Profil de pays global Inde

INDIA

Table of contents

Introduction.................................................................................................... 5

Global country profile.................................................................................... 5

Political factor........................................................................................... 5

Economic factor......................................................................................... 5

Social factor............................................................................................... 6

Technological factor.................................................................................. 7

Environmental factor................................................................................. 7

Legal factor................................................................................................ 7

Human resources areas 8

Conclusion.....................................................................................................

Introduction

Global country profile

Political factor

India is a republic which consists of 25 states and 7 Union territories. The President and Parliament have legislative power. India is the world's largest democracy because of huge variety of parties.

Economic boom in India was preceded by a series of changes in policy: power decentralization, guarantees for business, development of the contract system, management and mitigation of risks, international competitive bidding, etc.

Level of Indian bureaucracy is the highest in Asia (9.21 out of 10 (Political & Economic Risk Consultancy, 2012)), the country takes 85th place out of 175 in terms of corruption (Transparency International, 2014).

Instability of domestic policy also depends on a geopolitical factor: permanent problems with Pakistan lead to acts of terrorism on the western border of India.

Economic factor

From 2003 to 2011 India experienced steady growth in development more than 8% per year. During this period poverty halved (OECD, 2014). The unemployment rate dropped to 5.2% (Ministry of Labour and Employment of India, 2013).

Table 1. Macroeconomic indices (annual percentage changes)

2013 2014

GDP, at constant prices 5 5,4

Inflation 6,9 6,9

Consumer price index 9,5 7,1

Wholesale price index 6 4,3

Short-term interest rate 7,6 7,8

Long-term interest rate 8,5 8,6

Fiscal balance (per cent of GDP) -7 -6,9

Current account balance (per cent of GDP) -1,6 -1,7

Source: OECD Economic Surveys, 2014

Enormous potential of the Indian economy contains in the industrial sector. However, the government strictly regulates activities: investments in certain manufacturing segment are limited; this factor does not take advantage of economies of scale. Thus, the Indian economic environment is more favorable for small business than for large ones. In this regard, the production of goods in India is below the average international level.

The retail sector is highly fragmented with inefficient distribution. Foreign investment is permitted up to 51% for particular brands.

Growing purchasing power of the middle class contributes to housing progress in India, as well as to development of the automotive industry.

Transport and energy infrastructures are imperfect; they often limit the growth of other sectors and create "bottlenecks". The Indian economy needs investment in power grid facilities, in the railway network, in construction of roads, improvement of urban services (drinking water, waste collection and disposal, sewage system).

Banking sector is another area where foreign presence is limited although several foreign banks have already received business licenses.

In order to create a competitive international environment for exporters and FDI at the beginning of 2000 the Indian government created special economic zones, which have highly developed infrastructure and lower tax burden. However, in these areas import of raw materials and components were not exempted from taxation (unlike China), so it was not possible to achieve the same results as the neighbor did.

Indian companies also have their own features. In the Indian economy there are huge conglomerates with local capital, many of them have a family foundation. This nature of the firms' origin may provoke reluctance of owners-managers to share control, thereby limiting foreign investors who can be mainly minority shareholders.

Social factor

The population of India is amounted to 1.25 billion; half of them are under 25 years old. The middle class in India is growing rapidly; about 100 million people live by the standards of the middle class in the United States. Although Hindi is the first official language and English is the second official language, there are 22 recognized languages and 1600 dialects.

India's population consists of many castes which establish a hierarchical order in groups. Every person has a fixed place in the social order which is unchangeable for whole life.

Over 4,000 years religion has dominated in life of the Indian family. Today Hinduism practiced for more than 80% of the population.

Cultural values

Individual and family. Clans are a feature of Indian culture. The family has a vital role, family members are mentally very close to each other, people look for security and prestige

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