INDIA. Investments. Internet and computing in India

Contents

Introduction 4

PART 1: INDIA 4

1. Foreign Policies 4

a) Foreign trade policy 4

b) Foreign policy development 5

c) Main point of the foreign policy 5

d) Features of the government's foreign investment policies and incentives offered by it 6

2. Investments 6

a) India's international trade: 6

b) Foreign investment framework 6

c) FDI 7

3. Factors favoring India’s productivity 7

a) Skilled Manpower 7

b) Huge market 7

c) Infrastructure inversion 8

4. Internet and computing in India 9

a) India: a fast-growing internet services market in years-to-come 9

b) Indian Users Habits (source: Boston Consulting Group Reports) 9

c) Cloud-computing services: fundamental aspects leading to its success 10

5. Threats and opportunities of India 11

a) Threats 11

b) Opportunities 11

PART 2: CISCO 13

6. Information about Cisco: 13

a) Cisco: global presentation of the company 13

b) Cisco India 13

c) New activities of Cisco India 14

d) Cisco: Innovation through acquisition 14

7. Strengths and weaknesses of Cisco 16

a) Strengths 16

b) Weaknesses 16

PART 3: IMPLEMENTATION 17

8. Localization 17

a) Some Cisco activities in Bangalore 17

b) Presentation of Hyderabad 18

c) Hyderabad instead of Bangalore? 19

9. Our decision 20

a) Reasons 20

b) Advantages and disadvantages 20

10. Teaming 21

11. Planning: Steps to the Hyderabad localization 21

Introduction

Capital: New Delhi

Money: Rupee (INR) = 0.02 USD

On the top ten of the economic superpowers in the world

Growth rate: 9.4% (2006/2007)

5.7% (2009) due to the crisis

10% (2010) one of the fastest country to face the crisis

8.1% (2013) according to forecasting

(lemoci.com)

For a longtime, India was part of the British colonies. When the county took its independence in 1947, the government advocated the economic liberalization. Thus, it has become a more capitalist system and has grown quickly.

PART 1: INDIA

1. Foreign Policies

a) Foreign trade policy

Since July 4 1999, Indian government has undertaken big and major reforms in foreign trade policy. The “ Foreign Trade Policy in 2004- 2009 in which incorporates the Export and Import Policy, 2002-2007 this effort to make of India a Globalized country continues with Trade Liberalization. This means that they will continue eliminating licensing, quantitative and different restrictions and others type of control and regulations for Indian exports and imports.

The import regime by itself is a big obstacle for their way to import those products released, prohibited, restricted or centralized. Not only this barrier make difficult to export but also other impediments make difficult to product go inside India.

Despite the elimination of some trade barriers that has being experienced in the last few years, India has increased in a significant number of different barriers, such as use of labeling and certification requirements.

Indeed, the India’s foreign policies are based on few points. First of all, India intents to have “cordial relations” with other countries (economic or trade accords, solve conflits, etc.) Moreover, the country advocates for “the equality in conducting international relations” and its independence thanks to its participation to the Non-align Movement or NAM.

b) Foreign policy development

The awakening of India foreign Policy is one of the main events in world economic issues, so Asia is particularly involve in a role in the world economics.

The economy policy in India is very open, the participation degree of India exportations in a International level is 0,888% and imports 1,024%, distinguished by the very high export growth.

The main trader partners of India in relations importations and foreign policy are the U.S, China, Belgium, Switzerland, United Kingdom, United Arab Emirates, Hong kong.

Currently at this time their new trade policy is create an environment of trust, simplify import procedures and reduce transaction costs at the same time, neutralize the impact of taxes and tariffs, facilitate and enhance the availability of technology and infrastructure in all economic sectors, create incentives for agricultural exports and minor forest products, duty free imports of some products.

Intention of make India a global manufacturing center by the creation of an Export Promotion Council of services.

Elimination of import restrictions on used capital goods, all export of goods and services exempted from services tax.

c) Main point of the foreign policy

- Equitable International Economic order.

- Active member nation s of the NAM, the group of 77 and the G-15

- Strengthening regional cooperation as a member of the south Asia Association for Regional Cooperation, established in 1985.

- Member of the emerging bloc ( BRASIL,RUSSIA, INDIA, CHINA )

- 2009 India sign an agreement to reduce tariff

- Financial helps to neighbor’s countries like; Nepal, Bhutanese, Bangladesh, Maldives and others.

- Relationships with Arab countries in the Persian gulf and North Africa.

- Preferential tariff agreement with Mercosur

- Agreement with Chile, preferential tariff.

d) Features of the government's foreign investment policies and incentives offered by it

 No government approval is required for FDI in virtually all the sectors/activities, expect fro a small negative list formulated by the government

 The government has formulated «Sector Specific Guidelines for FDI», wherein investment up to speciefeid sectoral caps are covered under the automatic route, with a few exceptions

 FIPB considers proposals foor foreign participation that do not qualify for automatic approval

 Decisions on all foreign investment proposals are usually taken within 30 days of submitting an application

 Free repatriation of capital investments is permitted, provided the original investment (on a repatriable basis) was made in convertible foreign exchange. Further, free repatriation of profits on capital investment is permitted, subject to payment of taxes and other specified conditions

 Use of foreighn brand names/trademark is permitted for the sale of goods in India

 Indian capital markets are open to Flls

 Indian companies are permitted to raise funds from international capital market

 Special investment and tax incentives are given for exports and sectors, including power, electronics, software and food processing

 «Single window» clearance facilities and ?investor escort services» are available in various states to simplify the approval process for new ventures

2. Investments

a) India's international trade:

- India's Merchandise Trade Turnover increased from US$95 to US$391 (from 2002-2008)

- India's export increased from US$44 to US$163 (the same period)

- India's import increased from US$51 bn to US$251 bn

- Share in the world merchandise exports in 2007 -1.04%; Rank – 26th

b) Foreign investment framework

The FDI regime has been progressively liberalize during the course of the 1990s (particularly after 2000), with most restrictions of foreign investment being removed and procedures simplified. With limited exception, foreigners can invest directly in India, either on their own or as a join venture.

Today, there are very few industries where foreign investment is prohibited. Moreover, investment ceiling, which are applicable in certain cases, are gradually being removed.

c) FDI

The government permits FDI on an automatic basis, except with respect to a small negative list which includes the following:

 proposal involving a foreign collaborator who has an existing venture/tie-up in India in the same field, and investments made by international financial institutions

 proposals outside the ambit notified sectoral policy/caps

 proposal for investment PSUs as well as for EOU/EPZ/EHTP/STP units for the automatic approval route, subject to compliance with certain prescribed parameters

 proposal for foreign investment, not covered under the automatic approval route, considered for approval by the government

Under the new norms, indirect foreign investment through an investing Indian company that is owned and controlled by Indian citizens or Indian companies is not considered for FDI. Where the investing Indian company does not meet any one of the conditions mentioned above, its entire investment is considered as FDI. However, in the event the company is a wholly owned subsidiary of the investing Indian company, the indirect FDI is limited to the FDI in the investing Indian company.

3. Factors favoring India’s productivity

a) Skilled Manpower

India's labor cost advantage is well understood, wage levels

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