In the International India Spotlight India is located in southern Asia, with the Bay of Bengal was Muslim, has served as a focal point for disagreement to the country's east and the Arabian Sea to its west. between the nations. The multiple wars over this area ar Positioned alongside the important trade corridor of the known collectively as the "Kashmir Conflict. ** Indian Ocean, India is approximately one-third the size of Because India was under British rule, India adopter the United States in area. Its major natural resources con- the "common law" legal system, with certain codes inter sist of coal (fourth-largest reserves in the world), iron ore, twined based on particular religions. As a democratic manganese, mica, bauxite, rare earth elements, titanium republic, India's political system is also similar to that ore, chromite, natural gas, diamonds, petroleum, lime- the British system. The country has operated with this stone, and arable land. The majority of the country's land form of government since its independence in 1947. The use (60 percent) is allocated to agriculture. India is a executive branch consists of the president, vice president largely rural country that suffers from a significant lack prime minister, and a cabinet of appointees: the legisla of infrastructure in both metropolitan and rural areas." tive branch is fashioned as a bicameral Parliamentary India boasts a population of 1.295 billion. The country system; and the judicial branch is modeled off of the is approximately 80 percent Hindu and 14 percent Muslim. English court system. The population is also relatively young: approximately In May 2014. India elected Prime Minister Narendin 85 percent of its population is 54 years old or younger Modi. Support for Prime Minister Modi was based on The population growth rate is a steady 1.22 percent. Hindi promises that he would mend the country's relationship is the dominant language, but Indians, depending on their with its Asian neighbors, including China and mos ethnicity and geographic location, speak other languages importantly. Pakistan. He also promised to create as well, including Bengali, Telugu, Marathi, Tamil, Urdu, business-friendly environment in the country, Specifi Gujarati, Kannada, Malayalam, Oriya, Punjabi, Assamese.cally, Prime Minister Modi promised to invest heavily in and Maithili. These various languages form the basis on infrastructure, including adding high-speed trains, build how the states within the country are divided. While ing more schools, and cleaning the hudly polluted water Hindi is the dominant language, English is the language ways. These investments were designed to dramatically primarily used among the educated class and in commer increase India's manufacturing exports. cial and political communication. The vast majority of the Early in his term. Prime Minister Modi was critici population is either directly or indirectly dependent on for failing to deliver on his promises. Hver India 7.5 percent annual GDP growth rate pe India's GDP in 2014 was US$2.019 trillion. GDP the fastest growing major world come will rowth in India has been higher and more consistent com if India will be able to maintain this growth ed to many of the other larger emerging markets, with whether or not the Prime Minister's DELL Case%202%20-%20India.pdf me munguage, ons, depeneng on meer WIGYTIS AT neighbors, mcluding Cimah, mos ethnicity and geographic location, speak other languages importantly, Pakistan. He also promised to create as well, including Bengali, Telugu, Marathi, Tamil, Urdu, business-friendly environment in the country. Specifi Gujarati, Kannada, Malayalam, Oriya, Punjabi, Assamese,cally, Prime Minister Modi promised to invest heavily ir and Maithili. These various languages form the basis on infrastructure, including adding high-speed trains, build how the states within the country are divided. While ing more schools, and cleaning the badly polluted water Hindi is the dominant language, English is the language ways. These investments were designed to dramatically primarily used among the educated class and in commer increase India's manufacturing exports. cial and political communication. The vast majority of the Early in his term, Prime Minister Modi was criticizer population is either directly or indirectly dependent on for failing to deliver on his promises. However, India's agriculture." 7.5 percent annual GDP growth rate has positioned it a India's GDP in 2014 was US$2.049 trillion." GDP the fastest growing major world economy. Time will tell growth in India has been higher and more consistent com if India will be able to maintain this growth rate an pared to many of the other larger emerging markets, with whether or not the Prime Minister's efforts to open Indis recent annual growth rates holding steady at around to foreign business will succeed. Currently, India rank: 7 percent." 130 out of 185 nations in the World Bank's "Ease of India faces numerous socioeconomic and security chal Doing Business Survey, which is up four spots from the lenges, including a very high rate of poverty and strained previous year. relations with neighboring Pakistan. India's 2014-2015 census indicates that less than 10 percent of the 300 mil- You Be the International Business Consultant: lion households surveyed had a salaried job, only 5 per- cent had earned enough to pay taxes. More than 35 Walmart is one of the largest retailers in the world percent of adults are classified as illiterate." India's tense Despite its size, the company has faced numerous chal relations with Pakistan date back to the moment cach lenges when entering and operating in foreign markets gained independence from the British empire. Split along India has posed an especially difficult situation. Ever religious lines, India was intended to remain a largely though the country has opened its economy to the work Hindu state while Pakistan was intended to be a predom market over the past 30-40 years. India maintains stric inantly Muslim one. Fighting between the two neighbors limitations over foreign ownership in its retail sector. For started almost immediately. Kashmir, where the leader of example, foreign companies are prohibited from opening the state was Hindu but the majority of the population supermarkets and can only own a maximum of 51 percen o i DELL 2 12 in local chains. Other retailers, such as Starbucks, have sales to the kiranas can provide enough revenue to make paired up with Indian companies, Starbucks has a 50-50 remaining in India worthwhile. joint venture with Tata, one of India's largest conglomer- ates Walmart also had plans for future joint ventures in India. In 2007. it announced a partnership with Bharti Questions Enterprises, but the relationship fell apart in the face of 1. In light of this situation, what would your recom- continued limitations on what the joint venture would be mendation be to Walmart? permitted to do. Allegations of corruption also soured 2. Should it stick with the wholesale focus, or the deal. The Indian government has frequently commit should it pursue another joint venture with an led to opening the retail sector to foreign investment, Indian partner? only to bow to pressures from local competitors, result 3. Alternatively, should it maintain a "wait and see ing in delayed or watered-down proposals. Recently, approach in hopes that the Indian government will however, the Indian government has once again finally reform its restrictions on foreign investment? announced new policies that would appear to open for- cign investment in retail. As a way to remain in the market, Walmart has shifted Sewer: John F. Burns, "India Now Winning US. Investment" New its attention to serving as a wholesale supplier to India's York Times February 6, 1995, p. CI, CS, Rawal Jacob, "India Gos small mom-and-pop stores, known as Kirunas. This is per Moving." For September 1994, pp. 101-100, Jon E. Hier "Honda Venture Takes the Bumps in India. The Wild Street Journal mitted because India does not maintain restrictions on August 2, 2000, p. Als: Manjeet Kriolani and Pote Engadili foreign investment in wholesale. The kiranas purportedly Shocking Election Upact Means Badia Must Spead Heavily on Social Need Murs Week, May 31 204; Steve "The Trouble sell more than 95 percent of the country's basic food with Indian Business, March 19, 2007, p. 48-58. "The W stuffs, creating a large opportunity for a wholesaler like Headache.The East December 2005: Gura Car Walmart. It is unclear, however, as to exactly what retail "How Slow GDP Growth Aflects Your December mole Walmart will be able to play long term and whether 2012 apdwww.imes.com o i DELL