Course Objectives

● Growing importance of globalization makes it mandatory for every

budding manager to be well versed with the dynamics of International
business.

● This course intends to familiarize the students of management with

the advanced knowledge of global business scenario from an Indian
perspective.
Course Learning Outcomes:

After completion of the Course students will be able to:

● Have an awareness about the foundations of basis of trade and gains
from trade,
● Opportunities and challenges involved , and
● Support and strategy parameters of International Business from an
Indian perspective.
Reading Material

Recommended Book :
● Rakesh, M. J. (2013). International Business, New Delhi, Oxford
University Press

Reference Books:
● Laura, H. & Werhane, P. H. (2013). The Global Corporation,
Routledge Taylor & Francis Group, New Delhi
● John, B. C., & Parboteeah, K. P. (2011). International Business:
Strategy and the Multinational Company, Routledge Taylor & Francis
Group, New Delhi
● Varma, S. (2013). International Business, New Delhi, Pearson
Publication
● Charles, H. (2011). International Business: Text & Cases, New Delhi,
Tata McGraw Hill
● Warren, J. K. (2013). Global Marketing Management, New Delhi,
Unit-1
Introduction to Global Business
Learning Objectives

To explain the concept of Globalization

To elucidate the factors influencing globalization
To explicate the concept of Global business
To discuss strategy for managing business in the globalization era
Concept of Globalization

●The process of integration and convergence of economic, financial,

cultural and political systems across the world.
●Globalization involves goods, services, the economic resources of
capital, technology, and data.
Movers of Globalization

● Technological breakthrough
● International economic integrations
● Global expansion of business operations
● Emergence of the global customer segment
Concept of International Business

●International Business : All those business activities which involves cross

border transactions of goods, services, and resources between two or more
nations.

●Global Business: Conduct of business activities in several countries using a

highly co-ordinated and single strategy across the world.
IB Examples
Exercise: Type your answers in the Chat Box
Foreign retailer opens store in another
country. Y/N
IB Examples

American company purchases

resources from India. Yes/No
IB Examples

When Canadian company sells goods and

services to their Canadian customers.
Yes/No
IB Examples

Operating an manufacturing plant overseas.

Yes/No
IB Examples

● Exporting products to foreign

countries. Yes/No
IB Examples

● Import products from a foreign

country. Yes/No
IB Examples

Investments in another country. Yes/No

Video: Why International Business?

● https://www.youtube.com/watch?v=lMdhfBQUhtI
Nature of International Business

● Accurate Information.
● Information not only accurate but also timely
information.
● International markets have more potential than
domestic markets.
● Market segmentation based on geographic
segmentation.
● Wider scope.
Reasons for International Business Expansion/
Motives for international Business
● First-mover Advantage

● Opportunity for Growth

● Small Local Markets

● Increase of Customers

● Discourage Local Competitors

PULL and PUSH factors

● Pull Factors are motivating forces which attracts business. For

example, profitability and growth prospects.

● Push Factors are compulsions of domestic market like prompting to

internationalize.
Push/Pull factors

● Domestic constraints
● Unskilled manpower
Push/Pull

Technological advantage
Attractiveness of the foreign market
Saturation of the domestic market
Investments in low cost
Unique Product
Compulsion of the domestic market
Economies of scale
Stages of Internationalization
Domestic Company

● Domestic company : Most international companies have their origin

as domestic companies.

● A purely domestic company operates domestically because it never

considers the alternative of going international.
International Company

● International Company: they do not have any foreign direct

investment where they do export or import of goods or services.

● A domestic company may extend its products to foreign markets by

exporting, licensing and franchising. International companies are
importers and exporters, they have no investment outside of their
home country.
MDH(MAHASHIAN DI HATTI)

MDH now exports spices to countries across the world such

as Switzerland, Japan, the US, and Canada. It is one of the biggest
brands of spices, and manufactures almost 50 different types of
spices.

Read more
at: https://yourstory.com/2017/12/dharampal-gulati-mdh-masala
Where is the headquarter of Heinz Company?
● The H. J. Heinz Company is an American food processing company
headquartered at One PPG Place in Pittsburgh, Pennsylvania.

● International presence in Canada, USA, Indonesia, Netherlands, New

Zealand.
Multinational Company

● Operations and trading in two or more countries across the globe.

● They have FDI in very few of the foreign countries.
● More focused on adapting their products and service to each
individual local market.
● Heinz Ketchup is available in India in two varieties, the standard
Tomato Ketchup and Tomato Chili Sauce. As Indian taste preferences
vary among the regions, Western brands such as Heinz works on
Indian interpretations of ketchups for sale in the country.
● They sells tomato juice, mustard, vinegar, baby food, barbecue
sauces, canned pastas, beans, pasta sauces, gravies and soups in
Canada.
● Adidas is also a multinational corporation, founded and
headquartered in Germany, that designs and manufactures shoes,
clothing and accessories.

● At the corporate level, the company focuses on innovation, production

of new and unique products and effective processes to assist in coping
with competition.
Global Company

● Operations and trading in many countries across the globe.

● They invest in some or all of the foreign countries where they operate
in.
TCS

● TATA Consultancy Services Limited (TCS) is the biggest Indian

multinational information technology (IT) service and consulting
company, and is headquartered in Mumbai, Maharashtra, India.
Bahrain, China, Israel, UAE, Hong Kong, Indonesia, Japan, Malaysia,
Canada, Mexico, and United States. It designed an ERP system for
the Indian Railway Catering and Tourism Corporation.
Transnational Company

● Transnational companies are much more complex organizations.

● They invest in foreign operations, have a central corporate facility but

give decision-making, R&D and marketing powers to each individual
foreign market.

● They are flexible in nature. Adopts the local culture and the ultimate
market strategy based on it.
Nestle

● It is a Swiss food and drink processing corporation headquartered

in Vevey, Vaud, Switzerland.

● Nestle is a decentralized company with the operational responsibilities

spread out among the local units. The local units enjoy autonomy in
regards to pricing, marketing, distribution etc.
● For an instance, Nestle produces soya sauce powder in Singapore,
cereals and coffee in Philippines . All these products are produced to
serve the regional market.
Pizza Hut

Pizza Hut is an American restaurant chain and international franchise.

Pizza Hut is the most preferred pizza brand in India, given its freshest,
tastiest and affordable Pizzas.
IKEA: From Domestic to Global

● It was founded in 1943 and started out as one store in Sweden. It sold
pens, picture frames, jewellery etc.
● Opened its first furniture showroom in 1953 and full fledged store as
a domestic company in 1958.
● They opened first store outside Sweden in 1963, Norway making
the entry of the company in the international Business.
● In 1985 it opened a store in the United states and became MNC.
● Today, IKEA is operating more than 276 stores throughout the world.
Approaches to International Business/Management
orientations/EPRG framework
● Ethnocentric
● Polycentric
● Regiocentric
● Geocentric
Ethnocentric Orientation

● The belief which considers one’s own culture as superior to

others.

● The business strategy which has worked in the home country

would also be suitable in other cultures.

● It leads to a standardized or extension approach to marketing based on

the premise that products can be sold everywhere without adaptation.

● An ethnocentric company operates under the assumption that “tried

and true” headquarters’ knowledge and organizational capabilities can
be applied in other parts of the world.
 ● Nissan’s earliest exports were cars and trucks that had been designed
for mild Japanese winters; the vehicles were difficult to start in many
parts of the United States during the cold winter months. In northern
Japan, many car owners would put blankets over the hoods of their
cars. Nissan’s assumption was that Americans would do the same
thing. As a Nissan spokesman said, “We tried for a long time to
design cars in Japan and shove them down the American consumer’s
throat. That didn’t work very well.

Source:Norihiko Shirouzu, “Tailoring World’s Cars to U.S. Tastes,” The Wall Street Journal, pp.
B1, B6
Polycentric approach

● The term polycentric describes management’s belief or assumption

that each country in which a company does business is unique.

● The attitude places emphasis on differences between markets that are

caused by variations within, such as in income, culture, laws, and
politics.

● They develop their own unique business and marketing strategies in

order to succeed in different countries.

● It also leads to a localized or adaptation approach that assumes that

products must be adapted in response to different market conditions.
● Rexona deodorant brand had 30 different package designs and 48
different formulations. Advertising was also executed on a local basis.
Top management has spent the last decade changing Unilever’s
strategic orientation by implementing a reorganization plan that
centralizes authority and reduces the power of local country
managers.

● It is known as Sure in the UK and Degree in the United

States and Canada, Rexena in Japan and South
Korea, Rexona in Brazil and Shield in South Africa.
Source:Deborah Ball, “Too Many Cooks: Despite Revamp, Unwieldy Unilever Falls Behind Rivals,” The Wall
Street Journal (January 3, 2005), pp. A1, A5.
Regiocentric Orientation

● In a company with a regiocentric orientation, a region becomes the

relevant geographic unit; management’s goal is to develop an
integrated regional strategy.

● Regiocentric strategy assumes that all countries of the region can be

regarded as a single market.

● An interesting example of a company with the regiocentric orientation

is General Motors. The company has significantly different strategies
in Europe, Americas and Asia.
Gulf Cooperation Council

● It is a regional intergovernmental political and economic union

consisting of all Arab states of the Persian
Gulf Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United
Arab Emirates.
● Formulating similar regulations in various fields such as religion,
finance, trade, customs, tourism, legislation, and administration.
● Fostering scientific and technical progress in industry, mining,
agriculture, water and animal resources.
● Establishing scientific research Centres.
● Setting up joint ventures.
● Unified military (Peninsula Shield Force)
● Encouraging cooperation of the private sector.
● Strengthening ties between their people.
Geocentric Orientation

● A company with a geocentric orientation views the entire world as a

potential market and strives to develop integrated global strategies.

● The company’s management uses a combination of standardized

(extension) and localized (adaptation) elements in the marketing
program.
 Gap operates company-owned stores in
the United States, Canada, Mexico, the
United
Kingdom, France, Italy, Ireland, Japan, Chin
a, and Taiwan as of May 2016.
Including both company-owned and
franchised stores, there are Gap, Banana
Republic, Athleta, Intermix, or Old Navy
stores in 43 countries.
…………………corporation produces in the home country or in a single
country and focuses on marketing these products globally or vice a
versa.

● Global

● International

● Transnational

● None of the above

The marketing of goods and services outside an organization's home
country (whether in one or several markets) is known as

● International marketing.
● Multinational marketing.
● Direct exporting.
Large multinational companies often allocate their resources without
regard to national boundaries, even though they have a home country
in terms of ownership and top management.

● True

● False
A ................ firm is a worldwide player with the greatest geographic
business scope.
● Multinational

● International

● Global

● Glocal
Globalization refers to:
● Lower incomes worldwide
● Less foreign trade and investment
● Global warming and their effects
● A more integrated and interdependent world
. ……………is the application of knowledge which redefines the
boundaries of global business.

● Cultural Values
● Society
● Technology
● Economy
Subsidiaries consider the regional environment for policy / Strategy
formulation is known as

● Polycentric Approach
● Regiocentric Approach
● Ethnocentric Approach
● Geocentric Approach
The Uppsala Internationalization Model
The Uppsala Internationalization Model
Assumptions in the Uppsala model

● The Uppsala model can explain two patterns in the

internationalization process of the firm (Johanson & Vahlne, 1990, in
Johanson & Associates, 1994). The first pattern is that the
commitment to engage in operations in a specific foreign market
develops according to the so-called establishment chain, which is a
sequence of stages that are made in small incremental steps with
extended commitment and a higher degree of commitment for every
new step.
1. No regular export activities
2. Export via independent representatives (agent)
3. Sales subsidiary and
4. Production/manufacturing (Johanson & Wiedersheim-Paul, 1975, in
Johanson & Associates, 1994, p. 34.)
● From the observation, they find out that companies normally start
their expansion in a psychic nearby market. There, they have
enhanced knowledge of the market and more control of resources,
thereafter gradually when the companies have become more
experienced and acquired better resources, they expand to the more
distance market.

● (By distance market, they refer both to the cultural distance; as well
the differences in language, politics, geographical and the difficulty to
acquire knowledge and information from the market).

● Secondly, most often companies entered a new market through export

before establishment of foreign sales subsidiary or foreign production.
● The second pattern explained is that firms tend to enter new markets
with successively greater psychic distance, and in most cases also
greater geographical distance (Johanson & Vahlne, 1990, in Johanson
& Associates, 1994; Hollensen, 2001).

● The psychic distance is defined as: “…the sum of factors preventing

the flow of information from and to the market. These include
differences in language, education, business practices, culture, and
industrial development.” (Johanson & Vahlne, 1977, in Johanson &
Associates, 1994, p. 51)
● Consequently, the less a firm understands a market the greater the
psychic distance and the perceived uncertainty are. Thus, firms enter
markets they understand and where they can see opportunities and
where the perceived uncertainty is low.

● The best way to minimize the perceived uncertainty and to see

opportunities is through experiential knowledge. That is mainly
acquired through personal experience in the specific market. Hence,
this is the reason for the incremental steps and the sequential
engagement in foreign markets.
Theories of International Trade

● Mercantilism
● Theory of Absolute Cost advantage
● Comparative Cost Advantage theory
● Relative Factor Endowments/ Heckscher-Ohlin Theory
● Country Similarity theory
● Product life cycle Theory
● Global Strategic Rivalry theory
● Porter’s National Competitive Advantage.
What is trade?
What is International trade?
What Is International Trade?
● International trade theories are simply different theories to explain
international trade.

● Trade is the concept of exchanging goods and services between two

people or entities.

● International trade is then the concept of this exchange between people

or entities in two different countries.
● People or entities trade because they believe that they benefit from the
exchange.
● They may need or want the goods or services. While at the surface,
this many sound very simple, there is a great deal of theory, policy,
and business strategy that constitutes international trade.
Why Is Free Trade Beneficial?

❖ Free trade - a situation where a government does

not attempt to influence through quotas or duties
what its citizens can buy from another country or
what they can produce and sell to another country.
❖ Trade theory shows why it is beneficial for a
country to engage in international trade even
for products it is able to produce for itself
❖ International trade allows a country
❖ to specialize in the manufacture and export of
products that it can produce efficiently
❖ import products that can be produced more
efficiently in other countries.
What Is Mercantilism?

❖ It is the oldest international trade theory during 1500 to 1800.

❖ Mercantilism suggests that it is in a country’s best interest to
maintain a trade surplus -to export more than it imports and receive
the difference in gold.
❖ It advocates government intervention to achieve a surplus in the
balance of trade.
❖ This theory stated that a country’s wealth was determined by the
amount of its gold and silver holdings.
❖ It also observes trade as a zero sum game- in which a gain by one
country results in a loss by another.
Mercantilism
● Developed in the sixteenth century, mercantilism was one of the earliest
efforts to develop an economic theory.
● This theory stated that a country’s wealth was determined by the amount of
its gold and silver holdings.
● In it’s simplest sense, mercantilists believed that a country should increase
its holdings of gold and silver by promoting exports and discouraging
imports.
● In other words, if people in other countries buy more from you (exports)
than they sell to you (imports), then they have to pay you the difference in
gold and silver.
● The objective of each country was to have a trade surplus, or a situation
where the value of exports are greater than the value of imports, and to
avoid a trade deficit, or a situation where the value of imports is greater
than the value of exports.
What Is Smith’s Theory Of Absolute Advantage?
❖ Adam Smith argued that a country has an absolute
advantage in the production of a product when it is
more efficient than any other country in producing it.
❖ Countries should specialize in the production of goods
for which they have an absolute advantage and then
trade these goods for the goods produced by other
countries.
❖ In a hypothetical two-country world, if Country A
could produce a good cheaper or faster (or both)
than Country B, then Country A had the advantage
and could focus on specializing on producing that
good. Similarly, if Country B was better at
producing another good, it could focus on
specialization as well.
Example 1 Figure 1

Labour hours(for producing 1 Cars Bikes

Unit)

Country A 12 7

Country B 10 5

Example 2 Figure 2

Labour hours(for producing 1 Cars Bikes

Unit)

Country A 8 7

Country B 10 3
Examples: Theory of Absolute advantage
Example 3 Figure 3

Country X Country Y

Produces(1 Pens T-shirts Produces(1 Pens T-shirts

day of day of
labour) labour)

Pens 20 Pens 60

T-Shirts 12 T-shits 10

Countries should specialize in the production of goods for

which they have an absolute advantage and then trade
these goods for the goods produced by other countries.
Comparative Advantage
● The challenge to the absolute advantage theory was that some
countries may be better at producing both goods and, therefore, have
an advantage in many areas.
● In contrast, another country may not have any useful absolute
advantages.
● To answer this challenge, David Ricardo, an English economist,
introduced the theory of comparative advantage in 1817.
● Ricardo reasoned that even if Country A had the absolute advantage
in the production of both products, specialization and trade could still
occur between two countries.
● Comparative advantage generally compares the output of production
of the same type of goods or services between two countries.
 What Is Ricardo’s Theory Of Comparative
Advantage?

❖ David Ricardo asked what might happen when

one country has an absolute advantage in the
production of all goods.
❖ Ricardo’s theory of comparative advantage
refers to the ability of a country to produce
particular goods or services at lower
opportunity costs as compared to the other
countries.
Example: Comparative Advantage

● For example, assume that China has enough resources to produce

either smartphones or computers. China can produce 10 computers or
10 smartphones. Computers generate a higher profit.

● Therefore, the opportunity cost is the difference in value lost from

producing a smartphone rather than a computer. If China earns $100
for a computer and $50 for a smartphone then the opportunity cost is
$50. If China has to choose between producing computers over
smartphones it will select computers.
Is it possible to have a comparative advantage in the
production of all the goods but not to have an absolute
advantage?
It is not possible for a country to have a comparative
advantage in all goods. However, a country can have an
absolute advantage in all goods.
 What Is Factor endowment Theory?
❖ Comparative advantage arises from differences in national
factor endowments
–the extent to which a country is endowed with resources like
land, labor, and capital, natural resources and climate.

It states that if two countries produce two goods and use

two factors of production (say, labour and capital) to produce
these goods, each will export the good that makes the most use
of the factor that is most abundant., and import goods that
make intensive use of factors that are locally scarce.

For example, a country may have large amounts of both

capital and labour; however, one factor may be
proportionally more than the other. This is what makes
the difference.
Examples

● Clothing production in Hong kong.

● Iran has export in handmade carpets.

 What Is The Product Life Cycle Theory?

❖ The product life-cycle theory - (Raymond Vernon) - as

products mature both the location of sales and the optimal
production location will change affecting the flow and
direction of trade
❖ the size and wealth of the U.S. market gave U.S. firms a
strong incentive to develop new products.
❖ initially, the product would be produced and sold in the U.S.
❖ as demand grew in other developed countries, U.S. firms
would begin to export.
❖ demand for the new product would grow in other advanced
countries over time making it worthwhile for foreign producers
to begin producing for their home markets.
 What Is The Product Life Cycle Theory?

❖ U.S. firms might set up production facilities in advanced

countries with growing demand, limiting exports from the
U.S.
❖ As the market in the U.S. and other advanced nations
matured, the product would become more standardized,
and price the main competitive weapon
❖ Producers based in advanced countries where labor costs
were lower than the United States might now be able to
export to the United States
❖ If cost pressures were intense, developing countries
would acquire a production advantage over advanced
countries
❖ Production became concentrated in lower-cost foreign
locations, and the United States became an importer of the
product
Four Stages

● New Product Innovation: US became leaders in the production of

frozen food.
● Growth: Increase in the sales of the new product attracts the
competitors particularly in advanced countries. Shift manufacturing to
foreign countries.
● Maturity Product: Shift manufacturing to developing countries.
Standard products.
● Decline: market for the product at this stage concentrates in less
developed countries as the customer in advanced countries shift their
demand to further new products.
Difference between Intra Industry trade and Inter
Industry trade
Country Similarity Theory

● It was developed in 1961.

● It is built on identical/similar features of nations of trade.

Basis for trade among nations:

● Similarity of Political and economic Interests.

● Countries in same culture(traditions/rituals) trade more amongst

themselves.

Intra-industry trade encouraged by similarity factor.

Examples:

● For ex, Japan exports toyota cars to Germany, where as Germany exports
BMW cars to Japan.

● India exports refine oil to Arab countries and imports crude oil from
them.
Global Strategic Rivalry Theory

● It was developed in 1980.

● International trade takes place between/ among companies based on
relative competitive advantage, but not countries competitive
advantage.
❖ research and development,
❖ the ownership of intellectual property rights,
❖ economies of scale,
❖ unique business processes or methods as well as extensive experience
in the industry, and
❖ the control of resources or favourable access to raw materials.
Global rivals in FMCG Industry
Greatest rivalries in automotive industry
 Global rivalry in Aviation Industry

https://www.businessinsider.in/finance/how-airbus-bec
ame-boeings-greatest-rival/articleshow/64004041.cms
 What Is Porter’s Diamond Of Competitive
Advantage?
❖ Michael Porter tried to explain why a nation
achieves international success in a particular
industry and identified four attributes that promote
or impede the creation of competitive advantage
1. Factor endowments - a nation’s position in factors
of production necessary to compete in a given
industry
❖ can lead to competitive advantage
❖ can be either basic (natural resources, climate, location) or
advanced (skilled labor, infrastructure, technological
know-how)
2. Demand conditions - the nature of home demand
for the industry’s product or service
❖ influences the development of capabilities
❖ sophisticated and demanding customers pressure firms to
be competitive
What Is Porter’s Diamond Of Competitive
Advantage?
Determinants of National Competitive Advantage: Porter’s
Diamond
 What Is Porter’s Diamond Of Competitive
Advantage?
3. Relating and supporting industries - the presence or
absence of supplier industries and related industries that
are internationally competitive
❖ can spill over and contribute to other industries
❖ successful industries tend to be grouped in clusters in countries
4. Firm strategy, structure, and rivalry - the
conditions governing how companies are created,
organized, and managed, and the nature of domestic
rivalry
❖ different management ideologies affect the development
of national competitive advantage
❖ vigorous domestic rivalry creates pressures to innovate, to
improve quality, to reduce costs, and to invest in
upgrading advanced features
Porter, M.E. (1990). The Competitive Advantage Of Nations. Harvard
Business Review
DLF Limited

● Demand conditions: DLF uses a customer-centric approach to develop

residences of the highest standard which stand the test of time.

● Relating and supporting industries :DLF had engaged Parsons

Brinckerhoff, USA firm for project management consultancy and
construction work which had been awarded to IL&FS.

● Firm strategy, structure, and rivalry: Sobha, Prestige, Unitech, Omaxe,

Global Realty, Shree Vardhman Group, Bharti Realty, TGS Constructions,
JLL and ACME Group.
Examples?
PESTLE ANALYSIS
PESTLE ANALYSIS OF OLA
Instruments of trade Policy
Tariffs Non tariff
Barriers
● Quotas
● Specific Tariff
● Subsidies

● Domestic/Local
● Ad-valorem duty content
requirements(LCR)

● Voluntary Export
● Countervailing duty Restraints(VER)

● Embargoes

● Import Licences

● Sanctions
Specific tariffs

It is levied as a fixed charge per unit of a good.

For example, For example, t-shirts manufactured
in a certain country may have a tariff of $0.12 per
t-shirt. It can also be calculated as a fixed amount
per “quantity”. In other words, a tariff may be
assigned based on the weight of a particular
product as $100 per ton.
Ad-valorem duty

If a product you are importing has a stated commercial value of

$7,000 and an Ad Valorem tariff rate of 5%, you would pay $350
in tariff rate charges. In this instance, it is not the quantity but
the value which dictates the tariff rate costs associated with the
import.
Countervailing duty

Assume Country A provides an export subsidy to steel makers in

the nation, who exports to Country B at $800 per tonne. Country
B has its own steel industry and domestic steel is available at
$1000 per tonne. If Country B determines that its domestic steel
industry is being hurt by unrestrained imports of subsidized steel,
it may impose a 25% countervailing duty on steel imported from
Country A, so that the resulting cost of the imported steel is also
$1000. This eliminates the unfair price advantage that steel
makers in Country A have due to the export subsidy from their
government.
Quotas

● In production quotas, a government or a group of producers, limit the

supply of a particular product in order to maintain a certain price
level. For example, the Organization of Petroleum Exporting
Countries(OPEC) sets a production quota for crude oil in order to
"maintain" the price of crude oil in world markets.

https://www.investopedia.com/articles/investing/012216/how-opec-and-n
onopec-production-affects-oil-prices.asp

http://www.nbcnews.com/id/3540959/ns/business-world_business/t/us-i
mposes-quotas-china-textiles/#.Xt3c7jozbIU
Subsidies

● In November 2010, the Government of India (GOI), through

the Ministry of New and Renewable Energy (MNRE), announced a
subsidy of ₹950 million for electric vehicles. To claim the subsidy,
manufacturers needed to certify that 30% of the components were
made in India.
● In April 2014, the Indian government announced a new plan to
provide subsidies for hybrid and electric vehicles. The plan will have
subsidies up to ₹150,000 for cars and ₹30,000 on two-wheelers. India
aimed to have seven million electric vehicles on the road by 2020.
● The GOI has set deadline for 'Only Electric Vehicle (Manufacturing)'
by 2030.

Source:
https://en.wikipedia.org/wiki/Government_incentives_for_plug-in_ele
Local Content Requirements

● In 2019, The Government of India pursued local content requirements

in specific areas, including ICT, electronics, and solar energy, to spur
an increase in the manufacturing sector’s contribution to India’s Gross
Domestic Product (GDP). These policies negatively affect U.S.
exporters.

https://www.export.gov/apex/article2?id=India-Market-Challenges

https://www.livemint.com/news/india/india-allows-higher-local-content-r
equirement-for-public-procurement-11600435911277.html
Voluntary Export Restraints(VER)

● The most notable example of VERs is when Japan imposed a VER on

its auto exports into the U.S. as a result of American pressure in the
1980s. The VER subsequently gave the U.S. auto industry some
protection against a flood of foreign competition.

https://www.investopedia.com/terms/v/voluntary_export_restraint.asp

https://economictimes.indiatimes.com/news/economy/foreign-trade/india
-takes-us-steel-tariffs-complaint-to-the-wto/articleshow/64292453.cm
s?from=mdr
Embargoes

● United Nations Security Council resolution 1172, adopted

unanimously on 6 June 1998, after hearing of nuclear tests conducted
by India and Pakistan in May 1998.
● The world's major nuclear powers imposed technological embargo on
India and Pakistan, which was technologically racing to meet with
India's achievement.

https://en.wikipedia.org/wiki/Pokhran-II
Sanctions

● Russia responded with sanctions against a number of countries,

including a total ban on food imports from the EU, United States,
Norway, Canada and Australia.

● The United States applied economic, trade, scientific and

military sanctions against Iran. the U.S. sanctions against Iran include
an embargo on dealings with the country by the U.S., and a ban on
selling aircraft and repair parts to Iranian aviation companies.

● https://www.treasury.gov/resourcecenter/sanctions/programs/pages/pr
ograms.aspx
● https://www.international.gc.ca/world-monde/international_relations-r
elations_internationales/sanctions/russia-russie.aspx?lang=eng
Import Licensing

● There are number of goods, which can only be imported under an

import license. This category includes several broad product
groups that are classified as
● consumer goods;
● precious and semi-precious stones;
● products related to safety and security; seeds, plants and animals;
some insecticides, pharmaceuticals and chemicals; some
electronically items;