Recent trends in international and Indian business

The changing world economy is characterised by the opening up of emerging economies, and the simultaneously globalisation and regionalisation of markets, in an attempt to secure the economic development and performance benefits of exploiting international business. Countries have adopted policies to make themselves more profitable locations in order to attract investment. For their part, firms respond by seeking performance gains, but also interact with policy formation. In turn, governments also have to balance equity and efficiency in their policies.

India is an emerging player in world business, at a time when globalisation is gathering pace. It has taken second place to China, in terms of business activity and location, in the past decade. It has potential similar to China, however, and shares with it many characteristics such as a population of well over a billion, low wage costs, dramatic internal wealth disparities, a focus on inward foreign investment, a liberalising and reforming economy, a huge internal market and an important business-oriented Diaspora. Following the implementation of internal reforms leading to a reorientation of its economic direction, India has the potential to play a major role in the globalisation process that characterises the world economy in the 21st century. This will create challenges, not only for India itself and its firms, but also for Western firms, governments and citizens.

Unfortunately, these, and other issues related to the rise of India in international business have virtually received no attention by academics .

This is related to the fact that the stock of foreign investment in China in 2005 was more than ten times greater than that in India.

India is strongly conscious of its comparative position in relation to China, and many are determined that India’s potential should also be strongly realised. There are currently numerous high profile outsourcing moves to India by European and U.S. firms, and this trend is likely to continue. The problems and issues generated in complex interactions between firms, governments and citizens can be addressed by a research centre. The UK has had a privileged relationship with India for a century, and a further deepening of bilateral links between the two countries is increasingly likely to take place to the benefits of the parties involved.

International business academia has followed international business practice, and has devoted much more attention to China than to India.

Large analyst firms do not devote much attention to India either, which negatively impacts on the way India is perceived by the business community. When analysts do look at India, data are at best inaccurate or suspect. There is therefore a clear need to repair this glaring inadequacy in the attention structure of business and management academia.

To date, we know of no research institute in the academic world (outside India itself) which concentrates specifically on business and management in India and South Asia – with the exception of our dedicated research centre on Indian business, the James E Lynch India & South Asia Business Centre (ISABC) at the University of Leeds.