...3 A. 1. FOREIGN DIRECT INVESTMENT TRENDS AND DEVELOPMENTS RECENT TRENDS IN FOREIGN DIRECT INVESTMENT INFLOWS AND OUTFLOWS Global trends 15 Following what seemed to be a swift recovery from the global financial crisis in 2010-2011, global foreign direct investment (FDI) inflows have again taken a downward turn. As the world economic recovery continues to be uncertain and fragile, global FDI inflows have declined by 18%, from $1.65 trillion in 2011 to $1.35 trillion in 2012. Inflows decreased both in developed and developing economies.16 However, while the majority of developed countries experienced a significant reduction in their FDI inflows, by 32% on average, those to developing economies remained relatively resilient, declining by only 4% on average. More importantly, for the first time developing economies alone absorbed more FDI than developed countries, accounting for 52% of global FDI inflows (figure 3.1). Asia-Pacific Trade and Investment Report 2013 FIGURE 3.1 1400 1200 Billions of United States dollars 1000 800 600 400 200 0 2003 Foreign direct investment inflows to developed and developing economies, 2003-2012 2004 2005 2006 2007 2008 2009 2010 2011 2012 Developed economies Developing economies Source: ESCAP calculations, based on UNCTADStat. FIGURE 3.2 2000 Billions of United States dollars 1800 1600 1400 1200 1000 800 600 400 200 0 2003 2004 2005 2006 Foreign direct investment outflows from developed...
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...worldwide capacity to produce alumina was placed at around 80 mn tonnes in 2007 and was slated to touch 100 mn tonnes in 2010. Alumina accounts for about 22% of the cost in the production of aluminium. India's share in world aluminium market is estimated at around 3%. India ranks fifth in bauxite production after Australia (62 mn tonnes), Guinea (17.50 mn tonnes), Brazil (16.20 mn tonnes) and China (10.75 mn tonnes). With a total output of 9.25 mn tonnes, the country contributes about 6% of the world's total production of 159 mn tonnes, India holds the fifth position in reserves base and is ahead of China with 2300 mn tonnes. India ranked seventh in alumina production with a total output of 3 mn tonnes, a share of nearly 5% of the global production of 61 mn tonnes. The per capita consumption of aluminium in India continues to remain abysmally low at under 1 kg as against nearly 25 to 30 kg in the US and Europe, 15 kg in Japan, 10 kg in Taiwan and 3 kg in China. Aluminium has a wide range of applications, from aircraft building to packaging, a major consumer being the electrical industry. The two sectors, electricity and transportation, account for more than half of the total offtake. The key consumer industries in India are power, transportation, consumer durables, packaging and construction. Of this, power is the biggest consumer (about 44% of total) followed by infrastructure (17%) and transportation (about 10% to 12%). However, internationally, the pattern of consumption...
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...POSITION PAPER ON THE AIRPORTS SECTOR IN INDIA May 2009 Department of Economic Affairs Ministry of Finance Government of India AIRPORTS SECTOR EXISTING SCENARIO 1. The civil aviation traffic has seen an unprecedented traffic in the past few years on account of booming Indian economy, growing tourism industry, entry of low cost carriers in the private sector, liberalization of international bi-lateral agreements and liberalization of civil aviation policy. In future also the civil aviation traffic is expected to grow at the same pace despite current slowdown due to global recession. But airport infrastructure has not kept pace with the growth of the civil aviation traffic. This has resulted in congestion and inefficient services in major airports, limited landing slots, inadequate parking bays and congestion during peak hours for airlines. Development of quality infrastructure will have an impact on international competitiveness and economic growth. This requires faster development of civil aviation infrastructure on public private partnership mode. In tune with the requirement many initiatives have already been started in the 10th five year plan and they are expected to continue in the 11th plan also. 2. Of a total number of 454 airports and airstrips in India, 16 are designated as international airports. The Airports Authority of India (AAI) owns and operates 97 airports. A recent report by Centre for Asia Pacific Aviation (CAPA) states that over the next 12 years...
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...Abstract Skirosky and Tata joint venture to build S-92 cabins in India on a Greenfield facility is a business decision which can prove to be profitable for the United States and India based companies. There are pros and cons to the approach but can be quite profitable for both firms. A brief overview of both organizations is given, with their approach to the joint venture. An outline of possible challenges each organization could face along with followed with some recommendation as to how to overcome the challenges the companies may face. Sikorsky and TATA Joint Venture The Sikorsky Manufacturing Corporation was established in 1925 in Long Island New York by Igor Sikorsky a native of Russia who immigrated to the United States and restarted his aviation career after successfully designing a four engine craft. The company’s later became The Sikorsky Aviation Corporation. In 1929 after Sikorsky purchased land in Connecticut the company became a division of United Technologies Corporations. Sikorsky Aviation manufacture and designs fixed-wing aircrafts, military and commercial helicopter’s, spare parts and maintenance, repair and overhaul services for helicopters and fixed-wing aircraft; and civil helicopter operations (Skirosky.com, 2012). Sikorsky helicopters are used by all branches of the army, along with military services and commercial operators in 40 nations (Sikorsky.com, 2012). Sikorsky is the prime contractor in the U.S. Army’s UH-60M...
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...INTEGRATED CASE STUDY Case 12.4: Surfer Dude Duds, Inc.: Considering the Going-Concern Assumption* *This case was prepared by Mark S. Beasley, Ph.D. and Frank A. Buckless, Ph.D. of North Carolina State University and Steven M. Glover, Ph.D. and Douglas F. Prawitt, Ph.D. of Brigham Young University, as a basis for class discussion. The case was inspired by discussions with Craig Isom, a former audit partner, and we gratefully acknowledge his contribution to its development. Surfer Dude Duds is a fictitious company. All characters and names represented are fictitious; any similarity to existing companies or persons is purely coincidental. Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt Learning Objectives After completing and discussing this case, you should be able to * Understand the difficulty of assessing the client’s going-concern assumption * Describe the “self-fulfilling prophecy” aspect of a going-concern modified auditor’s report * Identify factors that encourage objective auditor judgments despite the presence of friendly client-auditor relationships Background Mark glanced up at the clock on his office wall. It read 2:30 P.M. He had scheduled a 3:00 P.M. meeting with George “Hang-ten” Baldwin, chief executive officer of Surfer Dude Duds, Inc. Surfer Dude specialized in selling clothing and accessories popularized by the California “surfer” culture. Mark had served as audit partner on the Surfer Dude Duds audit for the past...
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...Delhi-Mumbai Industrial Corridor (DMIC) Presentation Structure Concept of Industrial Corridors Delhi Mumbai Industrial Corridor Project Madhya Pradesh – advantages and opportunities DMIC – Madhya Pradesh Industrial Corridor-Concept Corridor Development concept is primarily to take advantage of underutilized potential by ensuring effective integration between industry and infrastructure • Leads to economic and social development To develop a sound industrial base served by world-class competitive infrastructure • Prerequisite to attract investments into export oriented industries and manufacturing Around the World, industrial corridors have been built along major transport arteries, i.e. road and rail trunk routes 3 Industrial Corridor-Concept Advantages of Industrial Corridor development approach: Closer economic integration Improvement in transit-transport efficiency Ensures balanced regional development Harnesses latent economic potential Enhances economic competitiveness Promotes regional trade and investment Promotes innovation and development of high technology regions Improved quality of life Enablers Manufacturing base Procurement/Sourcing Multi-Modal Logistics Support Distribution Network Example of Industrial Corridor “Tokyo-osaka industrial corridor” of Japan: Along 515 km Tokaido-Shinkansen High Speed Railway, built in 1964 The network now totals about 2000 km Connects three...
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...Foreign Direct Investment (FDI) to India Ramkishen S. Rajana, Sunil Rongalab and Ramya Ghoshc April 2008 --------------------------a) George Mason University, Virginia, USA. E-mail: rrajan1@gmu.edu . b) International Professional Services Organization, Hyderabad, India. E-mail: sunil.rongala@gmail.com c) Claremont Graduate University, California, USA. Email: ramya.ghosh@cgu.edu We thank Rajeev Ranjan Chaturvedy for useful research assistance. The usual disclaimer applies. 2 1. Introduction Economic policymakers in most countries go out of their way to attract foreign direct investment (FDI). A high level of FDI inflows is an affirmation of the economic policies that the policymakers have been implementing as well as a stamp of approval of the future economic health of that particular country. There is clearly an intense global competition for FDI. India, for its part, has set up the “India Brand Equity Foundation” to try and attract that elusive FDI dollar. According to UNCTAD (2007), India has emerged as the second most attractive destination for FDI after China and ahead of the US, Russia and Brazil. While India has experienced a marked rise in FDI inflows in the last few years (doubling from an average of US$5-6 billion the previous three years to around US$ 19 billion in 2006-07) (Figure 1), it still receives far less FDI flows than China or much smaller economies in Asia like Hong Kong and Singapore was ahead of India (Figure 2). Not surprisingly India’s...
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...OVERVIEW Apollo Tyres Ltd, with its corporate headquarters in Gurgaon, India, is in the business of manufacture and sale of tyres since its inception in 1972. Over the years, the company has grown manifold, establishing its footprint across the globe. The company has manufacturing presence in Asia, Europe and Africa, with 8 modern tyre facilities and exports to over 100 countries. Powered by its key brands — Apollo and Vredestein, the company offers a comprehensive product portfolio spread across passenger car, light truck, truck-bus, off highway and bicycle tyres, retreading material and retreaded tyres. At the end of its financial year on March 31, 2013, Apollo Tyres had clocked a turnover of US$ 2.34 billion, backed by a global workforce of approximately 16000 employees. Apollo Tyres Ltd is traded in India on the Bombay, National and Kochi Stock Exchanges, with 56.5% of shares held by the public, government entities, banks and financial institutions as on September 30, 2013. ATL has tremendous leverage in the international tyre market and with technology skills of the Indian company would be integrated to the newly acquired plants to generate better operational efficiency and also improve production and productivity. Sourcing of raw materials like natural and synthetic rubber and chemicals could be made more efficient because of the acquisitions in the European arena and could result in better economies of scale for Apollo tyre. To diversify its presence in global...
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...A “Calibrated Approach”: Pharmaceutical FDI and the Evolution of Indian Patent Law Web version: August 2007 Authors: Katherine Connor Linton and Nicholas Corrado1 Abstract India has charted its own intellectual property (IP) path over the last 35 years, attempting to foster the growth of a domestic pharmaceutical industry and access to medicine while, more recently, also addressing the requirements of the international IP regime. Multinational companies (MNCs) have responded to India’s movement towards compliance with the W TO intellectual property agreement, TRIPS, by increasing the quantity and quality of foreign direct investment (FDI) in the areas of pharmaceutical research and development (R&D) and manufacturing. By contrast, MNCs have adopted a more cautious attitude toward the patenting and commercialization of new pharmaceutical products in India, waiting to see how Indian courts and patent offices interpret the new laws, and awaiting the enactment of longdebated data protection legislation. The ultimate success of the Indian “calibrated approach” to fostering the domestic industry and access to medicine while also addressing international IP requirements remains to be seen. 1 Katherine Connor Linton (katherine.linton@usitc.gov) is the International Trade Analyst for Intellectual Property and Nicholas Corrado was a law student intern in the Office of Industries of the U.S. International Trade Commission (USITC). The views expressed are those of Ms. Linton and...
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...Indian Steel Industry India is among the top producers of all the form of steel in the world. Low cost manpower and the abundance of iron ore and coal reserves makes India highly competitive. India became the 4th largest producer of crude steel in the world in 2010 as against the 8th position in 2003 and is expected to become the second largest producer of crude steel by 2015. The country has acquired a central position on the global steel map with its giant steel mills, acquisition of global scale capacities by players, continuous modernization and up-gradation of old plants, improving energy efficiency and back integration into global raw material sources. A new research report Indian Steel Industry Outlook to 2012 says that the, Indian crude steel production will grow at a CAGR of around 10% during 2010-2013. The demand for steel is a derived from the demand from other sectors like automobiles, consumer durables, and infrastructure. With the government proactive incentive plans to boost economic growth by injecting funds in various industries, such as construction, infrastructure, automobile, and power will drive the steel industry in future. Led by strong demand for autos and engineering services, the domestic steel demand in India remains robust, as per Moody's sectoral analysis on Asia's steel sector. According to the analysis, the outlook for the domestic operating environment is positive, driven by robust growth in infrastructure, autos and construction and constrains...
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...Student-Nr. W11035726 Total words: 2790 1. A good acquisition program helps the acquirer to identify a target partner. An acquisition program should contain a clearly defined core strategy, the goals of this activity, and a detailed risk management. The identification of the right company depends on the analysis of target market. Companies react when they recognize benefits in some certain markets. It is essential for an acquirer to analyse the market, is there any market in transition that could lead to any competitive advantages or any business capacities that could be useful (Chatterjee). Kraft has to consider which qualifications they seek in the business partner and which one complementary or expand their capacities. (Cavusgil, Knight and Riesenberger, 2008) An analysis of the macro environment of Kraft shows that they have the opportunity to become the world’s largest confectionery. This market prospect allows Kraft to minimize the threats of competitors. It is a strategy to eliminate or to minimize competitors. (Chatterjee) In food and drink manufacturing, the technology is relatively mature. The global food market shows oligopolistic structures and the competition is intense. As a result of that, the market growth almost remains static. (Ramsay, 2000) In addition, different national tastes and preferences may cause also restrictions for international expansion. (Kapferer, 1997; Yip, 1992). A lot of companies consider acquisitions as essential strategies...
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...3. Discussion ABC Limited should choose a suitable market entry strategy before they enter India. There are five models of entry, including exporting, licensing, franchising, specialized modes and foreign Direct Investment (Griffin and Pustay, 2013). Appendix table 1 shows advantages and disadvantages of different modes of entry. Foreign Direct Investment is one of the modes of entry and it is suitable entry model for ABC Limited. Because according to compare with them, Foreign Direct Investment maintains more control and high profit potential in Business than others (details in table 1). Foreign Direct Investment refers to an investment made by business enterprise in one country into a company in another country (Oxford Reference, 2009). It...
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...Gujarat’s Mehsana district in 2011 from the state government soon after it announced its intention to set up a third manufacturing unit (besides Gurgaon and Manesar in Haryana) in the state. It planned to invest Rs 3,000 crore on a greenfield plant. However, the announcement that the plant would be set up by a 100 per cent subsidiary of SMC (which owns 56.21 per cent in Maruti Suzuki) — and not by Maruti Suzuki — left shareholders, investors and fund houses, who collectively own the remaining 43.79 per cent, stunned. Under the new proposal, Maruti Suzuki will be buying all of the plant’s production and selling it in the domestic market for a profit. Shareholders feared SMC was shortchanging Maruti Suzuki shareholders for its own gains. Maruti Suzuki’s call to review its decision came only after the Securities and Exchange Board of India (Sebi) took note of the controversy. Sebi wrote a letter to the company, to find out the price at which the SMC-run Gujarat plant would sell cars to Maruti Suzuki. Then, fund houses, along with some other minority shareholders, wrote to Maruti Suzuki, threatening to lodge a complaint with the Company Law Board. The board of directors of Maruti Suzuki India (MSIL) on Saturday, 15 March 2014, reviewed the Gujarat project in the...
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...positive factory production is another bright spot, with annual industrial output expanding 4.2 percent in July, 6.3 percent in August and 3.6 percent in September. The upshot is ultimately buoyed growth, but it's still far from full-throttle, said Vishnu Varathan, senior economist at Mizuho Bank. "Admittedly, with softer inflation boosting consumption, a less dire-than-expected monsoon outcome and nascent industrial uptick, India is still the bright spot in Asia. But growth momentum is not, as yet, on a solid footing." Experts widely agree that India's biggest problem is a negative output gap, i.e. the difference between actual production and what could be produced under full capacity. "We believe that the root cause of the challenging macro environment in India over the past few years has been the sharp deterioration in the productivity dynamic. This stemmed from a high fiscal deficit, high rural wage growth, negative real interest rates and slowdown in the government's executive decision-making process," Morgan Stanley said. The Reserve Bank of India (RBI) has slashed interest rates by a total of 125 basis points throughout the 2015 calendar year, but that's failed to...
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...teelIRON AND STEEL INDUSTRY IN INDIA Corporate Catalyst India A report on Indian Iron and Steel Industry OVERVIEW 1.1 Background The Indian iron and steel industry is nearly a century old, with Tata Iron & Steel Co (Tata Steel) as the first integrated steel plant to be set up in 1907. It was the first core sector to be completely freed from the licensing regime (in 1990-91) and the pricing and distribution controls. The steel industry is expanding worldwide. For a number of years it has been benefiting from the exceptionally buoyant Asian economies (mainly India and China). The economic modernization processes in these countries are driving the sharp rise in demand for steel. The New Industrial policy adopted by the Government of India has opened up the iron and steel sector for private investment by removing it from the list of industries reserved for public sector and exempting it from compulsory licensing. Imports of foreign technology as well as foreign direct investment are freely permitted up to certain limits under an automatic route. This, along with the other initiatives taken by the Government has given a definite impetus for entry, participation and growth of the private sector in the steel industry. While the existing units are being modernized/expanded, a large number of new/greenfield steel plants have also come up in different parts of the country based on modern, cost effective, state of-the-art technologies. Soaring demand by sectors like infrastructure...
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