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Course Name: International Trade Research

Course Instructor: Gus Lazopoulos

Group Project 1

Submitted by:
1. Yash Ketanbhai Shah (201902241)
2. Harshit Manishkumar Shah (201902971) 
3. Ramanpreet Kaur (201902146) 
4. Navjot Kaur Sidhu (201902541) 
5. Kamaljit Kaur (201903103) 

Subject: International trade research project on

“Export of Pharmaceuticals from India to Canada”
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1. Introduction
A new portal for organizations has been opened by globalisation, where organizations can
operate outside their narrow regional borders. One of the main aspects that determine the
destiny of any company as it operates outside the geographical area is how effective their
market penetration plan is for those organizations. While a company is beginning to
prepare to reach a new market or nation, along with current trade policies, it is important
to recognize the macro-environmental and geopolitical powers of that region. However, this
is not enough for sustainability, since companies need to consider, in terms of existing
strategies, the possible challenges and rewards of the emerging sector. A detailed
comprehension of the market is, henceforth, necessary. This market entry approach
assignment aims to establish a new market focused on the challenge and viability of the
new market for YHNRK Pharmaceuticals Limited from India to Canada.
2. Company Background
YHNRK Pharmaceuticals Limited is one of India's leading pharmaceutical companies listed
under NIFTY 50. YHNRK Pharmaceuticals is engaged all over the world in the production,
licensing and distribution of a variety of medicinal products. As a pharmaceutical firm,
YHNRK claims that through creativity, the underlying concept of changing people's lives is
feasible, so YHNRK keeps innovation at the center of business. The company's mission is to
create creative products for individuals. The business claims that by finding prospects in
fields that are mainly overlooked by other businesses, they have accomplished success. Any
of the tactics responsible for the growth of YHNRK Pharmaceuticals Limited are the
production of medicines with diverse advantages and the availability of lower-cost
medications to individuals afflicted by rare diseases.
3. Identification of Pharmaceutical Market in Canada for Market Entry
Before a company joins either market, it is highly necessary for YHNRK Pharmaceuticals
Limited to consider Canada's pharmaceutical market. However, it is impossible to classify
one single country from each of the continents, given the large discrepancies between Asian
and American nations.

According to market data, it can be reported that YHNRK Pharmaceuticals Limited has a
large growth potential in the existing pharmaceutical market in Canada (North America). On
the basis of a survey, the overall size of the Canadian pharmaceutical industry is projected
to increase from $23.7 billion in 2016 to $25.1 billion by 2021; this projection suggests an
annual growth trend of 1% for the Canadian pharmaceutical market.
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For any sector, any mature markets have a modest potential for growth; on the opposite,
Asia's emerging markets have stronger prospects for growth. Because of its high economic
growth rate, India is one of the main contributors to the Asian economy. According to a
report, in terms of net amount, Chandran and Brahmachari (2018) are the third largest
Indian pharmaceutical industry, although in terms of size they are the world's thirteen
largest markets. While the Indian government's latest GST strategy has slowed down the
growth rate of Indian pharmaceutical industry economists, it is believed that it will rise over
the next year (2020).
4. Analysis of contemporary macro-environmental and geopolitical forces impacting the
country
Canada: A situation that subsists in the economy as a whole is macro-environmental. There
are six micro-environmental factors that can influence the country's trade (political,
economic, social, technical, legal and environmental). The macro-environment is more
related to general business than any particular sector's results. It is therefore necessary to
consider the degree to which these forces affect Canada's overall business success before
YHNRK Pharmaceuticals chooses to penetrate Canada's market.

Canada's political climate is strongly driven by government rules and legislation intended to
control the nation and its trade. With a total population of 47 million, Canada is a
constitutional monarchy. In comparison, Canada is broken into 17 regions and 2
independent cities. Two houses in parliament are the Congress of Deputies and the Senate,
which finally rendered Canada one of Europe's fragmented nations. However, Canada is a
member of NAFTA and certain rules and regulations that have been primarily established by
the NAFTA administration need to be considered by NAFTA member countries, which makes
it impossible for any country to start its business in Canada, especially if it is not part of
NAFTA.

Canada is the world's 13th-largest economy and North America's 5th-largest. Much of
Canada's revenue streams are generated from the tourism sector; thus, government and
international investors pay particular attention to the tourism industry. In 2012, the
Government of Canada initiated its National Reform Agenda, which seeks to develop job
rates and stabilise the country's economy.

The company must obtain knowledge about geopolitical threats or geopolitical influences
that may influence the organization's success prior to entering any new sector.
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A research undertaken on Canada's socioeconomic situation shows that Canadian citizens

have a decent standard of schooling. In addition, the study revealed that the Canadian
population has a better understanding of foreign languages, which makes it easier to find
internal staff in Canada for any foreign company.

Connectivity is particularly important for any business organization gaining good access to
the internet and telecommunications. Canadian correspondence uses technical innovations,
and internet connectivity has enabled the economic process for all international buyers.

Geopolitical factors: Canada's geopolitical condition cannot be considered as strong as any

other country in Europe. Canada's entire condition has been affected by the economic crisis
and the latest terrorist threat. The Canadian government is planning to reform Canada's
current economic and justice system. The three layers of political structure, however, can
be a barrier in that manner.

India: India has been one of the politically powerful countries within Asia in terms of
political stability. The presence of various political parties has not only made political
decision-making complex, but also time-consuming. India is the world's largest democratic
country, and major political decisions taken by the government are oriented towards major
individuals. In the year 2016, the current government of India adopted the demonetization
decision to reduce corruption within the country. The entire socio-economic condition of
India has been affected by this demonetization. It has affected India's entire political
situation and people's lives (Singh et al., 2018).
India is the world's third-largest economy, so any business organization in India has a great
opportunity. India's tax system has always encouraged international investors or new
entrants to enter the Indian market. India has managed to keep its GDP growth high,
despite various political issues, and that is certainly a positive part of the economy.

In view of India's social condition, illiteracy and unemployment are two major problems that
influence the country's growth. The large Indian population, however, has created a strong
market for all new entrants.
India has managed enormous growth in the face of technological progress. For any national
or international organization to grow within India, the advancement of technology and the
availability of the internet have been helpful.
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Geopolitical factors: Geopolitical factors concentrate on political powers linked to

geographical space (Karim and Islam, 2018). It suggests that if the geographical position of
the country is better than others, a country can be considered a geo-politically strong one.
India has a strong position in world politics based on this point of view. India is regarded as
a sea-land. Many countries are therefore dependent on Indian water bodies. India has been
one of the lucrative geographical locations for foreign countries for their business since the
historical period, and it continues to be the same.

5. Analysis of the development of trade and business policy for each country
Canada: For foreign investors who are interested in investing, the Government of Canada
has a specific regulation. For more than 35 years, FDI has played a big role in shaping the
Canadian economy. Many foreign investors are drawn to invest or start their venture in the
Canadian market in a lucrative market with greater export possibilities and growth
opportunities. The Government of Canada has decided to attract a number of foreign
investors in order to recover Canada from the economic crisis and thus providing foreign
investors with investment opportunities is one of the main strategies adopted by the
government.

However, it was not possible to find significant changes in trade regulations and foreign
exchange YHNRK Popular Party assumed the administration's responsibility in December
2016. Canadian law allows 100% foreign ownership of investments and the best part is that
the government liberalizes capital movements. For overseas investors, the new corporate
tax rate is 25%, which is smaller relative to many European nations.

India: India's foreign trade policy is governed under the 1992 Act on Foreign Trade, Growth,
and Regulation. The main trade barriers for India are that a list of commodities, comprising
109 commodities, has been identified by the Government of India and must be certified by
the National Standards Body of India. The basic idea behind such a policy is to ensure that
only good-quality products have market access. The livening of imports is a major issue in
the Indian trade market. The Indian government, however, has also abolished the need for
import-licensing on many consuming products, but there are still few facing licensing
related issues for their trade. Another relevant rule that foreign investors have to know
before deciding to invest in the Indian market is that there is a negative list drawn up by the
Government of India on the grounds of imported goods. In terms of industry, certain goods
or companies that manufacture these products face substantial barriers. There are two
income tax rates in India, but multinational firms pay tax at a rate of 40 percent, regardless
of their revenue over the years.
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6. Assessment of potential dangers, risk, and opportunities in the current policies of each
country
Through evaluating trade strategies, it can be observed that some threats for new entrants
are involved for both countries in this business entry policy assignment. The main challenge
for foreign investors as potential entrants in Canada is that the Canadian government has
far less influence over trade policy, which makes the market process convenient for local
traders, but when foreign investors decide to invest in Canada, the level of rivalry is strong.
The Canadian market is open to foreign competitors because of considerably less control
over export and import policies. In the other hand, some of the options included in the
Canadian economy are a 25 percent tax threshold and liberalised capital movements.

India, on the other hand, has established a very stringent policy of import licensing, which
poses obstacles to many foreign goods (Prasad and Prasad, 2018). Not just that, under the
Indian constitutional act, Indian trade policies are strictly regulated, which makes it difficult
for investors to disobey any of those policies. The biggest opportunity that can be seen in
the Indian market is the certification program, which means that only good-quality goods
will be able to achieve market access. In addition, in order to obtain more FDI, the new
Indian government is willing to gain more fresh entrants into the market. Henceforth, there
are different trade policies that can be introduced in the future to improve the consumer
situation.

7. Conclusion
In this market entry strategy task, it can be inferred from the above topic that entering the
Indian market between Canada and India would be more lucrative for YHNRK
Pharmaceuticals Limited. There are different things that make India a better market for any
pharmaceutical business.

First of all, India is the world's largest democratic region, which has naturally created one of
the largest markets for any organization. This is not, however, the only justification why
India can become the first pick. India has been helped by economic growth and
technological advancements to become a flexible market that can connect YHNRK
Pharmaceuticals Limited with another neighbouring nation. Therefore, YHNRK
Pharmaceuticals Limited will be able to grab a wide segment of the Asian market by
entering India. It is also important to consider that Canada is a poor economy in
comparison. One of the key reasons for joining a NORTH AMERICAN nation, such as Canada,
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is to challenge any NON-NORTH AMERICAN organization. It is therefore strongly

recommended that YHNRK Pharmaceuticals Limited should pick India as their location for
new business entry through this market entry strategy assignment. Different strategic
methods are used to achieve a valid approach in this market entry plan assignment.

THE END