When A Firm Enters Into A Joint Venture Agreement With A Local Firm

Answer: Earnings from joint venture 1. More advantageous: financially cheaper, since the local producer also provides a portion of the equity. Half of the capital is carried by local producers. It reduces the burden on foreign investors. 2. Favorable to projects requiring significant investment: it is advantageous for projects that require significant investments such as the construction of subways. For such projects, it is usually difficult for an individual investor to invest. 3. Knowledge of the host country: local producers pass on knowledge about the host country.

It helps the foreign investor to establish himself in the host country. 4. Less risky: the risk is reduced by the inclusion of local producers. First, it makes 50% equity and therefore losses and other risks. Second, it includes the tastes and preferences of customers in the host country, the laws and culture of the host country. Cons of joint venture 1. Technology sharing: In a joint venture, the foreign company shares the technology with the local manufacturer. It`s risky.

He can start his own business as soon as he becomes familiar with technology. 2. Conflicts: Management decisions can lead to conflicts due to the application of a dual ownership regime. For example, foreign companies may have joint ventures with Afghan infrastructure development organizations. Answer: India is the tenth largest economy in the world. It is the second fastest growing economy, alongside China. But India`s performance in international affairs is not very good. India`s share of world trade was only 0.8% in 2003. In absolute terms, the number of imports and exports has increased considerably. Total exports increased from 606 nurseries in 1950-51 to 2,367 kronor in 2003-04, while imports increased from 608 nurseries in 1950 to 3,59,108 nurseries in 2003-04. Exports increased 480-fold, while imports increased 590-fold, reflecting an unfavourable trade balance.

India`s main trading partners are the United States, the United Kingdom, Germany, Japan, Belgium, Hong Kong, the United Arab Emirates, China, Switzerland, Singapore and Malaysia. India`s main export products include: textiles, clothing, precious stones and jewellery, technical and chemical products, agriculture and related products. The main products imported from India are: crude oil and petroleum products, capital goods, electronic goods, pearls, precious and semi-precious stones, gold, silver and chemicals. Prior to 1991, the promotion of import substitution and export deterrence were a government strategy. Imports consisted of machinery, equipment and intermediate products for production, oil and petroleum products. After the Green Revolution, fertilizer imports also increased. Prior to 1991, India`s exports consisted of agricultural products such as tea, raw tree cotton, with a diversified industrial structure, encouraged by the substitution of imports, which increased exports of manufactures. In 1986-91, foreign trade accounted for only 13.40% of GDP. In 1990-2000, India`s foreign trade increased from $250 billion to exports and $380 billion in imports in 2010-11. The ratio of exports, plus imports to GDP, almost tripled from 13.40% between 1985 and 1990 to 37.7% in 2010/2011. Adding services from 22.9% in the 1990s to 49.0% in 2010-11.

The “invisibles,” which include both services, played a leading role, mainly software services, with exports increasing to $59 billion in 2010/2011. The current account deficit was reduced from $130 billion to $44. This deficit was filled by a capital surplus of $59 billion this year. But only because of IT services, and we still lack exports in the manufacturing sector, which can generate a large volume of jobs. We have not done as well as China and Malaysia. Perhaps you would also like to see what other companies are doing,