Comparative analysis of the attractiveness of usa and india for fdi
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Comparative analysis of the attractiveness of USA and India for FDI. Group member:. Background Information. USA A leading developed country The world's third largest country in area with 50 states and a federal district. One of the world's largest manufacturers

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Background information
Background Information for FDI

USA

  • Aleading developed country

  • The world's third largest country in area with 50 states and a federal district.

  • One of the world's largest manufacturers

  • Has the largest consumer market in the world

  • Highly innovative environment

  • It has attracted the largest proportion of foreign direct investment (FDI) since 2006


Background information1
Background Information for FDI

India

  • Located in South Asia

  • The second-most populous country (>1.2 billion population)

  • Democratic government

  • Two major parties in the politics: BharatyaJanata party (BJP) and Congress

  • One of the fastest-growing economies in the global area

  • Diverse economy

  • The government made additional reforms to attract more FDI in 2012

  • Significant national issues, eg. poverty, inadequate public healthcare, corruption and malnutrition


Definition of comparative ananlysis
Definition of Comparative for FDIAnanlysis

  • Comparative analysis is a sort of approach which can be employed to compare and contrast two different things, including two countries, two theories, two figures, two processes.

  • It is based on the numerous collected data of two different cases.

  • By using comparative analysis, the similarities and differences between two different items can be clearly presented, from which some relevant decisions can be made according to the comparison results.


Comparison for four pestle factors of usa and india
Comparison for four PESTLE factors of USA and India for FDI

  • Political

  • Economic

  • Social

  • Technological


Comparison for political factors of usa and india
Comparison for for FDIpolitical factors of USA and India

USA

India

Benefit

Stable political system

New projects in transportation sector and power generation.

Risk

Potential political instability due to its election in 2014

Cost

The low working efficiency and the complicated process in Indian government departments

  • Benefit

  • Open investment policy

  • Policy of ‘Build where you sell’

  • A promising outlook in trade policy

  • Risk

  • Potential terrorist attack

  • Cost

  • The federal budget deficits


Comparison for economic factors of usa and india
Comparison for for FDIeconomic factors of USA and India

USA

India

Benefit

Growth in GDP, consumption and investment

Risk

The decreasing domestic resources –the lack of skilled labour force

52% of labour force is employed by the agriculture industry

Cost

Increased interest rate

lack of infrastructure

High inflation rate 3.8%

  • Benefit

  • The largest economy in the world

  • Decreased unemployment rate to 7%

  • Risk

  • The financial crisis in 2007

  • Cost

  • Facing increasingly fierce competition



Comparison for social factors of usa and india
Comparison for for FDIsocial factors of USA and India

USA

India

Benefit

Risk

6% of GDP expenditure in healthcare

India HDI only ranks a low 134 among 187 countries

Cost

High level of corruption, ranks 94 of 176 countries with a score of 36

  • Benefit

  • Healthcare expenditure in 2011 accounted for 18% of GDP

  • U.S had a HDI of 9.5%, ranking the seventh of 187 countries

  • Low level of corruption

  • Risk

  • Deliberate malware made by criminals may pose threat to the IT system of a company

  • Cost


Comparison for technological factors of usa and india
Comparison for for FDItechnological factors of USA and India

USA

India

Benefit

Advantage in technical manpower, particularly in information technology

Expertise in call centres, business back –office operations, IT services, and R&D

Risk

If there is not sufficient budget for innovation,companies’ competitive edge may be damaged

Cost

  • Benefit

  • Increase of long-term natural gas supply

  • Lower price of natural compared to European member countries

  • Advanced innovation capacity, with a particular strength in R&D

  • Risk

  • companies’ competitiveness may be damaged without sufficient innovation fund

  • Cost

  • The rapid development in the modern technology put heavy pressure on the R&D of a company


Conclusion and recommendation for austrade
Conclusion and Recommendation for for FDIAustrade

  • The United States is a better destination for FDI

  • Advantages: highly supporting political environment, strong economy basis, better social environment and technological advantages

  • Similar culture background, language, social value and religion with Australia


Thank you ! for FDI


References
References for FDI

  • Bureau E.T.(2012). ‘India seen as an attractive destination for foreign direct investment’, Retrieved April 8, 2014, from http://articles.economictimes.indiatimes.com/keyword/foreign-direct-investment

  • Central Intelligence Agency. (2013). Retrieved April 9, 2014, from https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

  • Corruption Perceptions Index 2012, Retrieved April 8, 2014, from http://www.transparency.org/cpi2012/results

  • Foreign Direct Investment in the United States. (2013). Retrieved April 10, 2014, fromhttp://www.whitehouse.gov/sites/default/files/2013fdi_report_-_final_for_web.pdf


  • Kornecki for FDILucyna. (2013). ‘Inward FDI in the United States and its policy context’. Retrieved April 8, 2014, from http://www.vcc.columbia.edu/files/vale/documents/US_IFDI_-_FINAL_-_REVISED_Feb_4_2013.pdf

  • Moran Zhang. (2013). ‘US November Jobs Report 2013: Unemployment Rate Falls To 7.0%, Nonfarm Payrolls Rise By 203k’, Retrieved April 8, 2014, from http://www.ibtimes.com/us-november-jobs-report-2013-unemployment-rate-falls-70-nonfarm-payrolls-rise-203k-1498230

  • OECD Health Data: Health expenditure and financing, Retrieved April 8, 2014, from http://www.oecd-ilibrary.org/social-issues-migration-health/data/oecd-health-statistics_health-data-en


  • Politi for FDI James. (2013). ‘Barack Obama unveils plans to attract foreign investment’. Retrieved April 8, 2014, from http://www.ft.com/intl/cms/s/0/e3ad9d9c-41f4-11e3-9d3c-00144feabdc0.html#slide0

  • Rapoza Kenneth. (2012). ‘On Political Risk & Terrorism, U.S. Riskier than Botswana’, Retrieved April 8, 2014, from http://www.forbes.com/sites/kenrapoza/2013/05/15/on-political-risk-terrorism-u-s-riskier-than-botswana/

  • United Nations Development Programme. (2013). Human Development Reports Retrieved April 10, 2014, from http://hdr.undp.org/en/media/HDR2013_EN_Statistics.pdf.


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