India

1. What is the climate for doing business in India? Is it supportive of foreign investment?

Answer: The purpose of the first question in each of the "Spotlight" cases is for the instructor to bring in current happenings in the country featured. The suggested answer below may be somewhat dated by the time you go over this in class but can be used as part of your discussion and as a point of departure for new material.

India is one of the world's largest industrialized nations, as well as being agriculturally self-sufficient. In recent years, however, India has been facing political instability and domestic crisis.

Specifically, the population is growing at a rate of about two percent per year and recent government attempts to control this population explosion have been

unpopular. As a result, the government's role has been more of public service, emphasizing birth control options.

Within India, regional parties are challenging the government to delegate more authority to the states. Particularly troublesome is the unending terrorism, such as the assassination of Indira Gandhi. Further, military challenges continue to face India, such as the on-going boundary disputes with China, Pakistan, and Bangladesh. Horrible earthquakes and floods also seem to periodically plague India.

Although the standards of material well being of many Indian people have increased, employer-employee relations have generally worsened. The unemployment rate is still quite high, and despite the directive "work hard or we'll find someone who will," the Gross National Product growth rate continues to stagnate. However, India's traditional practices of protectionism and regulation that have led to high prices and inferior goods are slowly being replaced by more liberal economic policies that allow for increased competition and the development of collaborative relationships with foreign firms. The Indian government now recognizes the importance of foreign investment...