Riassunto analitico
Thanks to new technologies and the effects of globalization, international markets are more open than ever before. In the face of an increasingly interconnected world, many firms attempt to expand into foreign markets. This phenomenon, called Internationalization, is a topic researched in a multitude of views. Firms go global because of the business rewards that are supposed to be greater for the global market rather than the domestic one. Seen as one of the most promising trends, emerging markets are building high momentum by offering umpteen opportunities for scaling economies. Emerging markets, given their potential, will top the internationalisation list for an internationalization process. Among all, India is the most prominent emerging market for investing in relation to the robust growth in manufacturing, the business friendly reforms, the infrastructural development and political stability. According to the International Monetary Fund (IMF) World Economic Outlook of April 2016, India ranks fourth among the list of the world’s fastest growing economies with a growth projection of 7.7% for the fiscal year 2018. Foreign companies should be prepared to face varying business and economic conditions across India’s now 29 states and 7 union territories. Power and decision-making are decentralized in India, with differences at the state level in political leadership, quality of governance, regulations, taxation, labor relations, and education levels. With regard to regulations, Foreign Direct Investment (FDI) policies in India has played an important role in the development of the economy, enabling India to achieve a certain degree of financial stability, growth and development through time. In May 2014, the Bharatiya Janata Party (BJP) won the world’s largest democratic election, defeating a Congress-led coalition that had been in power for the past decade, and consequently Narendra Modi was elected Prime Minister of India. In 2017, Prime Minister Modi has enjoyed political momentum buoyed by his Bharatiya Janata Party’s victories in state elections, holding a majority in the lower house. The successful passage in 2017 of a constitutional amendment to establish a unified national Goods and Services Tax (GST) to replace the complex web of national and state-Government taxes also incentivized the FDI inflow to India. Until a few years ago, India’s foreign policies were essentially defensive, but now apprehending the need for relaxation in FDI, the Government has made various changes to the FDI policy to open up the economy and to make India an attractive destination for overseas investors. Furthermore, the relaxation of norms for investments allowed Indian companies to issue partly paid equity shares and warrants to foreign investors. India’s potential for economic growth is between 7-8% in the immediate future and 8-9% in the medium term. It should be possible to achieve a growth of 7% within one year from now and it could be taken above 8% in the next three years. In the long term, we could aim for a growth of 9% going forward for at least ten years. India is actively contributing to the overall increase in global economic growth in the present years, representing a great opportunity for internationalization for global firms.
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