I have chosen India as the most favorable destination for the export prospects of Blakleyovich Enterprises. India is a developing country with diverse business opportunities. During the past couple of years, India has emerged as a major business hub and a favorite destination for multinational companies. “Driven by the growth rate of over 8% in 2010 and a 350 million strong middle-class increasing purchasing power, the Indian market today is shaping the world’s economy” (Pathak, 1). India is also politically stable and the current Congress led government is expected to complete its term that ends in 2014.
There was a steep drop in the country’s GDP growth during the financial year ending March 2013. ‘The Economist Intelligence Unit’ suggests that it is not a matter of grave concern because the Indian government has already taken strict measures and “a series of economic reforms since September 2012 to tackle the fiscal deficit and boost foreign investment” (The Economist, 1). Such actions, coupled with the strong global economy, are expected to enhance India’s GDP growth during the current fiscal year. Further, “India has emerged as the fourth largest economy globally with a high growth rate and has also improved its global ranking in terms of per capita income” (India Budget, 348). The Economic Intelligence Unit’s forecasts suggest the following figures pertaining to the Indian GDP:
It is encouraging to note that “Real GDP growth is forecast to average 6.4% a year in 2012 – 30, making India the fastest growing large economy in the world during the period” (The Economist, 1).
As far as the Indian currency is concerned, there has been a slow but steady increase in the conversion rates (to US Dollar). The chart at figure 2 depicts the changes in the conversion rates over the past couple of years.
The Internal Revenue Service of India declared the following average changes in the conversion rates as compared to US Dollar: 2010 to 2011 – 2.82% and 2011 to 2012 – 13.81% (IRS, 1). As compared to 2012, there was an increase of 3.76% in the conversion rate from US Dollar to Indian Rupee (YCharts, 1).
The constant increase in the conversion rate is a positive sign for multinational companies that want to initiate business activities in the country. Blakleyovich Enterprises will have to spend fewer rupees irrespective of the fact that the dollar cost remains the same.
The following forecasts, pertaining to the Indian business environment, by The Economist Intelligence Unit are also encouraging:
It is estimated that Indian business environment will experience an upsurge during the mentioned periods. “The country’s overall score in the Economist Intelligence Unit’s rankings rises to 6.04, from 5.48 in the historical period. India’s global ranking rises by four places in 2012 – 16, to 56th out of 82 countries” (The Economist, 1).
India has a business friendly environment. There is a huge population of the labor class in the country, making it easy to arrange workers for various jobs (ABL Overseas 2013, India – A cultural perspective.). There are certain constraints as well but those are minor ones and can be managed easily. The Indian market is very sensitive about the prices. So the pricing of products has to be very competitive. But overall, India is the best place to invest in new ventures.
Works Cited
India Budget 2013, India and the global economy. Web.
IRS 2013, Yearly average currency exchange rates. Web.
Pathak, Navin 2013, India Business Opportunities. Web.
The Economist 2013, India. Web.
YCharts 2013, US Dollar to Indian Rupee Exchange Rate. Web.