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INTRODUCTION
India is the second most populated country in the world, with nearly one
billion people. It has a reasonably favorable pro-business environment
that aims to attract multinational companies (MNCs). Because of this
enormous market size and positive business climate, scores of American
firms--including General Electric, General Motors, McDonald's,
Kellogg's, and Microsoft--have recently entered the Indian market. As a
result, the country has forged strong commercial interests with the
United States, with trade and business relations across many industrial
sectors. In fact, the U.S. is India's leading source of technology and her
most valuable investor.
India, for some time now the focal point of the global trend toward
strategic off shoring, has simultaneously become appealing as a
market in its own right. With GDP growth more than double that of
the United States and the United Kingdom during the past decade,
and with forecast continued real annual growth of almost 7 percent,
India is one of the world's most promising and fastest-growing
economies, and multinational companies are eagerly investing
there.
Yet the performance of the multinationals that have tried to exploit
this opportunity has been decidedly mixed. Many of those notable
for their strong performance elsewhere have yet to achieve
significant market positions (or even average industry profitability)
in India, despite a significant investment of time and capital in its
industries. Why? Perhaps because the market entry strategies that
have worked so well for these companies elsewherebringing in
tried and tested products and business models from other countries,
leveraging capabilities and skills from core markets, and forming
joint ventures to tap into local expertise and share start-up costs
are less successful in India. Our research suggests that the most

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successful multinationals in India have been those that did not
merely tailor their existing strategy...
About Indian Market
Indian economy is growing at a faster pace in comparison to other
nations and has shown resilience in times of global financial crisis.
Today, the Indian market with about 1 billion population has
become a hub of opportunities for the foreign investors, who can
clearly see the chances of massive growth and expansion here. The
major sectors like environment, infrastructure, energy,
transportation, defense and healthcare with their rising demands
beckon them to India market entry.
Types of Indian Market -
Free Markets - Usually free markets are operational under the
'laissez-faire' conditions - where there is no government
intervention. A free market may get distorted if there exists a
monopolistic situation (seller controlling major portion of the
supply) or a monopolistic situation (a buyer having power on
majority of the demand). In case of these distortions, the
government or business bodies make an entry to ensure that the
free markets operate smoothly.

Currency Markets - Currency markets are among the largest traded
markets in the globe, on a continual basis. Money flows are
continuous around the globe - governments, banks, investors and
consumers - all of them are involved in buying and selling currency
round the clock. That is the velocity of money is huge with so many
constantly changing hands.

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Stock Markets - Stock markets seem to be the backbone of any
economy - and of late they have become the most complex structure
allowing investors the scope of buying and selling shares in
multitude companies. Majority of the Indian stock markets are
operating on an electronic network, with a physical location being
maintained for buyers separately. This is the place where the parties
involved can interact with each other directly.

India GDP has registered 6.7% growth in the period 2008-09.
According to statistics, India has the ability to sustain the
growth rate of 8 to 10% in the coming years. The current
growth rate and the projected figures serve as perfect bait for
the foreign investors.


Market Entry Strategy
As India rapidly emerges into a major market for global businesses,
most firms need to explore the Indian business landscape to tap the
growing market, or to seek resources.
We develop a strategy for Global Clients to enter the Indian market
by leveraging our extensive knowledge of the Indian business
environment.


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Factors dominating India Market Entry-
There are many foreign companies eyeing opportunities in
India. For an entry into Indian market, they need to be careful
about certain points to make it really big. These include:
The real worth of the Indian Market can be illustrated in
the following manner: Finding good partners who know
local market well and are completely acquainted with
procedural issues
Smart planning Identifying the target market Promotion
of products and services Contacting apt agents and
distributors
With these, the foreign investors also need to explore
various market options in India that include forming
subsidiary relationship or a joint venture with an India-
based company. It also comprises setting up of a branch
office or a liaison office.
Steps for India Market Entry-
Several important steps to enter into Indian market are:
Identifying potential of the particular market in India
Developing a fair knowledge of the market
Creating strategies for market entry
While venturing into Indian market, it is very important for
any investor to develop a basic knowledge of the potential of the

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concerned market in India. This process, in turn, should be
supported by a sound market entry strategy. The job does not end
here. It requires proper implementation also for desired results.


However, there are some obstacles as well on the path to the
market entry in India. The possible impediments are:
Rigid and complex social framework
Indian Bureaucracy
Infrastructure issues
India is a nation with diversified cultures and hence it is difficult to
implement any major change in social structure or introduce
financial reforms unanimously. However, the outlook is gradually
changing and government is pushing hard to make effective
changes. Efforts are being made to cut down on the red-tape.

There are certain infrastructural issues that also need to be resolved
as fast as possible. Poor road conditions and shortage of power
supply are some of the infrastructural problems in India. However,
government is adopting useful measures in these areas as well to
attract foreign investors to the nation. It has approved eight
highways projects that will need an investment of Rs 10 crore.

Hence, with steps being taken up to improve situations, it is most
likely that an entry into Indian market will no longer remain a
tedious and long-drawn process


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Factors influencing the choice
of entry mode
Internal factors:
- firm size, international experience, product/services
External factors:
socio-cultural distance between home country and host
country
Country risk/demand uncertainty
Market size and growth
Direct and indirect trade barriers
Intensity of competition, small number of relevant
intermediaries available
Conclusion
Any company that desires to enter the Indian market must realize the
serious challenges of doing business there: segmenting the
marketplace properly, understanding the country's economic and
political situations, getting through the government bureaucracy, and
understanding deep-seated cultural biases and attitudes. It is hoped
that demonstrating the Indian marketplace in terms of market
potential, culture, consumer behavior, and selling aspects aid MNC
executives in facing those challenges successfully.