Data Collection And Analysis For India - Coursework Example

 Data Collection And Analysis For India Table of Contents Why India? 1 Infrastructure analysis for India 4 Reference list 6 Why India? India is considered as a new promising market for foreign companies in the present decade. The economy of India is one of the fastest growing economies in the world. India has experienced a rapid growth in consumer class, which is why opportunities for various companies from different sectors are high. It is predicted to become the fifth largest consumer market by 2025. This is one of the most important reasons for choosing India as the target market for expansion of the retail business (Equitymaster Agora Research Private Limited, 2014; Committee on India Vision 2020, 2004). India is one of the leading emerging markets, which have the capability to attract foreign investors for capitalizing their business in the land of developing the middle class. The consumption rate of this developing middle class has increased to a great extent, which has attracted many companies to commence business. Another major reason for choosing India is that foreign companies have the opportunity to exploit advantages present in the economy (Equitymaster Agora Research Private Limited, 2014). The advantages are related to the development of infrastructure, manufacturing units, and the consumer’s products. It is an attractive market because of the large population and escalating market growth. Then again, there are potential risks too, which are regarded as major challenges for companies about to enter India. Despite the potential risk, India is an appropriate emerging market for the retail company. It is observed that India has simplified the rules and regulations pertaining to the entry of foreign investors in 2012, which is a good opportunity for the Japanese retail company. India has developed a deregulated market-driven economy. The economy is consumer focused and technology has replaced labor. Presently, a number of modifications in policies have encouraged Foreign Direct Investment (FDI) (Phillip, 2014; Equitymaster Agora Research Private Limited, 2014). The government of India has also reduced stringent regulations on exchange control for the companies which are willing to set up their business in India. The foreign companies will have the liberty to select skilled manpower from the population and train them according to their requirement. The corporate tax rate in 2014 is observed to be 33.99%, which is constant for the last 10 years (KPMG, 2014). Figure 1: Corporate Tax rate in India for the last 10 years (Source: Trading Economics, 2014a) The corporate tax in India is observed to have declined during January 2012. The rise in corporate tax is not too favorable for any foreign business as the higher amount of taxes are required to be paid. The structure for personal tax in India is provided in the figure below: Figure 2: Personal Tax rate (Source: Finotax, 2014) From the above figure, it can be concluded tax rate acts as a major barrier for the middle-class family for the purpose of making greater investments to lead a luxurious life. The tax rate can also pose as the barrier for sales of the retail company as middle-class individuals will prefer to purchase from limited low-priced shops. This is because they perceive that big retailers include establishment charge within the product price (Trading Economics, 2014b; Equitymaster Agora Research Private Limited, 2014). Despite the disadvantages pertaining to the high tax rate, India is an appropriate economy to establish the retail business as the consumption rate is high. Infrastructure analysis for India The infrastructure analysis of India includes evaluation of roads, airports, railways and internet communication. The foreign firms in India do not have their own infrastructure for executing projects. Railway The Indian government has taken into account the existing gaps in infrastructure and the restricted capacity of rail system. The development and the investment made are not equal in this system for the financial year 2007-2012. Recently, this gap has been realized and the officials are taking actions to rectify the situation. 40% of the investments made for development of the railway system are expected to come from the private sector (ProceWaterHouseCopopers, 2014). There are few Public-Private-Partnership programs that have initiated the developmental programs in this sector. New railway routes for cargo trains have been placed between Mumbai and Delhi; Delhi and Kolkata so as to bridge the distance in trade. The metro railways are also developed in order to increase satisfaction and convenience of passengers (ProceWaterHouseCopopers, 2014; Equitymaster Agora Research Private Limited, 2014). Roads Indian roads are congested, which is mainly due to increase in a number of vehicles over years. The annual growth is recorded to be 12% (passenger) and 10% (cargo) (ProceWaterHouseCopopers, 2014). The Indian government has estimated that $90 billion is required for improving roads and highways of the country. Several projects are planned via the National Highway Development Program (NHDP), which anticipates expanding roadway to around 13,000 km. The development of highways has helped the population to travel easily from one part of the country to another. The highways have helped to reduce traffic congestion (ProceWaterHouseCopopers, 2014; Equitymaster Agora Research Private Limited, 2014). Telecommunication Telecommunication sector in India is built around few segments such as, USOF, licensing, FDI, spectrum, security and consumer affordability (Frost and Sullivan, 2006). Bharat Sanchar Nigam Limited (BSNL) was the most renowned telecom provider in the Indian market. The company had obtained a large market share in the telecom industry, but emergence of a number of private companies like, Airtel and Vodafone, had threatened the existence of BSNL. Presently, with the rampant use of mobile phones countrywide, the demand for BSNL connection has declined drastically. There are few policies that have ruled the telecom market for the past few years: 1) On 31st August 2001, Communication Convergence Bill was passed by the Parliament, which ordered the telecom industry to follow rules pertaining to IT. 2) National Long Distance Service (NLD) introduced new policies for unrestricted entries. 3) The International Long Distance Services (ILDS) have been opened to competition (Equitymaster Agora Research Private Limited, 2014). 4) Licensing for Multiple Fixed Service Providers (FSPs) guidelines were introduced. 5) Internet Service Providers (ISPs) are allowed to set up International Internet Gateways for both Landing and Satellite stations (Equitymaster Agora Research Private Limited, 2014; Frost and Sullivan, 2006). Reference list Committee on India Vision 2020, 2004. India Vision 2020: The Report: Report of the Committee on India Vision 2020. New Delhi: Indian Planning Commission. Equitymaster Agora Research Private Limited, 2014. Telecom Sector Analysis Report. [online] Available at: < http://www.equitymaster.com/research-it/sector-info/telecom/Telecom-Sector-Analysis-Report.asp > [Accessed 26 June 2014]. Finotax, 2014. Income Tax Slabs & Rates for Assessment Year 2013-14. [online] Available at: < http://finotax.com/income-tax/slabs > [Accessed 26 June 2014]. Frost and Sullivan, 2006. The Indian Telecom Industry. [online] Available at: < https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&uact=8&ved=0CDcQFjAE&url=http%3A%2F%2Fwww.frost.com%2Fprod%2Fservlet%2Fcpo%2F2863885&ei=WRqsU4_gM8y6uASzyYGwAQ&usg=AFQjCNHckX0vi0ykuq5NOlhFb-NRwHZh2Q&bvm=bv.69837884,d.c2E > [Accessed 26 June 2014]. KPMG, 2014. Individual Income Tax Rates Table. [online] Available at: < http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/individual-income-tax-rates-table.aspx > [Accessed 26 June 2014]. Phillip, J., 2014. Expansion is best served in domestic markets for Indian, Chinese retailers. [online] Available at: < http://www.livemint.com/Money/h9PElQ51CGCSsE1cDKxpPI/Expansion-is-best-served-in-domestic-markets-for-Indian-Chi.html > [Accessed 26 June 2014]. ProceWaterHouseCopopers, 2014. A Vast Land Of Construction Opportunity. [pdf] PWC. Available at: < https://www.pwc.in/en_IN/in/assets/pdfs/infrastructure-in-india.pdf > [Accessed 26 June 2014]. Trading Economics, 2014a. India Corporate Tax Rate. [online] Available at: < http://www.tradingeconomics.com/india/corporate-tax-rate > [Accessed 26 June 2014]. Trading Economics, 2014b. India Personal Income Tax Rate. [online] Available at: < http://www.tradingeconomics.com/india/personal-income-tax-rate > [Accessed 26 June 2014]. Read More