You are on page 1of 7


International business is a term used to collectively describe all
commercial transactions that take place between two or more nations. It
refers to all those business activities which involves cross border
transactions of goods, services, resources between two or more nations. It
can be either the buying (importing) or selling (exporting) of goods or
services on a global basis. In the achievement of the strategic objectives of a
self-reliant and dynamic economy, the government considers a substantial
expansion in export earnings to be of great importance. Exports enable the
country to pay for critical imports, new technological inputs and setup the
pace of economic development.
International trade necessarily requires interaction with governmental
agencies, and most all governments wish to expand their country’s role in
international trade, entrepreneurs can look to governments themselves for a
great deal of information. There are some non-governmental resources to
expand the knowledge of entrepreneurs about international trade
• The federation of international trade associations provides
portals to trade leads, market research, a global trade shop and
even a job bank.
• Search engines such as google or yahoo provide a huge
database of information that will require selectivity to retrieve
the most helpful information.
• The large network of international trade market places,
providing trade leads and new business contacts.

For an Indian entrepreneur to go to international business is not easy,
they has to cross many hurdles. India is a small player in overall global
exports. Exports from India value wise are less than 0.8%. Exports from
India since last two years are growing by 20% despite low growths in
agriculture and industry. The external factors that affect lower growth rates
• Recessionary conditions in USA.
• Low or no growth in Japan.
• Distributing conditions in west Asia.
• Progressive strengthening of rupee against dollar.

INFRASTRUCTURAL SETUP . lack of cheap power supply. The export of services is growing where Indian entrepreneurial talent is seen in action. • Growth in GDP and per capita incomes.There are constraints which an entrepreneur has to face. • Lots of Indian entrepreneurs are taking up lead in establishing knowledge based industries in various parts of globe. • Appreciating Indian rupee. • Indian entrepreneurs are developing niche products. country has large reservoir of entrepreneurial talent and efforts are under way to go international. • In the new knowledge industries like IT (Information Technology). BPO (Business Process Outsourcing). In recent past the result of growing economy is seen due to these steps. privatization and globalization. They are: • Price competition in the global market due to various reasons. Thus. • There is positive outlook and supporting ambiance for international trade and industry. inadequate physical infrastructural such as roads and efficiently run ports. They are: • Indian global trade is increasing at 20% growth since last 3 years. The high growths of exports are expected by the agricultural and agri- products sector and growing service. • The percentage of Indian trade in global level is 0. Every effort is made by governments and industry to go to global markets. the export credit is still costly. R&D (Research & Development) and BT (biotechnology) the progress of India is impressive at global level.8% is low. • Indian entrepreneur has to meet the challenges of continuous deficiencies on the infrastructural front especially lack of regular quality power. Though credit rates are coming down for the competing countries. • High cost of funds and high service charge of banks. During the reforms period India has opened up with its policies to help liberalization. India is on high export growth trajectory making many entrepreneurs to look for global markets. Government of India is giving boost to export from time to time in its exim policies. Particular focus is on agro exports.

Indian entrepreneurs are also choosing joint ventures. Foreign investors and technology providers are helping Indian entrepreneurs to take up new ventures in Information Technology and other manufacturing activities. cardamom. • Board of trade. They are: • Export promotion council – promotion of specific commodities or groups. INCENTIVES . It takes careful and fairly complex consideration. For about past one century trade and manufacturing business exist with European countries. before a business decides to open operations abroad and become a multinational corporation. Since then. silk. Since independence India started exporting to many countries agri-produce. NATURE OF INTERNATIONAL ENTREPRENEURSHIP International entrepreneur is doing business across his or her national boundaries. silk. coir. manufacturing or joint ventures and development of business. In addition. • Commodity board for coffee. the choice of foreign location should be based on a thorough scanning of the environment in several candidate countries. basic minerals and metals. Advisory council of trade zonal advisory committee. Historically India is known as an exporter of specialized items like spices. India adopted globalization since 1991. handicraft and handloom. Even today Europe remains big partner of trade with India. The future commercial strength of India depends on the ability of Indian entrepreneurs to take advantage of large markets that are developing outside India. rubber. Further. Indian companies are going all over globe for business and industry. tea. • The Indian Institute of packaging. incentives and subsidies are provided for an entrepreneur to encourage them. opening sales offices. • The Indian Institute of foreign trade. • Export Houses and trading houses. The activities that are necessary to satisfy the customers that an entrepreneur targets across another countries involving exporting goods and services. subsidiaries. The company needs to ask what advantages are related to expanding abroad and how foreign operations should be run. The government has setup adequate and appropriate institutions mainly to assess export promotion in particular. manufactured items and services. acquisition and strategic partnership to grow faster. handicrafts to many countries.

management. BOUNTY The term bounty denotes a bonus or financial aid given to an industry to help it to compete with other units in country or in a foreign market. consultancy. attaining cost advantage of large scale manufacturing. joint ventures. SUBSIDY Subsidy denotes single lump-sum which is given by a government to an entrepreneur to cover the cost. It is a motivational force which makes an entrepreneur to take a right decision and act upon it. IMPORTANCE OF INTERNATIONAL ENTREPRENEURSHIP The importance of Entrepreneurship may be summarized as faster development of business. The choice of one of above alternates by an entrepreneur depends on: • Target market environment. subsidies and bounties. • Dynamism of entrepreneur and his team. foreign direct investments and strategic partnerships. Roughly 99% of the total world market for all products and . • Resource availability at competitive prices. India meets global export. • Competitor activities. The objective of incentives is to motivate an entrepreneur to set up a new venture in the large interest of the nation and the society. only a small fraction that is less than one percent. The options are licensing. The options are different levels of ownerships and controls. Use of cheaper resources to get market advantages. • Advantage of flexibility and resilience to meet market changes. • The market potential. Broadly. • Decision regarding marketing mix. • Policies of government. TYPES OF PARTICIPATION International entrepreneur has different choices of engagement of his new venture. incentives include concessions. earning money for the expertise in the areas of technology. accessing large markets. manufacturing and the like. The term incentive means encouraging productivity. franchising. Economic incentives (both financial and non-financial) push an entrepreneur towards decisive decision and action. today. • Customers trust in the brand.

BT and BPO industries are helping Indian entrepreneurs to grow global with his skills and less capital on hand. • Market access to number of advanced countries without discrimination or trade restrictions like. Information technology has given a boost in this direction. Some of the examples of international entrepreneurship are: • Co-founder of Sun Micro Systems is Vinod Khosla in USA. joint ventures. INDIANS IN INTERNATIONAL VENTURES Indians are making headlines in international entrepreneurship in many countries in last two decades. WTO has helped in the areas of: • Removal of trade for Indian entrepreneur is outside India. • Founder and creator of Hotmail is Sabeer Bhatia in USA. process in the industry and management skills. • Creator of Pentium chip is Vinod Dahm in USA. • Low tax regime across globe. • Growth of service industries. WORLD TRADE ORGANIZATION AND ENTREPRENEUR In the reforms period that is from year 1991 onwards Indian entrepreneur is moving to international entrepreneurship in a big way taking advantage of the trade liberalization and development of global trade across borders. • Lord Swraj Paul established Caparo group in UK. IT ventures needless capital and results are seen faster. • Many software companies are started in USA and UK by Indian entrepreneurs. To achieve growth potential the large growing markets in India attract an entrepreneur. IT companies need in-depth knowledge of IT. two young software entrepreneurs recently made a headline for their entrepreneurial work in camera phones. . Indian entrepreneurs have made a mark in this area in USA. etc. For example. Indian companies and Indian entrepreneurs are also meeting the global competition by acquisitions. The modern communication and growth in IT. • Agreements on TRIPS (Trade-related aspects of Intellectual Property Rights) and TRIMS (Trade Related Investment Measures). The group has large interests in steel companies in many countries. This is seen more in the areas of information technology. business process outsourcing and pharmaceutical industries. large duties or procedural hassles.

• To reduce risk in a new venture. training and market expansion.EXAMPLES • Government of Punjab agricultural department and Mahindra group signed an agreement for ‘contract framing’. With the help of international trade the countries are able to acquire commodities. • Improve production technologies. • Autonomy – the loss of autonomy to an entrepreneur. CONCLUSION Over the last decade the role of entrepreneurs in international business has become a key emerging issue. which they cannot produce locally due to the non availability of factors of production in sufficient quantity and due to high costs of production. • To reduce competition. • Incompatibility of the partners .the cultural differences between the partners. The global economy seems to be recovering after the recent economic shock. was hit in the latter part of the global . improved performance. The Indian economy. • Get access to local distribution network. On the negative side the strategic alliance has following pitfalls: • Free access to information make trade secrets goes to others. • Similar ‘contract framing’ agreement was signed by two companies ICICI and Hindustan Lever for growing Wheat and Basmati Rice in Haryana and Madhya Pradesh. It has also resulted in the improvement in means of transport in all parts of the world. • Advantage of additional finance resources. • Rallis and ICICI have signed for big retail chains ‘Food World’. • Large-scale. Strategic partnering helps an entrepreneur to go international by combining strengths of allies and direct their competitive energies towards common rivals in the market place. however. • Changes in market or products may bring the strategic partnership to a close. • Access to management know-how and know new fields of manufacturing and services. improve quality. The strategic alliance helps an entrepreneur in: • Getting access to new markets in a new country.

lower capital outflow and corporate restructuring. followed by lower exports. India is expected to become the third largest economy in the next few decades contributing to more than half of world’s manufacturing output. India is now following different development strategies and doing better in key areas. Due to the strong position of liquidity in the market.recession and the real economic growth has witnessed a sharp fall. . large corporations now have access to capital in the corporate credit markets.