Introduction
At almost every corner of the world, from the developed nations to the impoverished ones, a thriving Indian merchant is a common motif. Most of these Indian investors have a direct connection with colleagues or relatives inside India, making India a vital player in the global economy. India differs exponentially from most of the other global economic powers (Kar & Sen, 2016). The USA, most of the EU and the UK’s global economic might rely on the industriousness of their private companies, with just a few multinationals handling the bulk of its international business. On the other hand, China relies on nationalized companies that act on behalf of its government. For India, more than the bulk of its international trade depends on smaller companies and middle-level companies, thus creating a unique economic culture (Mishra, 2020). As this research paper will reveal, India’s international trade model’s unique approach of focusing on small businesses makes it versatile and resilient, which increases its propensity for success in the future.
Part I
The Economic and Culture Environment of India
India is a major player in the global market, both as a leading market and as a leading exporter of goods and services. The said nation has a population of over 1.33 billion people. For example, the USA has a population of about 0.38 billion, meaning that if the US population is deducted from India, the nation would still have over a billion people. Due to the vast population, the balance of international trade in India makes its importance slightly larger than its exports (Kar & Sen, 2016). However, India is still one of the largest exporters of labor, goods, and services in the world. The economic culture of India is convoluted due to the history of the nation. First, India is among the oldest global economic powers in the world with its international commerce going back for millennia. However, in the early modern period, India’s trade attracted colonists who ravaged and impoverished the nation.
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By the time the last colonist, the British left in the mid-20 th century, India was poor, war-torn, and with a famished population. After independence, India adopted an attitude of economic isolation that lasted until 1991 (Kar & Sen, 2016). During this period, there was limited international trade at a corporate level but Indian immigrants continued to thrive across all continents at an individual level. Arguably, the elongated isolation period is among the reasons why Indian international trade is dominated by individual entrepreneurs as opposed to large multinational companies. However, in recent years, Indian multinationals have also rapidly expanded and have attained almost 50% of the nation’s international commerce.
How India does International Business
Due to the unstructured nature of its international commerce based on smaller-scale trades, Indian international trade is convoluted and seemingly disorganized. For example, the main exports from India also double as its main import. Mineral fuel is the main important and export for India, although the nation imports three times as much mineral oil products as it exports (ITC, 2020). The same pattern replicates in jewelry, computers, and organic products, which are the other primary imports and exports for India contemporaneously. India’s international trade is also the subject of restrictions which continue to gradually relax since 1991 (Kar & Sen, 2016). The flexibility of Indian trade on a corporate level thus keeps on gradually expanding. Finally, as outlined by the nation’s history, international trade at a personal level is a valued tradition in India, and the nation is expected to continue rising as a player in global trade.
Part II
The International Business of Mergers and Acquisitions
As with the rest of the global economy, mergers and acquisitions are a common trend in India. Currently, there are three main drivers for mergers and acquisitions in India. The first is the common trend of international trade rivalries manifesting in the national economic scene (Pandya & Street, 2018). For example, the two leading global retailers, Amazon and Walmart have been competing to acquire Indian companies. The second driver is government disinvestment as the Indian government sells its stakes in local companies to private entities (Pandya & Street, 2018). The third driver of mergers and acquisitions is local companies in India joining hands to overcome financial hardships or gain a competitive advantage.
Corporate Social Responsibility
India is one of the richest nations in the world but also arguably the nation with the largest poor populations in the world. According to Dharmapala & Khanna (2018), the government of India faces a monumental burden for taking care of the poor and in 2013 it enacted the Companies Act which made corporate social responsibility compulsory in India. Further, India is a deeply religious nation whose national values include the affluent assisting the needy.
Workplace Diversity
Work diversity is a significant issue in India based on three main issues. First, there is gender-based diversity, a significant issue in India. Secondly, there is religious diversity with the Hindu religion being dominant (Kar & Sen, 2016). Within the Hindu religion, there is also the issue of classism. Finally, there is the issue of nationality-based diversity which involves foreign workers. The government of India has been working to limit discrimination based on these factors but the progress has been slow.
Leadership and Management
Leadership and management are among the areas that India has excelled at, both through a combination of management acumen and leadership talent (Kar & Sen, 2016). The nation provides a wide range of leadership courses that benefits the local population and attracts a vast number of international students.
Franchises Intellectual Capital
The vast majority of franchising in India involves the position of India as one of the largest markets in the world. Many multinationals profit by licensing their intellectual property to Indian companies who sell goods and services locally (Kar & Sen, 2016). India with a democratic nation with the rule of law, hence intellectual property has legal protection within the nation.
Innovation
India is one of the innovation centers in the world with its technology industry being highly developed. The fact that India recently attempted to land a craft on the other side of the moon reflects the innovative capacity of the nation. Further, innovative human talent in information technology is among the leading labor exports from India (Kar & Sen, 2016).
Business Ethics
Both the public and private sectors in India have a corruption problem despite the best anti-corruption efforts in the nation in recent years. Corruption has eroded business ethics leading to bribery and the cutting of corners to augment profitability (Gupta, 2017). However, government and judicial efforts provide hope for a better economic environment in the near future.
International Business Law
India is one of the founding members of the General Agreement on Trade and Tariffs (GATT), the precursor to the World Trade Organization (WTO) (Kar & Sen, 2016). The government is committed to its obligations under international law and follows the rulings and directions of international courts. Despite the private sector corruption indicated in the segment above, India has a robust judicial system and generally adheres to the rule of law.
Conclusion
As reflected by the research and analysis above, India is a powerful global economic power both as a market and as an exporter of goods and services. With a population of over 1.3 billion people, India provides a vast market for international marketers from the USA and the rest of the world. Similarly, India has a vast workforce that has traveled and settled to nations around the world. Finally, India is a vast nation whose industries churn out goods for local consumption and export. Noticeably, the type of goods that India manufacturers and exports are similar to the goods that the nation also important with mineral oil and electronics leading in this category. Another peculiarity if India is that unlike most other nations, over 50% of its international trade is dominated by small and medium-sized companies, and not large multinational or government entities.
References
Dharmapala, D., & Khanna, V. (2018). The impact of mandated corporate social responsibility: Evidence from India’s Companies Act of 2013. International Review of law and Economics , 56 , 92-104.
Gupta, A. (2017). Changing forms of corruption in India. Modern Asian Studies , 51 (6), 1862-1890.
ITC (2020), Trade Map. International Trade Centre . https://www.trademap.org/Index.aspx .
Kar, S., & Sen, K. (2016). The political economy of India's growth episodes . New York: Springer.
Mishra, S. (2020). Emerging Trends in the International Trading System: An Indian Perspective. Journal of Xi'an University of Architecture & Technology. 30 (2) Issn No : 1006-7930.
Pandya, V. U. & Street, L. (2018). Mergers and Acquisitions Trends—The Indian Experience. International Journal of Business Administration , 9 (1), 44-54.
