International Business Case 2

1. India operated under a mixed economy during 1947 to 1990. Today it is moving toward a market economy. Impediments to completing this transformation have been opposition from employers, employees, and politicians who fear Chinese products flooding the market. Other obstacles are labor laws that make it difficult for firms with 100 employees to fire anyone, and other laws that make it so only small companies can make certain products.

2. Widespread public ownership of businesses and extensive government regulations might have impacted the efficiency of state and private businesses by slowing down and limiting what private businesses could do. It affected the rate of new business formation by discouraging people from wanting to start a business due to all the stipulations and quotas from the government. I think these factors affected the rate of economic growth in India during this time frame by making it hard to succeed in any business. People weren’t opening businesses and their economy was not growing.

3. Privatization, deregulation, and the removal of barriers to foreign direct investment would affect the efficiency of business, new business formation, and the rate of economic growth during the post-1990 time period by making it more appealing for the private business owner to start a new business. With fewer regulations to follow and less barriers the private business owner would have more freedoms with their business and would be more efficient because they wouldn’t have to wait for government approval for everything.

4. I think India is developing strength in software and pharmaceutical areas because they have such a large amount of resources and inexpensive labor. Success in these industries will help generate growth in other areas of the Indian economy by encouraging business owners to open up internationally.

5. I think that India represents an attractive target for inward investment by foreign multinationals selling consumer products...