A Study of Indian Business Ventures Abroad

Ritu Srivastava and Krishna Kumar

Vision, 2003, vol. 7, issue 1, 9-23

Abstract: India started opening its economy a decade ago to integrate with the global economy. Several economic reforms have been undertaken during this period with the hope that India will soon emerge as a global player. There is a need to review the developments and take necessary corrective action. It is necessary because globalisation and integration with the world economy is a double-edged sword. If necessary care is not taken, the country may become only a global market rather than emerging as a global player. This paper examines the patterns of Indian Business Ventures Abroad, both in the form of subsidiaries and joint ventures over a period of 50 years since independence. The analysis reveals that there has been a significant increase in the activity. The ventures, however, have been concentrated in only a few, about a dozen, countries. The study also shows that there is a noticeable preference towards subsidiary mode of operation. Further, there are country-wise patterns of preferences towards use of joint ventures and subsidiary modes. The study also reveals that there is a significant shift in the mix of activities, tilting from high risk manufacturing to low risk trading and software development. It is also observed that there is a wide gap between the number of ventures approved and actually implemented. A comparison has also been drawn between Indian Business Ventures Abroad and the Foreign Business Ventures in India during the pre and the post-liberalisation era. This is complemented with the patterns of export/import ratio in the respective periods. The two together indicate that the reforms in economic policies undertaken so far seem to be leading to India fast becoming a global market rather than emerging as a global player. The paper then suggests that there is a need for intensive studies for developing policy and strategic interventions to strengthen India's business ventures abroad and to help India emerge as a global player.

Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:sae:vision:v:7:y:2003:i:1:p:9-23

DOI: 10.1177/097226290300700102

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