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CHAPTER 1INTRODUCTION
Introduction to the International business in India
The economy of India is the twelfth largest economy in the world by nominal value and thefourth largest by purchasing power parity (PPP). In the 1990s, following economic reform fromthe socialist-inspired economy of post-independence India, the country began to experience rapideconomic growth, as markets opened for international competition and investment. In the 21stcentury, India is an emerging economic power with vast human and natural resources, and ahuge knowledge base. Economists predict that by 2020, India will be among the leadingeconomies of the world. India was under social democratic-based policies from 1947 to 1991.The economy was characterized by extensive regulation, protectionism, and public ownership,leading to pervasive corruption and slow growth. Since 1991, continuing economic liberalizationhas moved the economy towards a market-based system. A revival of economic reforms and better economic policy in 2000s accelerated India's economic growth rate. By 2008, India hadestablished itself as the world's second-fastest growing major economy. However, the year 2009saw a significant slowdown in India's official GDP growth rate to 6.1% as well as the return of alarge projected fiscal deficit of 10.3% of GDP which would be among the highest in the world.India's large service industry accounts for 62.6% of the country's GDP while the industrial andagricultural sector contribute 20% and 17.5% respectively. Agriculture is the predominantoccupation in India, accounting for about 52% of employment. The service sector makes up afurther 34%, and industrial sector around 14%. The labor force totals half a billion workers.Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes,cattle, water buffalo, sheep, goats, poultry and fish. Major industries includetelecommunications, textiles, chemicals, food processing, steel, transportation equipment,cement, mining, petroleum, machinery, information technology enabled services and software.India's per capita income (nominal) is $1032, ranked 139th in the world, while its per capita(PPP) of US$2,932 is ranked 128th. Previously a closed economy, India's trade has grown fast.India currently accounts for 1.5% of World trade as of 2007 according to the WTO. According tothe World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exportsand imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and
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import was $143 billion. Thus, India's global economic engagement in 2006 covering bothmerchandise and services trade was of the order of $437 billion, up by a record 72% from a levelof $253 billion in 2004. India's trade has reached a still relatively moderate share 24% of GDP in2006, up from 6% in 1985. Despite robust economic growth, India continues to face many major  problems. The recent economic development has widened the economic inequality across thecountry. Despite sustained high economic growth rate, approximately 80% of its population liveson less than $2 a day (PPP). Even though the arrival of Green Revolution brought end to faminesin India,40% of children under the age of three are underweight and a third of all men andwomen suffer from chronic energy deficiency.
LOGISTICS MANAGEMENT – INTRODUCTION
Logistics management is that part of the supply chain which plans, implements and controls theefficient, effective, forward and backward (reverse) flow and storage of goods, services andinformation between the point of origin and the point of consumption in order to meet customers'requirements rather to the customers’ delight. A professional working in the field of logisticsmanagement is called a logistician. Logistics, as a business concept, evolved only in the 1950s.This was mainly due to the increasing complexity of supplying one's business with materials, andshipping out products in an increasingly globalized supply chain, calling for experts in the fieldwho are called Supply Chain Logisticians. This can be defined as having the right item in theright quantity at the right time at the right place for the right price and to the right targetcustomers (consumer); and it is the science of process having its presence in all sectors of theindustry. The goal of logistics work is to manage the fruition of project life cycles, supply chainsand resultant efficiencies. Logistics is concerned with getting (or transmitting) the products andservices where they are needed or when they are desired. It is difficult to accomplish anymarketing or manufacturing without logistical support. It involves the integration of information,transportation, inventory, warehousing, material handling, and packaging. The operatingresponsibility of logistics is the geographical repositioning of raw materials, work in process, andfinished inventories where required at the lowest cost possible.
Origin and Definition of Logistics:
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The term "logistics" originates from the ancient Greek "λόγος" ("logos"—"ratio, word,calculation, reason, speech, oration"). Logistics is considered to have originated in the military'sneed to supply themselves with arms, ammunition and rations as they moved from their base to aforward position. In ancient Greek, Roman and Byzantine empires, there were military officerswith the title ‘Logistikas’ who were responsible for financial management and distribution of supplies. The Oxford English dictionary
 
defines logistics as: “The branch of military sciencehaving to do with procuring, maintaining and transporting material, personnel and facilities.”The American Council of Logistics Management
 
defines logistics as “the process of planning,implementing and controlling the efficient and effective flow, and storage of goods, services andrelated information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.”
Objective of Logistics Management:
The primary objective of logistics management is to effectively and efficiently move the supplychain so as to extend the desired level of customer service at the least cost. Thus, logisticsmanagement starts with ascertaining customers’ needs till their fulfillment supplies. However,there are some definite objectives to be achieved through a proper logistics system. These can bedescribed as follows:
1. Improving customer service:
 An important objective of all marketing efforts, including the physical distribution activities, isto improve the customer service. An efficient management of physical distribution can help inimproving the level of customer service by developing an effective system of warehousing, quick and economic transportation, and maintaining optimum level of inventory.
2. Rapid Response:
Rapid response is concerned with a firm's ability to satisfy customer service requirements in atimely manner. Information technology has increased the capability to postpone logisticaloperations to the latest possible time and then accomplish rapid delivery of required inventory.
3. Reduce total distribution costs:
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