to come a long way to stand to where it is now. Several events throughout history have made the nation struggle, from religious to political issues, from …show more content…

Under this system, Nehru sought to strengthen the agricultural and power sectors, providing agriculture 45% and industry 5% of the resource during the first Five-Year Plan. It initially gave India an increase of 3.6% (Exhibit 10a) on its gross domestic product during the first five years. Following this the government isolated the country from foreign investment (as nationalist leaders feared a dependency on it) and trade in an effort to promote domestic production and as a strategy to reduce imports. Since the government had also created a complex system of licensing through the Permit Raj, resources became scarce, the complexity of its bureaucracy fostered corruption and became a reason of delay for companies. This made it hard for other important areas of the country to help increase its economic growth. Also, the government gradually came into possession of most of the private sectors: By 1956, it already had control of commercial banking, oil, insurance and some important resources such as steel and mining. The government, along with the large family conglomerates controlled almost all Indian economy and could arbitrarily choose how each industry would be ran; it regulated the where, the how, the how much and the whether or not a company would be given permission to produce. Price regulation and

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