Why MNCs prefer India as their destination for setting business? from Social Science Globalisation and The Indian Economy Class 10 Jharkhand Board (2024)

FAQs

Why is India a preferred destination for MNCs? ›

As a developing nation the Indian market provides a very sustainable environment MNC'S and other Business. The economy is also favourable to business as it remains stable and continues to grow.

Here, resources such as labour and materials are generally cheaper than in the home country. Developing countries will also have more flexible rules and regulations. In return, MNCs introduce modernization, contribute to infrastructure growth, stimulate the economy, provide employment, and reduce the technological gap.

Markets in India are selling goods produced in many other countries. This means there is increasing trade with other countries. Moreover, the rising number of brands that we see in the markets might be produced by MNCs in India. MNCs are investing in India Because of the cheaper production costs.

(i) They have invested in newer technology and production methods and raised their production standards. (ii) Some have gained from successful collaborations with foreign companies. (iii) Globalisation has enabled some large Indian companies to emerge as multinational themselves.

India has become a favorite outsourcing destination because, in India, work can be performed at a cheaper cost with a reasonable degree of skill and accuracy. Hence, foreign countries use to outsource their services from India.

In India, a strong and stable economy, dramatically widening incentive programmes, infrastructural improvements, and access to a large labour supply, form the basis of its appeal to investors.

MNCs have production and marketing operations in several countries; operating through a network of branches, subsidiaries and affiliates in host countries. MNCs are characterized by unity of control. MNCs control business activities of their branches in foreign countries through head office located in the home country.

They include (a)Availability of more reliable and up-to-data data and information. (b) They enjoy market reputation. (c) They face less difficulties in marketing the products. (d) They adopt more effective advertising and sales promotion techniques.

Globalisation helps in pooling all the resources together. Globalisation helps in the development of underdeveloped countries. Globalisation encourages free trade among nations. Globalisation creates more employment opportunities.

(i) The availability of variety of products enabled the consumers to have greater choice and enjoy the improved quality and lower prices for several products. (ii) This led to a higher standard of living. (iii) Increase in foreign direct investment. (iv) Creation of new jobs in certain industries.

What are the important globalization strategies employed by Indian companies? ›

➢ Three strategy types for Indian companies in overseas markets: 'Outsourcing,' where the domestic market is either very small or unattractive; 'Internationalization,' where companies are aiming to expand market or balance business downturns and risks of domestic market; and, 'Multinationalization,' where companies are ...

India is the top destination being explored by multinational corporations as an alternative to China, according to a survey of 100 CEOs who primarily represent foreign B2B-focused firms. The CEOs also consider Vietnam, Thailand and their own home countries as potential options.

- A location where low-cost unskilled or skilled labor is readily available is an apt location where the MNCs set up to carry out production. - Another extremely important criterion the location must satisfy is that regions must have stability in the common production factors.