Question

India has become one of the favourite markets for all multinational companies explain this statement logically???​

Answer 1

here is your answer

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Answer 2

1. Lower labour costs: The labour costs are always lower in underdeveloped and developing countries and the work force can be trained equally well for all the skills needed to perform the job. Accordingly, the multinational corporations can concentrate their labour intensive operations in such countries.

2. Potential for high rate of return on investment: Higher profit is the major reason why any organization would become global in operation, because these new opportunities are not generally available in the domestic market either due to saturation of the market or severe price competition. Furthermore, it is possible to charge higher prices for the product in new markets.

3. Expanded markets: A multinational company which has a global base and is worldwide oriented has access to a much larger market for their product. India alone, with a population of nearly 900 million people provides a large market for consumer goods. China, with more than 1.2 billion people is opening up to products, both consumer as well as industrial, produced in the western countries.

4. Availability of capital resources: With a broad base of operations, a multinational company has a much wider access to financial resources, especially in joint ventures. Even the governments of many countries provide capital requirements in order to lure the organizations to build operational facilities in their countries.

5. Availability of natural resources: International activities can increase access to raw materials and other natural resources. Many developing countries have unexplored natural assets that can be highly utilised. Companies operating in many countries, thus have a much broader base for raw materials.