ARMY INSTITUTE OF

BUSINESS ADMINISTRATION
SAVAR CANTONMENT,
SAVAR, DHAKA.

Term Paper on
International Business Environment of INDIA

COURSE TITLE: International Business Environment

COURSE CODE: IBE 3611

Submitted By Course Teacher

Md. Raihan Islam Murshida Rahman
ID: B5180B051
Lecturer
BBA- 5
Section: A Army Institute of Business
Administration, (AIBA)
Savar Dhaka
DATE OF SUBMISSION: November 15, 2020
 Letter of Transmittal

November 15, 2020

Murshida Rahman,
Lecturer,
Army Institute of Business Administration,
Savar Cantonment, Dhaka.

Subject: Submission of a Report on the International Business Environment of India.

Dear Sir,

With due respect, gratitude and appreciation, we would like to present this term paper on
“International Business Environment of India’’. We are pleased to submit the term paper on
which you have assigned us to submit as a partial requirement for the course– “International
Business Environment”; Course Code- IBE 3611. While preparing this report, we have taken
help from internet, books, class lectures and relevant sources.

We are very much grateful to you because you approved us to work on this report. Though we
have tried best, yet it may contain some unintentional errors. And I hope that you would be kind
enough to see embarrassments or mistakes that may have looked outside our knowledge. I also
hope, this report will come up with your expectation.

We would like to thank you for your encouragement and support which inspired us to work
enthusiastically. We will be glad to answer any kind of question related to this report and further
clarification if needed.

Yours faithfully,

Md. Raihan Islam

ID: B5180B051

BBA- 5,

Section: A
 Declaration of Student

We do hereby solemnly declare that the work presented in this Report has been carried out by us
and has not been previously submitted to any other University/College/Organization for an
academic certificate /degree.

The work we have presented, do not violate any existing copyright and no portion of this report
is copied from any work done earlier for a degree or otherwise.

We further undertake to ensure the damage arising from violation of the foregoing obligations.

Md.Raihan Islam

ID: B5180B051

BBA- 5,

Section: A
 Acknowledgement

We acknowledge with thankfulness to our course advisor Murshida Rahman, Lecturer, Army
Institute of Business Administration for his valuable counseling towards the improvement of
the report. Without his encouragement, this would have never been possible. We are
overwhelmed with gratitude to our course advisor as he helped us in terms of propulsion and
completing this term paper impeccably.

At the time of preparing this term paper, we have gone through different websites which help to
get acquainted with new topic. We are actually focusing on those topics which are important for
me to understand about this subject easily.

We have tried hard to gather all relevant documents regarding this subject. We don’t know how
far we have been able to do that. Furthermore, we don’t claim all the information in this term
paper is included perfectly. There may be shortcoming, mistaken opinion which are all mine and
we are responsible for those but we will try to give a better volume in future.

The report is prepared only to meet academic purpose not for any other reason.
 Supervisor’s Certificate

This is to certify that the work embodied in the accompanying report entitled “International
Business Environment of India” has been carried out entirely by the students as a research
scholar under my direct supervision and guideline and the students have fulfilled the
requirements of the regulations laid down for the 6th Semester Final examination of Army
Institute of Business Administration.

Murshida Rahman,

Lecturer,

Army Institute of Business Administration,

Savar Cantonment, Dhaka.

November 8, 2020
 Executive Summary

The present pandemic situation has adverse deep impact on Indian business. Domestically, the
impact of the corona virus pandemic COVID-19 could lead to slowdown in domestic demand.
This will result in erosion of purchasing power due to job losses or pay cuts and slow-down
effect of deferred demand will have a longer- lasting impact on different sectors, especially
where demand is discretionary in nature. India’s real GDP depleted to its bottom in over six
years during 4Q 2019-20. India’s growth for next year 2020-21 is forecasted in between of 5.3%
to 5.7%. The COVID- 19, or coronavirus, pandemic has revealed many weaknesses in the global
system. Despite our accumulated experience in crisis management, this virus has been able to
isolate us all in our homes. COVID-19 has caused severe disruption for the Indian economy. The
current corona virus pandemic could lead to a four per cent permanent loss to real Indian gross
domestic product (GDP). It is estimated for India’s Gross Domestic Product (GDP) growth rate
to 1.9 per cent for 2020-21. This will be the lowest after India recorded growth rate at 1.1 per
cent in 1991-92. The COVID 19 has disrupted major sectors, it’s clearly evident that various
sectors tourism & aviation, telecom, auto sector, transportation are most impacted sectors that are
facing negative repercussion of the present disaster. In the given situation, with all the retail
sectors shutting down their business the livelihood of the workers is at optimum risk. The
Government of many countries has given support to the employers to pay salaries to their
employees. The present study is undertaken to study the impact of COVID 19 in various sectors
considering the data which are secondary in nature, different appropriate statistical tools and
techniques are applied for analysis and conclusion. On the basis of finding recommendations are
suggested to overcome these adverse situations.
 Table of Content

Details Sub Topics Page No.

Letter of Transmittal i
Declaration of Student ii
Intro
Acknowledgement iii
Supervisor’s Certificate iv
Executive Summary v
1.1 Objective of the study 1
2
1.2 Values
Introduction

Literature Review 3
Literature Review

4
Methodology of the Study

Chapter 4 Introduction of India 5

Indian Economic Situation 6

INTERNATIONAL MARKETING AND 7

INDIA
11

A Comparison with Other Developing Countries 14

Analysis and Interpretation

18
Findings & Solutions

Chapter 5 Conclusion 20

Reference 21
INTRODUCTION

International trade refers to the trade across national boundaries. The growing volumes of
international trade and lowering of trade barriers have triggered debate and analysis on the
impact of international trade on economic growth of countries. Historical validation has revealed
that internationally active countries tend to be more productive than countries which only
produce for the domestic market. (Atoyebi et al, 2012). The relationship between international
trade and economic growth of a country can be either positive or negative, what determines the
nature of the relationship is the economic frameworks put in place to manage the trade.
Predominantly in our world today, there is hardly a country that can survive on its own without
engaging in trade relationships with other countries. The classical and neo-classical economists
have placed much credence of international trade as an engine of economic growth. (Yemi,
2014). The explicit goals of the economic reform strategy in India after 1991 with respect to the
external sector were to create a major shift in the momentum of export growth and to attract very
large inflows of foreign capital in the form of export oriented FDI. (Jayati, 2006). It is on this
note that the study intends to examine the relationship between international trade and economic
growth of India.

OBJECTIVE

The objectives of the study are to:

a) To study the short term and long-term impact on different sectors.

b) To study the short term and long-term recommendation for different sectors.

c) Examine the impact of international trade on economic growth of India.

d) To determine the relationship between the components of international trade and

economic growth of India.

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Originality/Value

The most important contribution of this paper is the overview it provides of the main papers
published on business and management in India for the 1991-2020 period: a period which
witnessed significant changes in the country’s economy. Our work has allowed us to identify the
journals which have devoted the most interest to this geographical region, which authors have
contributed the most, and which have been the most popular topics and findings. Keywords
India; Business and Management; Business Policy; Developing Markets; Literature Review.

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Literature Review

Zahool et al. (2019) examined the relationship between international trade and economic growth
using the OLS technique; their result shows an increase in import of raw materials, production,
employment and output is boosted up as a result of international trade. They thus concluded that
international trade plays an important role to enrich the economic growth of a country. Azees et
al. (2018) opined that international trade has a significant and positive impact on economic
growth. Their result shows a positive relationship between imports, exports and openness on the
economy. Atoyebi et al. (2019) is of the view that that there exists a positive relationship
between international trade and economic growth, in that both international trade volume and
trade structure towards high technology exports result in positively effect on the economy.
UNCTAD (2018) in their report on international trade and how it affects the poor in India stated
that; international trade although increases the income and employment of the economy, but the
gains have not trickled down to the poor. Giaruzazmi (2018) carried out a study of the Impact of
Trade Liberalization on Economic Performance of Members of OIC which liberalized their
economies since 1970’s. his findings posit that although the effect differs from country to
country, but on the average, trade liberalization has improved the countries’ GDP per capita in
the medium term, but the ratio of exports, imports and trade over GDP did not improve after
trade liberalization. Shreesh and Kishore (2019) examined the impact of international
liberalization on the Indian economy, using the Solow’s model as a basis of analysis.

Their findings point to the fact that international trade and openness of the economy increased
the overall level of output, leading to a faster economic growth. Jayati, G (2016) in her paper
titled Trade Liberalization and Economic restructuring posited that Trade Liberalization in India
were strategized with a view to creating major shift in the momentum of export growth, and to
attract large inflows of foreign capital, but these objectives were not achieved. Rather, it reduced
manufacturing investment due to greater threat of import penetration.

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Methodology of the Study

Planning

Making a Data
conclusion collection

Data analyzing

Planning: To do the study, we have to make a plan first that how we will collect the data, what
kinds of questioner we should make and what kinds of methods we should choose to collect
those data during this pandemic etc.
Data collecting: For this research, researcher used mostly secondary data. The secondary data
are collected from different sources such as internet, books, articles & public investigations.

We collected secondary data from some external sources, International newspaper and journals
too. Our secondary data sources are:

 National newspapers.

 Journals.

 Websites

Data Analyzing: After collecting all the data from both primary and secondary sources, we did
analyzation for finding improvement plan.

Make a conclusion: After the analyzation, we gave some recommendations based on our
findings and concludes.

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Introduction of India

India is the largest democracy in the world and geographically 7th largest in the world. It is also
one of the best countries for international trade. India is developing at a great pace and also has a
proud and rich culture. The Census Bureau of USA projected that by 2025 India will be the
largest populated country surpassing China. With majority of the population being in the age
group of 20-30 years, India has good educated and highly productive work force which enables a
significant edge over the rest of the developing countries India relatively has lower percentage of
senior citizens than its competitors like U.S and China further reducing the social expenditure for
the elderly.

India has a lot of natural resources. Iron ore, manganese, titanium ore, mica, petroleum, natural
gas, diamond and limestone are some of the abundant natural resources. The coal reserves in
India are the fourth largest in the world. 48% of India’s land is arable. Hindi is the most spoken
and English is the official language facilitating transactions with other countries.

Culture of India

India considers religion as important part of its culture. It is to be respected and given importance
to succeed in conducting businesses in India.

The Indians talk about punctuality but not everyone practices. It is better if appointments are
made in advance, may be a month. Patience is a key to deal businesses effectively in India.

Seniors manage their subordinates. People believe in self-esteem. So, companies and their
officials should deal issues with their employees by not criticizing them publicly but personally
with sensitivity.

The Foreign Trade Policy of India

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While others countries are still seeing India as a highly protectionist economy it is partially
becoming a rapid globalizer. India used to be a closed economy till the 1990s where the
restrictions were extensive on imports and stringent on the foreign investments.

But today the restrictions have been on imports have been eliminated and the norms on foreign
investments have been relaxed. The anti-dumping measures protect the trade and foreign
investment in retail trade is banned although it is slightly relaxed. Imports have been facilitated
to stimulate the country’s economy.

Indian Economic Situation

Slowdown in Indian Economy: The overall growth rate of the Indian economy was 6.5 percent
in 2017-18 as against 8.4 percent achieved in each of the previous two years. In 2018-19 Q1,
growth was at 5.5 percent compared to 8.0 percent in 2017-18 Q1. The slowdown is attributable
both to domestic as well as global factors. There has been a slowdown in the global economy
from 5.1 percent in 2010 to 3.8 percent in 2019. The growth of the advanced economies declined
from 3.0 percent to 1.6 percent respectively in these two years. The RBI followed a tight
monetary policy during most of 2018-19 to rein in on inflation which contributed to an increase
in the cost of borrowings. These along with reduced investment activity contributed to the
slowdown in the industrial sector. Overall industrial growth moderated sequentially in each of
the four quarters of 2018-19 and was at 2.9 percent compared to a growth of 8.2 percent in 2018-
19. During April–August of the current fiscal, industrial growth was at 0.4 percent. In August
2019, it was at 2.7 percent. A persistently negative growth in capital goods, negative growth in
mining and low growth of intermediates have contributed to this slow down. Depressed
sentiments, low profitability of corporate sector and tight monetary policy continue to constrain
investment, affecting industrial growth.

Higher Fiscal Deficit: Due to a combination of factors like industrial slowdown affecting tax
revenues and higher expenditure on subsidies on fuel and fertilizers, fiscal deficit shot up to 5.8
percent of GDP in 2018-19 as against a BE of 4.6 percent of GDP. The Budget for 2018-19 seeks
to resume fiscal consolidation with fiscal deficit at 5.1 percent of GDP.

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Inflation: Headline WPI inflation, though moderated from 9.56 percent in 2010-19 and 8.94
percent in 2018-19 was at 7.81 percent in September 2019. The all-India CPI inflation
(combined) has moderated to 9.73 per cent in September, 2020 from 10.03 per cent in August,
2020. Food inflation which has now moderated to 7.86 percent in September 2012 has
particularly been a cause of concern. Government and RBI have been taking administrative,
fiscal and monetary measures to contain inflation.

Balance of Payments: This has been under stress during the fiscal 2018-19. Trade and current
account deficit widened to 10.3 percent and 4.2 percent of GDP in 2018-19 respectively. The
capital inflows at 3.7 percent of GDP fell short of financing the current account deficit and the
rupee was under pressure. The sharp decline in the rupee during Q1 (April-June) of 2019
indicates among others, supply-demand imbalance in the domestic foreign exchange market due
to widening of CAD, slowdown in FII inflows and strengthening of US dollar in the international
market due to the safe haven status of US Treasury Bills. The rupee recovered marginally in July
2019. Rupee depreciated by 12.7 percent against the dollar in 2011-12 and by 7.8 percent in
September 2019 compared to March 2019. There was depreciation in the currencies of other
competing countries

INTERNATIONAL MARKETING AND INDIA

A PERSPECTIVE- As the globalization has risen and Indian markets became more and more
liberal by facilitating privatization, the importance of International marketing is on the rise.
Earlier to that, International marketing was not very talk of the town in India due to several
reasons. Firms only focused on domestic customers. After almost a quarter of century of post
globalization has passed, experts see it as the new order of internationalization of domestic firms.
Indian products and services have gained an important place in world market, new and
innovative means of marketing have helped firms to get more out of the box (Domestic Domain)
and tap the opportunities prevailing outside the domestic domain. This willing
internationalization has acutely helped in the growth and firm establishment of international
marketing in India. Earlier to that International marketing had a very minimal impact on India
firms, but now the situation has changed and keeps on changing adding new dimensions and
experiences. Likewise, one could say or observe the following in terms of International
marketing environment in India.

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Suggestions to Overcome Challenges of International Marketing-

As we have seen that International marketing is one of the most important areas of international
firms functioning in different countries. The challenges and risks listed above are severing in
nature; they seriously injure the intentions of international firms. The firs and the foremost step
in curbing the intensity of challenges and adverse situation can be resolved by conducting a
detailed marketing research by professional/experts of the field. Other than that; following steps
could also be considered for the same purpose-

1. International firm should develop a detailed and in depth understanding towards the targeted
market regarding all the dimension and possible challenges. Firm should list them out and
prepare resources and other tools to overcome initial problems/challenges.

2. International firms should develop sensitivities towards the cross culture of each countries
they are working. This understanding can be extremely helpful in dealing with challenges of
International marketing.

3. Hire people with greater experience and understanding in dealing with challenges of
International marketing, such people can be of very help in identification and dealing with
challenges subject of International business.

4. Conduct a detailed and objective research time to time related to current and potential
challenges in International market. Such researches can actually help in getting out of the
problems even before you get into them.

5. Develop people to people contact is a best strategy to avoid challenges in International

marketing and this contact can also give you first-hand information regarding the minute details
and specifications regarding the culture. Such an exercise helps in understanding the Dos and
Don’ts of a particular country.

6. Firms must do some ground work before venturing out into International marketing. Such
ground work includes studying about the marketing environment with details and working on
compliance and convergences rather than contrast. Apart from above mentioned steps one could
always relay on firsthand experiences and secondary research done on certain issues in certain
countries. Although the risks and uncertainties are tremendous in International marketing, yet

8|Page
number of firms getting into International business and pursuing. International marketing may
include many challenges and obstacle, but the way outs are also many and such uncertainties can
be managed with proper resources in hands and commitment towards a better growth of
company

Business Environment

The total merchandise trade of India has gone up to $ 757 billion in 2015 from $ 467 billion in
2005.The exports of India have increased from $ 179 billion in 2005 to $ 310 billion in 2015 at a
rate of about 11.6%. So, the Export to GDP ratio has also increased from 13.3% to 15.6%. India
has a share of 1.7% in global merchandise exports ranking 19th all over the world. The 2015-
2020 FTP plans to increase the services and merchandise exports to $900 billion by 2020.

India’s direction of exports is shifting towards the south i.e. the movement is towards the
developing countries. The share of Africa, LAC and Asia regions together increased greatly to
66% in 2014-2015 from 58% in 2004-2005 of which the share of Asia region alone increased
from 48% to 50%. The trade flows in the future are to be headed towards the countries which
have been developing. Petroleum products, precious and semi-precious stones, gold and other
precious metal jewellery, drug formulations, biological, RMG Cotton including accessories, iron
and steel and their products are the top export items. USA, UAE, Hong Kong, China, Saudi
Arabia, Singapore, UK and Germany are the most important export destinations.

India’s imports also have been shifting southwards towards the developing countries especially
Africa, Asia and LAC. The share of Asia, LAC and Africa regions in imports have increased to
74% in 2014-2015 from 41% in 2004-2005 of which the share of Asia had a tremendous rise
from 36% to 59% during the same time period. Crude petroleum, gold, pearl, precious and semi-
precious stones, petroleum products, coal, coke and briquette, telecom instruments, organic
chemicals, vegetable oils and plastic raw materials are the key imports. China, Saudi Arabia,
UAE, Switzerland, USA, Indonesia, Qatar, Iraq, Nigeria and South Korea are the top import
sources.

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The Total Trade in Services

The exports have been for $ 155.4 billion and the imports for $ 79.8 billion making the trade
balance $ 75.6 billion and a total trade of $ 235.2 billion. The software exports have increased at
a CAGR of 8% from 2009 to 2014.

Foreign Direct Investment

The inflow of FDI into India has increased from $ 37.7 billion in 2009-2010 to $ 44.9 billion in
2014-2015. Singapore, Mauritius, UK, Japan, Netherlands, USA and Germany are the top FDI
investing countries. Services sector, telecom, trading, automobile and computer software and
hardware are the key sectors in the FDI inflows.

The outflow of FDI from India has increased from $ 18 billion in 2009-2010 to $ 30.9 billion in
2014-2015. Netherlands, Singapore, Mauritius, British Virgin Island, Mozambique, USA, UAE,
UK, Switzerland are the top regional FDI outflows. Transportation, storage and communication
services, Manufacturing, agriculture and mining, wholesale retail trade, restaurants and hotels,
financial and business services are the main sectors in the FDI outflows.

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A Comparison with Other Developing Countries

Consider global trade – India’s share of world merchandise exports increased from .05% to .07%
over the past 20 years. Over the same period China’s share has tripled to almost 4%. India’s
share of global trade is similar to that of the Philippines an economy 6 times smaller according to
IMF estimates. Over the past decade FDI flows into India have averaged around 0.5% of GDP
against 5% for China and 5.5% for Brazil. FDI inflows to China now exceed US $ 50 billion
annually. It is only US $ 4billion in the case of India.

History of International Business in India

International Business in India looks really lucrative and every passing day, it is coming up with
only more possibilities. The growth in the international business sector in India is more than 7%
annually. There is scope for more improvement if only the relations with the neighboring
countries are stabilized. The mind-blowing performance of the stock market in India has
gathered all the more attention (in comparison to the other international bourses). India definitely
stands as an opportune place to explore business possibilities, with its high-skilled manpower
and budding middle-class segment.

With the diverse cultural setup, it is advisable not to formulate a uniform business strategy in
India. Different parts of the country are well-known for its different traits. The eastern part of
India is known as the 'Land of the intellectuals', whereas the southern part is known for its
'technology acumen'. On the other hand, the western part is known as the 'commercial-capital of
the country', with the northern part being the ‘hub of political power'. With such diversities in all
the four segments of the country, international business opportunity in India is surely huge.

Sectors having potential for International business in India:

I. Information Technology and Electronics Hardware.

II. Telecommunication.
III. Pharmaceuticals and Biotechnology.
IV. R&D.
V. Banking, Financial Institutions and Insurance & Pensions.
VI. Capital Market.

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VII. Chemicals and Hydrocarbons.
VIII. Infrastructure.
IX. Agriculture and Food Processing.
X. Retailing.
XI. Logistics.
XII. Manufacturing.
XIII. Power and Non-conventional Energy.

Sectors like Health, Education, Housing, Resource Conservation & Management Group, Water
Resources, Environment, Rural Development, Small and Medium Enterprises (SME) and Urban
Development are still not tapped properly and thus the huge scope should be exploited.

To foster the international business scenario in India, bodies like CII, FICCI and the various
Chambers of Commerce, have a host of services like:

 These bodies work closely with the Government and the different business promotion
organizations to infuse more business development in India.
 They help to build strong relationships with the different international business
organizations and the multinational corporations.
 These bodies help to identify the bilateral business co-operation potential and thereafter
make apt policy recommendations to the different overseas Governments.
 With opportunities huge, the International Business trend in India is mind boggling. India
International Business community along with the domestic business community is
striving towards a steady path to be the Knowledge Capital of the world.

It was evident till a few years back that India had a marginal role in the international affairs. The
image was not bright enough to be the cynosure among the shining stars. The credit rating
agencies had radically brought down the country's ratings. But, as of now, after liberalization
process and the concept of an open economy - international business in India grew manifold.
Future definitely has more to offer to the entire world.

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Indian Economic Zone

In this picture, we can see the Indian EPZ that means India’s main economic zones. Chennai,
Mumbai, Kolkata, Noida are the most important parts of her economy. It keeps the wheel of
economy actives but recently for Covid-19 the economy stopped for a while. Technically it not
stopped but it is now not like as it was before.

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Analysis and Interpretation

Impact on The Indian Economy

India's GDP growth for the current financial year is expected to tumble to 4.3 per cent in Q4. The
COVID-19 pandemic will impact in significant adverse economic crash globally.

Table 2 India GDP Trend

Year 2015-16 2016-17 2017-18 2018-19 2019-20

Quarter
Q1 7.5% 7.2% 5.9% 7.7% 5.0%
Q2 7.6% 7.4% 6.6% 6.9% 4.5%
Q3 7.3% 7.0% 7.3% 6.3% 4.7%
Q4 7.9% 6.1% 7.9% 5.7%
Sources: Ministry of statistics and Programmed Implementation (MOSPI)

8.00
%

7.00
% Q1

6.00 Q2
%
Q3
2.00
5.00 Q4
%

1.00
4.00
% 2015- 2016- 2017- 2018- 2019-
16 17 18 19 20
0.00
3.00
%

Figure 1 India GDP Trend

Sources: Ministry of statistics and Programmed Implementation (MOSPI)

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In the above Figure 1 and Table 2 we can see that India’s real GDP was on a continuous
downward trend and spread of the pandemic is going to affect it even worse. Government has
taken steps to control its spread, such as nationwide restriction for 45 days and a complete
lockdown of states. This have brought a situation where there is no economic activity and could
impact both consumption and investment. During FY 2015-16 the GDP was 7.5% in Q1 then
there was a fall in Q3 which was 7.3%, however it rose to 7.9% in Q4. India’s GDP is slow down
to 5.00% Q1 financial year 2019-20, this is the lowest in 5 years. Moreover, GDP was slipped
down to 4.5% in Q2 financial year 2019-20, however it marginally improved to 4.7% in Q3. Few
sectors lag themselves from the global chain due to the threat of the deadly virus as a result there
is less reliance in intermediate imports. To recapitulate investment, private consumption and
external trade, which are the three major contributors to GDP, may get hit. The Indian
Government has pronounced an array of revival packages to overcome the circumstances, e.g.
additional funds for healthcare, food security, sector related incentives and tax incentives. The
RBI also on 27th Mar announced numerous steps which would make available US$52 billion
(₹374,000 crore) to the country's financial system. On 29th Mar central government agreed for
the movement of all essential consumables during the lockdown. On 3rd Apr the government of
India released more funds to states for handling the corona virus totaling to US$4.0 billion
(₹28,379 crore).

Demand Side Impact

The lockdown is to have an ample impact on the economy, majorly on consumption which is one
of the biggest components.

Table 3 Essential Consumption Expenditure by Sector

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 Sources: MoSPI, 31st Jan 2020, accessed on 24th Mar 2020.

The Impact of Covid 19 in Indian Economy – An Empirical Study

Figure 2 Essential Consumption Expenditure by Sector

Sources: MOSPI, 31st Jan 2020, accessed on 24th Mar 2020.

The above Figure 2 and Table 3 shows the private consumption. Sudden stop of urban activity
has caused slowdown in consumption of non-essential goods. The 45 days of lockdown would
severely impact the domestic supply chain and affect the availability of essential commodities.

Impact on Different Sectors

The below Figure 3 shows the major contribution to GDP by different sectors in India-

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 Figure 3 Contribution to GDP by Different Sector Sources: Compiled from collected data

Sources: Compiled from collected data

In this Figure 3 shows the contribution to GDP by different sectors. The projected GDP growth
of 1.9% by IMF “International Monetary Fund” for India during financial year 2021-22 is the
maximum among G-20 nations. Just in single month unemployment percentage rose from 6.7%
on 15th Mar to 26% on 19th Apr. In the above chart it is revealed that consumer and retail
business sector have the highest GDP contribution that is 18%. Then comes the food and
agriculture sector which is an essential commodity and it contributes 16.5% GDP. Transportation
and logistics sector which is also an essential commodity, it contributes 14% GDP. Telecom is
one of the most significant sectors during this pandemic since it helps the employees to work
from home, enhances timely communications of businesses, its contribution to GDP is 6.5%.

In this figure, it shows the contribution of India’s economic growth. Here, investment is playing
a vital role after consumption. We can see, net exports have increased back to 2007 where it was
negative ratio, but now it contributes in growth of economy.

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If we compare India’s economic condition with China, USA or EU, we can see a clean win to
their economy. In 2018 and 2019 the condition is better then China as well as USA and from the
whole world.

Findings & Solutions

From the report of IMF forecast we can say that, during 2012 to 2014 the condition was not so
well. It went downside in 2013 but later upward in 2014. Then back to 2015 to 2017, it went ups
as well as down but the condition was too good from 2012. This forecast suggests that the slope

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goes upward to 2023 but in 2020 the slope went downward as we know the pandemic situation
paused all the economic growth.

Outbreak of corona virus has pushed the entire world into state of ambiguity. The present
depression is a total change the from recessions that we had faced in 2008. This has many
consequences such as changed the mind set of people, challenge for the industry, shakeup the
world economic order. Everyone is trying to measure this pandemic. It is certain that we are
gradually adapting the changes towards our life in a permanent manner. Most companies have
increases resilience to work remotely and allowing their employees to work from home. While
these many measures were already on the track, they have now going to be new normal very
soon. Risks to supply chains are significant and will have long term impact. Hence it is important
that we improve the capabilities in order to counter the consequences of unforeseen events. We
need quickly restore the profit of business and resume the original state which was destroyed by
the risk. One small virus has devastated the world which is beyond imaginable for mankind. The
important learning, we have learnt so far is the criticality of overall cost control in business and
living our livelihood to the minimum.

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CONCLUSION

India as a country offers a wide range of opportunities for business personnel at various sectors.
Being a democratic nation, the government promotes and assists private sector business in
developing wherever required. Presently, India’s economy continues to grow at a very healthy
rate in a fast pace, even as other major countries struggle to maintain their growth. Legal
framework is fair and just for business, overall. Technology is a cornerstone for both the
economy and culture of India and technology seems to develop and reach new heights. And,
even though government has been slow to act on environmental issues, concerns are constantly
raised on various matters in order to develop proper and efficient strategies to tackle
environmental issues.

The country hosts some of the biggest and most successful companies in the world in industries
that include financial, telecom, steel production, electrical power generation, and petroleum. And
various schemes and plans have been rolled out by the present government to attract investors.
The plans have had a positive impact and a good response is being displayed by various potential
investor companies from many countries. India has been a fairly successful country in massive
undertakings of MNC'S. However, India’s political and regulatory systems should also develop
and policies and procedures should be implemented to support consistent FDI. Additionally,
social and economic infrastructures of the country have to develop and rural areas should be
given importance. The political aspects of the country do have a major influence on businesses at
various scales. So, corporations should be less ignorant and more co-operative to the government
to develop a smooth business relationship. Therefore, companies thinking to do business
globally, can consider India to be a preferable market to invest on which is fairly stable and
yields positive results for businesses.

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 REFERENCES

01. International Business- Competing in the Global Marketplace by Charles W. L. Hill,

02. AMB Country Risk Report, 2011, Copyright © 2011 by A.M. Best Company, Inc.

03. Daiels, Radebaugh, Sullivan: International Business.

04. WORLD BANK GROUP, 2019. Pollution Prevention and Abatement Handbook

05. IMF World Economic Outlook, 2019

06. Ministry of the Economy Report, 2019

07. National Institute of Statistics and Economic Studies, 2019

08. Credit Conditions Asia-Pacific: COVID-19: Flatter Growth, Tougher Recovery, April
22,2020

09. An article by KPMG on ‘” Potential impact of COVID-19 on the Indian Economy”.

10. (WHO), W. H. O. Coronavirus disease (COVID-2019) situation reports.

11. Shreesh, B. & Kishore, K. (2012). Impact of International Liberation on the Indian
Economy. Journal of Emerging Knowledge on Emerging Markets.

12. UNCTAD (2010). How are the Poor Affected by International Trade in India: An
Empirical Approach. An UNCTAD report 2010.

13. http://www.indexmundi.com – Historical Information. Accessed on 23rd July, 2019

14. http://beakermag.com – Things to consider before starting a-company. Accessed on 21st

July,2019.

15. https://www.india.gov – The Fact Book of India. Accessed on 21st July, 2019

16. http://www.tradeeconomics.com – Trading Economy of India. Accessed on 19th July,

2019

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Details Sub Topics Page No.
Letter of Transmittal 2

Acknowledgement 3
Intro
4
Letter of Declaration
Abstract 5
Table of Content 6
Introduction 7-8

Objective of the study 9

9
Introduction Scope of the Study

Limitation of the Study 9

Literature Review 10
Literature Review

Methodology of the Study 11

Methodology of the Study

Materials and 12
methods
12-22
Result and Discussio
7

11
Report Findings
14

18

Conclusion Conclusion 20

Reference 21

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