Mia Indian Competitve Envt (1)

8/2/2019 Mia Indian Competitve Envt (1)

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An analysis of the Indian government's economic policies endeavouring to make India aCompetitive in Global business.

1.Internal control systems

In India you can be registered as a Limited Liability Partnership with the entire paperworktaking about 100 days. It could take anywhere from a week to six months depending on whatyou are registering.

India rank in business competitive environment 32 among 59 nations, according to theWorld Competitiveness Rankings. Towards improving its global competitiveness, Indiashould first set its internal markets for enterprise, resourcefulness and rewards free. It shouldunshackle the markets for capital and credit, information and business intelligence, and rawmaterials, intermediates and finished goods. Plans and policies aimed at reinforcing India'sglobal strengths should be predicated on unleashing India's internal strengths. The unleashing

of its internal strengths will result from unshackling the internal markets.

The Internal control system is best regarded as the whole system of controls financial andotherwise.

The Internal Control Guidelines (ICG) initially framed in 1981 were revised in December,1996 consequent to rapid pace of liberalization, structural changes in foreign exchangemarket and developments in the area of currency derivatives.

Due to the accelerated pace of structural changes in the global and domestic forex markets,developments in the field of Information Technology and further developments in forexderivatives and the challenges in the management of foreign exchange market, a furtherrevision of the guidelines for 'Internal Control Over Foreign Exchange Business' was feltnecessary.

Accordingly, a Group was formed to look into updation of the Internal Control Guidelines tomake it a contemporary and benchmark document. The members for the Group were drawnfrom the Reserve Bank ofIndia, Foreign Exchange Dealers Association of India, FixedIncome Money Market and Derivatives Association of India, State Bank of India, ICICI Bankand Standard Chartered Bank. Feedbacks were also received from market relatedDepartments of the Reserve Bank.

This revised edition of the ICG also takes into account the recent developments likeintroduction of exchange traded currency derivative contracts. In India ERP (Enterpriseresource planning)market should grow at a rate somewhere near the industrial growth rate.

New way adopted by Indian companies is The results indicate that Indian companies aremoving forward with ERP implementation primarily in response to thrusts from parentcollaborators, to revamp in order to meet increased load, or to reduce lead times andinventory levels, and improve customer satisfaction.


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2. Freedom of Speech:

Freedom of Speech means the right to express one's own convictions and opinions freely bywords of mouth, writing, printing, pictures or any other mode. It is regarded as the firstcondition of liberty. It enjoys special position as far India is concerned. The constitutionalsignificance of the freedom of speech consists in the Preamble of Constitution and istransformed as fundamental and human right in Article 19(1) (a) as freedom of speech andexpression. Explaining the scope of freedom of speech and expression Supreme Court hassaid that the words "freedom of speech and expression" must be broadly constructed toinclude the freedom to circulate one's views by words of mouth or in writing or throughaudiovisual instrumentalities.

We can see the guarantee of freedom of speech under following heads.

Freedom of press

Although Article 19 does not express provision for freedom of press but the fundamentalright of the freedom of press implicit in the right the freedom of speech and expression. In thefamous case Express Newspapers (Bombay) (P) Ltd. v. Union of India court observed theimportance of press very aptly. Court held in this case that In todays free world freedom ofpress is the heart of social and political intercourse.

Obscenity

The freedom of speech guarantee under Article 19(1) (a) can be subject to reasonable staterestriction in the interest of decency or morality. Obscenity in India is defined as "offensiveto modesty or decency; lewd, filthy and repulsive." With respect to art and obscenity, theCourt held that "the art must be so preponderating as to throw obscenity into a shadow or theobscenity so trivial and insignificant that it can have no effect and may be overlooked ."

Right to Information:

Note:- The right to know has, however, not yet extended to the extent of invalidating Section

5 of the Official Secrets Act, 1923 which prohibits disclosure of certain official documents.Even, Right to Information Act-2005, which specially talks about peoples right to askinformation from Government official, prohibits discloser of certain documents under u/s 8 ofthe Act. These exceptions are generally the grounds of reasonable restrictions over freedomof speech and expression under Article 19(1) of Constitution of India. One can conclude that'right to information is nothing but one small limb of right of speech and expression.

Here are few Restrictions on freedom of Speech

Accordingly, under Article 19(2) of the Constitution of India, the State may make a lawimposing reasonable restrictions on the exercise of the right to freedom of speech and

expression in the interest of the public on the following grounds: Clause (2) of Article 19 of


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Indian constitution contains the grounds on which restrictions on the freedom of speech andexpression can be imposed:-

A. Security of State:-

Security of state is of vital importance and a government must have power to imposerestriction on the activity affecting it. Under Article 19(2) reasonable restrictions can beimposed on freedom of speech and expression in the interest of security of State. Howeverthe term security is very crucial one. The term "security of state" refers only to serious andaggravated forms of public order e.g. rebellion, waging war against the State.

B. Friendly relation with foreign state:-

this ground was added by the constitution (First Amendment) Act, 1951. The object behindthe provision is to prohibit unrestrained malicious propaganda against a foreign friendly state,which may jeopardize the maintenance of good relations between India, and that state.

Note- No similar provision is present in any other Constitution of the world. In India, theForeign Relations Act, (XII of 1932) provides punishment for libel by Indian citizens againstforeign dignitaries. Interest of friendly relations with foreign States, would not justify thesuppression of fair criticism of foreign policy of the Government.

Under the Official Secrets Act, the Government may restrict publication of sensitive storiesor suppress criticism of its policies. On January 10, the Government found that the 2002detention under the Act of Syed Iftikhar Gilani was unjustified and released him

In January, the Government passed a Freedom of Information law. This law allows citizens torequest and receive documents from the Government that are considered to be in the publicdomain.

3. Police Force:

Common people in India fear police, they regarded as partial, corrupt and ineffective. In mostof the cases police never registered the case before media involvement. You can count on thepolice only if you are rich enough to pay them.

Police justice means more abuse by the police too often, at the name of law in 1990 a 14 year

girl Ruchika Girhotra was molested by the inspector General of Police Shambhu PratapRathore. In India so many cases exist like Ruchika Girhotra.

Each state and union territory of India has its own separate police force. Article 246 of theConstitution of India (External website that opens in a new window) designates the police asa state subject, which means that the state governments frame the rules and regulations thatgovern each police force. These rules and regulations are contained in the police manuals ofeach state force.

Best police force in India-Tamil Nadu Police because they are very skilled in the latestweapons and tactics to solve a crime...Tamil Nadu is the only state with less terrorist

activities and it is the testimony to the power and talent of the Tamil Nadu Police.


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Punjab Police is the best equipped, Strongest, and the the most effective. They had to fightterrorism in Punjab and hence they got the best communication devices, AK 47s, and fastcars. They may not be very nice to general public, but they get the job done. Crime graph inIndia is on increase b ecause of ambiguous laws with otherwise,provided etc.and alsodifferent scale of penalties for first offence,minors,mentally unsound, under influence of

drinking etc.

4. Private Property:

The right to property was a fundamental right till 1978 when it was repealed through theConstitution Amendment Act. Thereafter, the acquisition of private property by thegovernment could not be challenged in the courts on the basis of constitutional law. ore. Thegovernment is already facing a number of PILs on land acquisition, including one on the SEZpolicy.In this case, Sanjiv Agarwal, founder of a Kolkata-based NGO, has stated in hispetition that the downgrading of the right to property has granted the government the licenceto abuse its power of eminent domain by taking over private property for purported public

use.

In 2004 Kaushik Das: The right to property pointed out. It is high time the government makesright to property again a fundamental right. The people of less-developed countries seem tobe poorer than they actually are because their wealth is often not formally recognised.TakeIndia, for example. The Indian Constitution does not recognise property right as afundamental right. India score poor on property right as government sometimes uses it powerand take control over private property for purported public use.

Sources:- http://www.ccsindia.org/ccsindia/policy/rule/articles/kdas_right_to_property.pdf

http://indialawyers.wordpress.com/2009/03/09/of-property-rights-and-wrongs/

5. Commercial Banks:

Without a sound and effective banking system an economy cannot have a healthy econony.For the past three decades Indias banking system has several outstanding achievements to itscredit. The most striking is its extensive reach. It is no longer confined to only metropolitansor cosmopolitans in India. In fact, Indian banking system has reached even to the remotecorners of the country. This is one of the main reasons of Indias growth process.

The governments regular policy for Indian bank since 1969 has paid rich dividends with thenationalization of 14 major private banks of India.

Major fuctions performed by banks in India includes their help to make deposits and paysinterest to saver over it, and also lends money out to others.The oldest bank in existence inIndia is the State Bank of India, a government-owned bank that traces its origins back to June1806 and that is the largest commercial bank in the country. Central banking is theresponsibility of the Reserve Bank of India, which in 1935 formally took over theseresponsibilities from the then Imperial Bank of India, relegating it to commercial bankingfunctions. After India's independence in 1947, the Reserve Bank was nationalized and givenbroader powers. In 1969 the government nationalized the 14 largest commercial banks; the

government nationalized the six next largest in 1980.


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6. Communication Systems:

The Indian telecommunication industry is the world's fastest growing industry, with 811.59million mobile phone subscribers as of March 2011. It is also the second largesttelecommunication network in the world in terms of number of wireless connections after

China.

India boasts of an excellent transportation and communication system that makes access tothis country easy and convenient. People from all parts of the world find it convenient to visitIndia because of the great transportation and communication system. In recent deregulationand liberalization of telecommunications laws and policies have prompted rapid growth; localand long distance service provided throughout all regions of the country, with servicesprimarily concentrated in the urban areas; steady improvement is taking place with the recentadmission of private and private-public investors, but combined fixed and mobile telephonedensity remains low at about 30 for each 100 persons nationwide and much lower for personsin rural areas; rapid growth in cellular service with modest declines in fixed lines.

India and Satellite Communication Systems-India first experimented with geosynchronoustelecommunications relays in 1981 and now has three active spacecraft in GEO. Moreover,the launch of INSAT 2A in July, 1992, marked the debut of India's first domestically builtoperational GEO space-craft. In a departure from most nations, India's GEO platformscombine a communications mission with that of Earth observation.India has registered animpressive growth in the telecom sector. Over the years the country has developed a vasttelecom network comprising over 25000 telephone exchanges and 21.5 million workingconnections. There is a large network of optical fibre cables, digital microwave and satellitecommunication systems. A very strong industrial base has been built in the telecom sectorwith a large number of national and multinational telecom companies.

7. Transportation:

Major improvements in the sector are required to support the country's continued economicgrowth and to reduce poverty.

Transport in the Republic of India is an important part of the nation's economy. Since theeconomic liberalisation of the 1990s, development of infrastructure within the country hasprogressed at a rapid pace, and today there is a wide variety of modes of transport by land,water and air.

However, the relatively low GDP of India has meant that access to these modes of transporthas not been uniform.Despite ongoing improvements in the sector, several aspects of thetransport sector are still riddled with problems due to outdated infrastructure, lack ofinvestment, corruption and a burgeoning population. The demand for transport infrastructureand services has been rising by around 10% a year with the current infrastructure beingunable to meet these growing demands. According to recent estimates by Goldman Sachs,India will need to spend US$1.7 Trillion on infrastructure projects over the next decade toboost economic growth of which US$500 Billion is budgeted to be spent during the EleventhFive-Year Plan.


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Indias roads are congested and of poor quality, Rural areas have poor access, The railwaysare facing severe capacity constraints, Urban centres are severely congested, Ports arecongested and inefficient.

India is not a country most foreigners can drive in. The traffic can be chaotic and daunting,

with herds of cattle often bringing all movement to a halt. The choice of driver and vehicle isof utmost importance to ensure the success of a tour.

Looking overall condition of transportion and infrastructure of roads, India stand poor in thissection.

8. Education:

In India, education in India is provided by the public sector as well as the private sector, withcontrol and funding coming from three levels: federal, state, and local. Child education iscompulsory. India has made progress in terms of increasing primary education attendance

rate and expanding literacy to approximately two thirds of the population. India's improvededucation system is often cited as one of the main contributors to the economic rise of India.

However, India continues to face stern challenges. Despite growing investment in education,25% of its population is still illiterate. It is still far behind developing countries such as Chinaor Thailand. Most children never attend secondary schools. An optimistic estimate is thatonly one in five job-seekers in India has ever had any sort of vocational training.

Social Mobility:

A paper, "Why is Mobility in India so Low? Social Insurance, Inequality, and Growth." byKaivan Munshi, Mark Rosenzweig in 2005 shows despite increased growth rates and risinginequality in recent years, is due to the existence of caste networks that provide mutualinsurance to their members. In India, people from same caste support each other it is difficultto get mix-up at new place dominated by a particular caste, during the war all Indians getunite though but in normal times the story is bit different, taking these factor into accountIndia score poor in this section.

Social mobility is the movement of the members of a particular society in terms of theirsocial status, usually defined in terms of occupation and income (vertical mobility), or fromone social group to another, not necessarily with concomitant change in social position

(horizontal mobility).Western ideologists and Western-influenced Indian intellectuals haveseized upon caste divisions, untouchability, religious obscurantism, and practices of dowryand sati as distinctive evidence of India's perennial backwardness. For many Ideologists,these social ills have literally come to define India - and have become almost the exclusivefocus of their writings on India. They were right in the past but todays modern time, this isnot helpful.During the colonial period, it served the interests of the British (and theirEuropean cohorts) to exaggerate the democratic character of their own societies whilediminishing any socially redeeming features of society in India (and other colonized nations).Social divisions and inequities were a convenient tool in the arsenal of the colonizers. On theone hand, tremendous tactical gains could be achieved by playing off one community againstthe other. On the other hand, there were also enormous psychological benefits in creating the

impression that India was a land rife with uniquely abhorrent social practices that only anenlightened foreigner could attempt to reform. India's social ills were discussed with a


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contemptuous cynicism and often with a willful intent to instill a sense of deep shame andinferiority.

Sources:- http://india_resource.tripod.com/social.htm

10. Freedom from Outside Control:

Indian Citizens are free from control arrest while they are inside India from forces of othercountries.

The Fundamental Rights in India enshrined in the Part III of the Constitution of Indiaguarantee civil liberties such that all Indians can lead their lives in peace and harmony ascitizens of India.The Fundamental Rights are defined as basic human freedoms which everyIndian citizen has the right to enjoy for a proper and harmonious development of personality.These rights universally apply to all citizens, irrespective of race, place of birth, religion,caste, creed, color or sex. They are enforceable by the courts, subject to certain restrictions.

The Rights have their origins in many sources, including England's Bill of Rights, the UnitedStates Bill of Rights and France's Declaration of the Rights of Man.

Fundamental Rights are very important for the people. These have to be, however, used in theinterest of the unity and security of the state as well as without in any way against publicorder, public health and morality. The existence of conflicts over caste, the presence of anti-national and anti-social elements, the activities of the terrorists, and the continued need forsafeguarding the security, unity and integrity of the nation, all justify the existence of somelimitations on fundamental rights.

11. Protection of domestic enterprises:

Countries which create the most jobs, growth and wealth protect their domestic companiesfrom foreign competition with tariffs, quotas and other restrictions, while taking care to enjoythe gains from trade wherever possible any countries those have strong potentila togrowth.The more effective countries create an industrial policy - that is, they identify theindustries they want to grow inside their country and then encourage those industries - andthen use trade policy to support it. India has been subject to protectionism from long.

In 2009, The European Union (EU) raised a sharp concern over what it called risingprotectionism in India, at the World Trade Organization (WTO).

India reported a trade deficit equivalent to 5608 Millions USD in March of 2011.

Their was also a report of current account deficit equivalent to 9.7 Billion USD in the fourthquarter of 2010. India is leading exporter of gems and jewelry, textiles, engineering goods,chemicals, leather manufactures and services. India is poor in oil resources and is currentlyheavily dependent on coal and foreign oil imports for its energy needs. Other importedproducts are: machinery, gems, fertilizers and chemicals. Main trading partners are EuropeanUnion, The United States, China and UA.

12. Foreign Currency Transactions:


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In India, most of the transactions takes place in rupee foreigners need to purchase rupee forday to day transactions however their exist many banks and private agents in the countrycurrency conversion is not a problem.

Foreign exchange transactions in India have become more liberalized with the Foreign

Exchange Management Act, 1999 (FEMA) which came into operation as of 1st June 2000.Foreign exchange dealers in India today have been given powers of making all types ofremittances in foreign exchange subject to present rules.

The previous requirements of seeking Reserve Bank of India permission has been eliminatedfor most transactions.

13. Border Control:

The term Line of Control (LOC) refers to the military control line between the Indian- andPakistani-controlled parts of the former princely state of Jammu and Kashmira line which,to this day, does not constitute a legally recognized international boundary but is the de factoborder. Originally known as the "Cease-fire Line", it was redesignated as the "Line ofControl" following the Simla Agreement, which was signed on 3 July 1972.

Another cease-fire line, one that separates the Indian-controlled state of Jammu and Kashmirfrom the Chinese-controlled area known as Aksai Chin, lies further to the east and is knownas the Line of Actual Control (LAC).

It was posted in 2 june,2011 CNN-IBN "The Army has confirmed that at least 700 terroristsare waiting to infiltrate into Kashmir and there have been some incidents of firing at the Lineof Control (LoC) to facilitate their crossing.

"The terrorist camps are very much existing in Pakistan. We are fully aware of severalhundreds of terrorists who are waiting to be infiltration to India and we presume they havethe Pakistan backing," said Chief of the Western Command of Indian Army, LieutenantGeneral SR Ghosh.

Just a few days back Jammu and Kashmir Chief Minister Omar Abdullah and the Army wereat loggerheads over infiltration by terrorists from Pakistan into the state."

14. Currency:

The Indian rupees (Devanagari: ?????) (sign: ; code: INR) is the official currency of theRepublic of India. The issuance of the currency is controlled by the Reserve Bank of India.

The modern rupee is subdivided into 100 paise (singular paisa). Bank notes are available innominal values of 1, 2, 5, 10, 20, 50, 100, 500 and 1000 rupees. Coins of the rupee havenominal values of 1, 2, 5, 10, 20, 25 and 50 paise as well as 1, 2, 5 and 10 rupees. However,with effect from 30 June 2011, 50 paise will be the minimum coin accepted in the markets asall denominations below it will cease to be legal currency.


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The Indian rupee symbol is derived from the Devanagari consonant "?" (Ra) with an addedhorizontal bar. It is also derived from the English consonant "R" without the vertical line,with added two horizontal bars, (similar in comparison with Yen and Euro symbols).Thegovernment organised an Indian Rupee Symbol Design competition, but RTI Activistsexposed Indian Rupee Symbol Scam.

Almost every country in the world face the problem of counterfeit currency notes, but inIndia the problem is acute as the country is hit hard by this evil practice. Fake notes in Indiain denominations of Rs.100, 500 and 1000 are being flooded into the system. The Reservebank of India estimates that there is at least Rs.2 trillion fake rupee notes in circulationthroughout India. It is suspected that almost all of these notes originate from the securitypresses located elsewhere.

15. Cultural, Language Homogeneity: 4.0

India's languages, religions, dance, music, architecture, food and customs differ from place to

place within the country, but nevertheless possess a commonality. The culture of India is anamalgamation of these diverse sub-cultures spread all over the Indian subcontinent andtraditions that are several millennia old.

Regarded by some historians as the "oldest living civilization of Earth", the Indian traditiondates back to 8000 BC and has a continuous recorded history since the time of the Vedas forover 5,500 years.Several elements of India's diverse culturesuch as Indian religions, yogaand Indian cuisinehave had a profound impact across the world.

With the increasing trend of globalization, the impact of globalization has lead to a fastchanging environment the boundaries for business is diminishing day by day so is themovement of people between different countries and cultures. The requirements ofmultinational organizations like expansion plans in international market has continuinglyincreased the need to understand the cultural dimensions of different countries to achieve

better results. Therefore the companies are required to understand a national cultures impacton areas like communication in multicultural teams in different countries which has a highdegree of effect on team performance.

So our research question revolves around this topic as How does culture influencecommunication in multi cultural teams. This thesis makes an attempt to investigate theinfluence of national cultures on communication in project teams in China and India by

focusing on construction industry based on a number of factors including Hofstedes (1980)cultural dimensional framework. The researchers intend to explore the cultural factors havingmajor impact on communication in multicultural project teams of both countries. Throughoutour research and study, useful lessons on national cultures impact on communication can bedrawn for multicultural project team in China and India. It can provide a better insight for theproject teams to have concern for and understand why people from different countries andcultures react or respond to various situations in a different manner, giving high emphasis tocommunication process.

16. Political Effectiveness: 3.0

In recent years, successive Indian Governments have sought to improve the performance ofthese programmes by decentralizing their administration, vesting village governments with


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greater responsibility for their monitoring and oversight. An academic literature hypothesizesthat socioeconomic divisions within villages and the weak political strength of the poorreduces the effectiveness of decentralized programmes since, under these conditions, elitesare able to 'capture' funds intended for the poor. This paper argues that the effect ofadministrative decentralization of poverty programmes and local public goods on the

magnitude of benefits to the poor depends not just on their political strength but also on theincentives the non-poor have to improve the welfare of the poor. The design of policy paysinsufficient attention to such incentive issues. Empirical analysis provides support for thisbelief. The regression analysis of the paper reveals that welfare receipts affect the laborsupply decisions of the poor and that the implementation of welfare programmes undercontrol of village governments takes these effects into account.

Policy effectiveness can be brought in by setting-up of an Independent Evaluation Office toundertake impartial and objective assessments of the various public programmes and improvethe effectiveness of the public interventions. This years budget speech mentions, It hasbeen decided that it would be an independent entity under a Governing board chaired by the

Deputy Chairman, Planning Commission. The IEO would evaluate the impact of flagshipprogrammes and place the findings in the public domain. It would be funded by the PlanningCommission.

17. Institutional Stability:

The recent financial crisis has sparked off an interesting debate in which India has been citedas a remarkable success. India emerged largely unscathed. RBIchided for its conservatismand cautionhas reasons to be self-confident. Therefore, the move to change Indiasregulatory structure calls for a close examination.

Policy reform is invariably contextual; as is the announcement by the government of Indiaduring this years 2010 Budget, about setting up the Financial Stability and DevelopmentCouncil (FSDC).To date, 26 banks have failed in the US, exposing the poor regulation andsupervision of the banking system. In the UK, a giant such as Northern Rock tanked,revealing the glaring absence of information flows between the central bank and the financialsupervision agency.

Dr. Y.V. Reddy, Governor, Reserve Bank of India, while releasing of the India DevelopmentReport 2008 on January 3, 2008, stated that there is no visible immediate threat to financialstability in India, at this juncture. However there is need for continued but heightened

vigilance.He reiterated the continued commitment of the Reserve Bank to lay stress onmacro-economic stability in a way that it enhances the prospects, not merely for acceleratedgrowth but for a genuinely more inclusive growth.ccording to Dr Reddy a major area ofvulnerability for India is the high consolidated public-debt to GDP ratio of over seventypercent and persisting, though moderating, consolidated fiscal deficit.

According to the India Development Report 2008 The improvement in macroeconomicstability could be due to macroeconomic policies. While the prospects of achieving highgrowth are good, the prospect of maintaining macroeconomic stability must be rated low. TheIndian economy is likely to be susceptible to periodic shocks originating from the globaleconomy such as those related to global financial crises and volatility in crude oil prices.

18. Honest Government:


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New Delhi, Aug 15 : Prime Minister Manmohan Singh Wednesday urged Indians to makefull use of the Right to Information (RTI) Act to ensure that the government "functionsproperty and honestly".

Speaking at the Red Fort on the 60th anniversary of India's independence, the prime minister

said the act was enacted to make the government, at all levels, "more accountable and moretransparent, and to fight the cancer of corruption. "I want every citizen to make full use ofthis act to ensure that government functions properly and honestly."

However, The Satyagraha of Baba Ramdev has been cracked down. He has been detained bythe authorities in the midnight of 4th June, 2011. Lot of attrocities have been comitted by thepolice and authorities on the people (Men, Women, Youth and Children). The wholeSatyagraha was a peaceful protest by the people of India in large numbers and not adhered toany kind of violence. The Satyagraha undertaken by Baba Ramdev was in the interest of thewhole nation. Most part of India does not believe it as a democratic decision of government.

Bad management can be corrected easily but the attitudinal mindset of those who do notbelieve in respecting pluralism, the only real strength of India, particularly in this newcentury, can be dangerous and frighteningly divisive. European countries have been throughdestructive contortions in the not so distant past. The Middle East is in inhuman turmoil. Wein India have been saved each time as we hurtled towards the precipice of disaster.

19. Common Laws:

In India, poor people do not have the same effective justice as rich people.

Law of India is largely based on English common law because of the long period of Britishcolonial influence during the British Raj period. Much of contemporary Indian law showssubstantial European and American influence. Various acts and ordinances first introduced bythe British are still in effect in their modified forms today. During the drafting of the IndianConstitution, laws from Ireland, the United States, Britain, and France were all synthesized toget a refined set of Indian laws, as it currently stands. Indian laws also adhere to the UnitedNations guidelines on human rights law and the environmental law. Certain internationaltrade laws, such as those on intellectual property, are also enforced in India.

Indian civil law is complex, with each religion having its own specific laws which theyadhere to. In most states, registering of marriages and divorces is not compulsory. There are

separate laws governing Hindus, Muslims, Christians, Sikhs and followers of other religions.The exception to this rule is in the state of Goa, where a Portuguese uniform civil code is inplace, in which all religions have a common law regarding marriages, divorces and adoption.

20. Central Bank:

The Reserve Bank of India (RBI) is the central bank of India, and was established on April 1,1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The CentralOffice of the Reserve Bank was initially established in Kolkata but was permanently movedto Mumbai in 1937. Though originally privately owned, the RBI has been fully owned by theGovernment of India since nationalization in 1949. the basic functions of the Reserve Bank-


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"...to regulate the issue of Bank Notes and keeping of reserves with a view to securingmonetary stability in India and generally to operate the currency and credit system of thecountry to its advantage."

Reserve bank performs financial supervision, under the guidance of the Board for Financial

Supervision (BFS). The Board was constituted in November 1994 as a committee of theCentral Board of Directors of the Reserve Bank of India.

The Reserve Bank of India was set up on the recommendations of the Hilton YoungCommission. The commission submitted its report in the year 1926, though the bank was notset up for nine years. Duvvuri Subbarao succeeded Yaga Venugopal Reddy on September 2,2008.

It has 22 regional offices, most of them in state capitals and has six training establishments.Subsidaries of Central Bank- Fully owned: National Housing Bank(NHB), Deposit Insuranceand Credit Guarantee Corporation of India(DICGC), Bharatiya Reserve Bank Note Mudran

Private Limited(BRBNMPL) Majority stake: National Bank for Agriculture and RuralDevelopment (NABARD)

21. Domestic Budget Management:

Concerned over the worsening of fiscal situation, in 2000, the Government of India had setup a committee to recommend draft legislation for fiscal responsibility. Based on therecommendations of the Committee, Government of India introduced the FiscalResponsibility and Budget Management (FRBM) Bill in December 2000. In this Billnumerical targets for various fiscal indicators were specified. The Bill was referred to theParliamentary Standing Committee on Finance. The Standing Committee recommended thatthe numerical targets proposed in the Bill should be incorporated in the rules to be framedunder the Act. Taking into account the recommendations of the Standing Committee, arevised Bill was introduced in April 2003. The Bill was passed in Lok Sabha in May 2003and in Rajya Sabha in August 2003. After receiving the assent of the President, it became anAct in August 2003. The FRBM Act 2003 was further amended.

The main objectives of FRBM Bill / Act are: To reduce fiscal deficit; To adopt prudent debtmanagement;, and To generate revenue surplus.

There is a consensus among observers that it is a watered-down version of the original

intentions. Explicit targets for the reduction of the fiscal and revenue deficits as well as theceiling on government borrowing have been removed from the draft. It was originallyenvisaged that there should be a cap on public debt at 50 per cent of Gross Domestic Product.Instead of mandating a half per cent cut in deficits annually, the revised version says that thegovernment should undertake appropriate measures to eliminate revenue deficit by March 31,2008 and let the targets to be set for annual reduction in fiscal and revenue deficits remain tillthen.

As could be expected, there is an enabling clause to escape from the rigours of the disciplineon grounds of national calamity, security or other exceptional circumstances. However, thereis an important provision, which has been retained from the original. The Bill seeks to bar the

Reserve Bank of India from operating in the primary market for government securities fromApril 1, 2006.


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22. Government Debt:

In India in recent years the primary deficits have been above 1.5 percent of GDP and theimplicit rate of interest on the national debt has exceeded the nominal growth rate of GDP bymore than three percentage points. The ratio of the central government debt to GDP was

about 60 percent on average over these years. Combining these figures in the way implied bythe basic equation implies that the ratio of debt to GDP will rise at about three percent peryear. That is what was happening until recently. The debt to GDP ratio rose from 54 percentin 2000-01 to 65 percent in 2003-04. Thats the bad news.

It was mention by Sriram Vadlamani in his article of June 2009 on Debt by country map andIndias national debt that Indias GDP stands at $2.55 trillion and its national debt is 78% ofits GDP. The ratio of total debt service payments to current receipts worked out to 4.9 percent during April-September 2009 as against 3.7 per cent for April-September 2008. Theratio of short-term external debt to foreign exchange reserves, which was 17.2 per cent atend-March 2009, came down 15.1 per cent at end-September 2009. The ratio of Government

external debt to GDP has remained around 5.0 per cent in the last three years.

The economy of India is the twelfth largest in the world by market exchange rates and thefourth largest in the world by GDP measured on a purchasing power parity (PPP) basis. Thecountry was under socialist-based policies for an entire generation from the 1950s until the1980s.

The economy was characterized by extensive regulation, protectionism, and publicownership, leading to pervasive corruption and slow growth. Since 1991, continuingeconomic liberalization has moved the economy towards a market-based system. By 2009,India had prominently established itself as the world's second-fastest growing majoreconomy. Indias Economy has grown by more than 9% for three years running, and has seena decade of 7% growth. This has reduced poverty by 10%, but with 60% of Indias 1.1 billionpopulation living off agriculture and with droughts and floods increasing, poverty alleviationis still a major challenge. The structural transformation that has been adopted by the nationalgovernment in recent times has reduced growth constraints and contributed greatly to theoverall growth and prosperity of the country.

However, remember from the 1950s until the 1980s the country was under socialist-basedpolicies for an entire generation. The economy was differenciate by extensive regulation,protectionism, and public ownership, leading to pervasive corruption and slow

growth.Economic growth is constrained by inadequate infrastructure, a cumbersomebureaucracy, corruption, labor market rigidities, regulatory and foreign investment controls,the "reservation" of key products for small-scale industries, and high fiscal deficits.

23. Economic Statistics:

For the most part, statistics released by the Indian government are precise and accurate. Therehas not been any large scale manipulation of economic statistics by the Indian governmentuncovered as of yet, and there have not been many instances of statistics corruption bygovernment agencies. The economy of India is the twelfth largest in the world by marketexchange rates and is the tenth largest in the world by nominal GDP and the fourth largest by

purchasing power parity (PPP). The country's per capita GDP (PPP) is $3,339 (IMF, 129th)in 2010.Following strong economic reforms from the post-independence socialist economy,


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the country's economic growth progressed at a rapid pace, as free market principles wereinitiated in 1991 for international competition and foreign investment. Despite fast economicgrowth India continues face massive income equalities, high unemployment and malnutrition.

24. Protection of Public Health and Safety:

Public health is concerned with the health of the community as a whole. Its key goal is toreduce a populations exposure to disease. It has been said that: Health care is vital to all ofus some of the time, but public health is vital to all of us all of the time. The public healthsystem in India faces multiple challenges. In 2005, the average life expectancy was 62 yearsfor males and 64 years for femalesone of the lowest in the South Asian region. In the sameyear, only 44 per cent of children aged 12 to 23 months were fully immunized. Infantmortality rate, generally considered as the gold standard in judging the public health systemof a country remains at an unacceptable 55 deaths per 1000 live births. If one looks atinfectious diseases, the picture is not much better.

For the past three years, the HIV/AIDS Task Force of the Center for Strategic andInternational Studies has been examining the HIV/AIDS epidemic in India, and particularly,U.S. policy dealing with that epidemic. A high-level delegation visited India in January 2004.Since then, a few elements of broad consensus on HIV/AIDS policy have emerged: thatHIV/AIDS is one of the major question marks hanging over India's promising future; thatchanging the trajectory of the epidemic will require substantially more resources than arecurrently available; that, as in other countries, the response to HIV/AIDS cannot rely only onmedical means and instruments but must include the social dimension as well; that India'ssize calls for a strategic approach from its central government and for a more widespreadsurveillance effort; and that India's decision to decentralize its HIV/AIDS program was awise move and perhaps the only way to make room for tailor-made approaches that suitIndia's extraordinary diversity.

On the other hand, many economists have argued that the public health system has become aself-serving bureaucratic behemoth designed to serve its own interests rather than advancepublic health. They advocate a greater private sector role in health care and a gradual retreatof the state as had happened in other sectors post-globalization.

In conclusion, public health system in India needs urgent attention. It has hitherto beenconstrained by ideological straitjackets. A public-private partnership where state restrict itselfto a) provision of basic health services in under-served areas b) as a payer for the indigent c)

funding fundamental research leaving health care delivery to the private sector is the need ofthe hour.

25. High Wage Policy:

With one of the fastest growing economies in the world, clocked at a growth rate of 8.3% in2010, India is fast on its way to becoming a large and globally important consumer economy.But in Indian Democracy, there is not equality among the employees of State Governmentand Central Government.

The Indian middle class, estimated to be 50 million people, by McKinsey is fast becoming

used to Western culture. If current trends continue, Indian per capita purchasing power parity


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will significantly increase from 4.7 to 6.1 percent of the world share by 2015. In 2006, 22percent of Indians lived under the poverty line. India aims to eradicate poverty by 2020.

The standard of living in India shows large disparity. For example, rural areas of India existwith very basic (or even non-existent) medical facilities, while cities boast of world class

medical establishments. Similarly, the very latest machinery may be used in someconstruction projects, but many construction workers work without mechanisation in mostprojects.[5]

March 26, 2011: Philips Unveils India Health And Wellbeing Index Report 2011Implemented in over 23 countries, first ever Rural Health & Wellbeing Index in India

83% of urban Indians do not consider themselves overweight

38% urban Indians believe technology has made life more stressful

87% rural Indians put access to clean water as their biggest conc

ern Bangalore is the no.1 city in India when it comes to experimenting with new remedies

When it comes to the physical wellbeing of people residing in rural India, the most importantaspects include access to clean water, toilet facilities and maintaining good personal hygiene.87% of rural Indians put access to clean water as their biggest concern. 12% of therespondents in rural India are worried about asthma while only 2% of urban India, wherepollution level are higher, feels it is of concern. Indians living in rural areas are generallysatisfied with access to local schools. However, across the board, Indians living in rural areasare dissatisfied with the availability of jobs and healthcare facilities in their area.

Women are more likely to resort to traditional and spiritual methods such as prayer andfasting to improve their sense of health and wellbeing, compared to men. Whereas both menand women consider spending time with friends and family, practicing good hygiene, andrelaxing at home to be valuable ways of improving physical, emotional, and mental health.

26. Environmental Protection: 2.0

Through the years, the ministry has passed innumerable laws to help them in their task ofenvironmental protection. Sadly, all the regulations and acts have not done enough to protect

the environment. The greed of many in the governing bodies has led to misuse of the lawsand ruthless exploitation of the land, leading to ecological destruction and social injustices.Most leaders of industry, too, have been lacking in a social conscience. They have exploitedthe countrys resources and polluted our earth, water and air. The opening up of our economyand globalization have put a greater pressure on our resources, further vitiating countryfragile eco-system.

Present Euphoria for rapid economic development has created enormous pressure on India'snatural resources. Forests are subjected to rapid degradation due to growing demand forforest-based inputs for industrial use. Rivers are becoming dumping grounds for industrialwastes, often with toxic materials. Construction of large dams is displacing millions of people

from their age-old roots. The development projects are carried out for the prosperity of the


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poor and the marginalized; but the latter never get benefited by this.Their notion ofdevelopment is different. They share a unique harmonious relationship with nature.

27. Strong Army:

With an estimated total troops of 4,514,300 personnel, India maintains the second-largeststanding army in the world, next only to China. Pakistans manpower of 1,449,000 personnel,although smaller in numbers, is proportionally higher than India in terms of their populationratios. Pakistans ground forces are equipped with American or Chinese weapons like FIM 92Stinger SAMs, BGM-71 TOW anti-tank missiles, T-82 tanks and other equipments. Indianground forces are equipped with mostly home-made and Soviet technologies like IR guided9K35 Strela-10 SAMs, 3rd Gen IR guided Nag anti-tank missiles, UAVs and a largeinventory of tanks and support vehicles. In terms of both numbers and equipments, Indianmilitary dominates the Pakistani ground forces

The Indian Army [IA, Devanagari: Bharatiya Thalasena] is the land based branch and the

largest component of the Indian Armed Forces. With about 1,100,000 soldiers in activeservice and about 960,000 reserve troops, the Indian Army is the world's second largeststanding volunteer army. Its primary mission is to ensure the national security and defence ofthe Republic of India from external aggression and threats, and maintaining peace andsecurity within its borders. It also conducts humanitarian rescue operations during naturalcalamities and other disturbances. The President of India serves as the Commander-in-Chiefof the Army. The Chief of Army Staff (COAS), a General, is a four star commander andcommands the Army. There is never more than one serving general at any given time in theArmy. Two officers have been conferred the rank of Field Marshal, a 5-star rank and theofficer serves as the ceremonial chief.

The Indian Army came into being when India gained independence in 1947, and inheritedmost of the infrastructure of the British Indian Army that were located in post-partition India.It is a voluntary service and although a provision for military conscription exists in the Indianconstitution, it has never been imposed. Since independence, the Army has been involved infour wars with neighboring Pakistan and one with the People's Republic of China. Othermajor operations undertaken by the Army include Operation Vijay, Operation Meghdoot andOperation Cactus. Apart from conflicts, the Army has also been an active participant inUnited Nations peacekeeping missions. The Indian Army is the worlds second largest armyin terms of military personnel, and the largest in terms of active manpower. The IndianArmed Forces are the overall unified military of the Republic of India encompassing the

Indian Army, the Indian Navy, the Indian Air Force and various other inter-serviceinstitutions.

28. Foreign Trade Impact: 4.0

September 27,2009 Daniel Workman in his article Richest Countries International TradeStatistics (Wealthiest Economies Rated by Global-Trade-to-GDP Ratio) puts India in the listof Richest Countries Least Dependent on Global Trade, results suggest . India's imports plusexports divided by GDP ratio us 40.6% ($481.9 billion divided by $1.19 trillion) which isquite closed to the standard result i.e. 33%

India, like other countries participating in globalization, has been exporting and importingproducts and services to and from other countries.


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It was until 1991 that India followed a socialist-democratic approach which kept ituncommitted to the foreign countries. The Swadeshi ideology enforced public ownershipsand an approach of India First. In other words, self-sufficiency was the motive advocated bythe governments that ruled the country till 1990s.

The Indias expedition towards economic liberalization began in 1991 and it opened the doorfor foreign trade and foreign investments. Within 10 years or so, India showed the potentialof being a contender as the worlds fastest growing economy. According to the data releasedfor the year 2006-2007, India's GDP grew at an impressive 9.2 per cent. The share ofdifferent sectors of the economy in India's GDP is as follows: Agriculture - 18.5 per cent,Industry - 26.4 per cent, and Services - 55.1 per cent. The fact that the service sector nowaccounts for more than half the GDP is a milestone in India's economic history and takes itcloser to the fundamentals of a developed economy. At the time of independence agricultureoccupied the major share of GDP while the contribution of services was relatively very less.One of the most important phenomena in post-war economic history has been the enormousexpansion of world trade. Indian trade grew poorly from 1950 to 1980 as compared with the

world. However, from 1980 onwards, Indian exports have been rising at one and a half timesthe pace of growth in world exports. In 1993, India ranked 33rd in top exporting countriesand 32nd in top importing countries. The country secured its position as the second fastestgrowing economy in 2008.

The Indian markets have started entertaining increased number of foreign consumers, alongwith the domestic consumers The entry of the foreigners into the Indian markets was initiallycriticized but the scene is not the same anymore. The Indian Foreign Trade Policy of 2009-2014 has added 26 new markets to its aim of achieving the export target of US$ 200 billionand export growth target of 15 percent for the first two years. Other aims of the policy are todouble Indias export of goods and services by 2014 and to double Indias share in globalmerchandise trade by 2020.

29. Management of Foreign Currency Budget:

Until the liberalisation of 1991, India was largely and intentionally isolated from the worldmarkets, to protect its fledging economy and to achieve selfreliance.

Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, whileforeign direct investment was restricted by upper-limit equity participation, restrictions ontechnology transfer, export obligations and government approvals; these approvals were

needed for nearly 60% of new FDI in the industrial sector. In 2006-07, major exportcommodities included engineering goods, petroleum products, chemicals andpharmaceuticals, gems and jewellery, textiles and garments, agricultural products, iron oreand other minerals. Major import commodities included crude oil and related products,machinery, electronic goods, gold and silver. Since then India's trade has grown fast.

According to World Trade Organization (WTO), India accounted for 1.2% of the global tradein 2006.Since liberalization, the value of India's international trade has become more broad-based and has risen to Rs. 63080109 crores in 200304 from Rs.1250 crores in 195051.India's major trading partners are China, the US, the UAE, the UK, Japan and the EU. Theexports during April 2007 were $12.31 billion up by 16% and import were $17.68 billion

with an increase of 18.06% over the previous year. India is a founding-member of GeneralAgreement on Tariffs and Trade (GATT) since 1947 and its successor, the WTO. While


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participating actively in its general council meetings.Cumulative Current Account Balance1980-2008 based on the IMF data since independence, India's balance of payments on itscurrent account has been negative. Since liberalisation in the 1990s (precipitated by a balanceof payment crisis), India's exports have been consistently rising, covering 80.3% of itsimports in 200203, up from 66.2% in 199091. India's growing oil import bill is seen as the

main driver behind the large current account deficit. In 2007-08, India imported 120.1 milliontonnes of crude oil, more than 3/4th of the domestic demand, at a cost of $61.72 billion.Although India is still a net importer, since 199697, its overall balance of payments (i.e.,including the capital account balance), has been positive, largely on account of increasedforeign direct investment and deposits from non-resident Indians; until this time, the overallbalance was only occasionally positive on account of external assistance and commercialborrowings. As a result, India's foreign currency reserves stood at $285 billion in 2008.

30. Layers of Collective Action:

States in India have their own elected governments, whereas Union Territories are governed

by an administrator appointed by the president. Each state also has a presidentially appointedgovernor who may assume certain broad powers when directed by the central government.The central government exerts greater control over the union territories than over the States,although some territories have gained more power to administer their own affairs. Local stategovernments in India have less autonomy compared to their counterparts in the United States,Africa and Australia. In India central and state government work together to sanction any bigprojects you need central's permission the regular works like administrative works are carriedby state. the school board president, water sewer district board etc in a town 100 miles awayfrom the capital elected by the state government, However in different states os India existcentral schools also which comes when the top Board of education makes the decisiondirectly after a series of interviews. In India, state government takes decision with centralgovernment assistance.

The Indian government structured is not fair. With federal and state governments, all withindividuals that are locally elected the private business owners are not elected by the people.People does not have the choice to elect their by their own.

The thought that: "The people of India alone can properly shape their own constitution anddetermine their relations to other countries of the world through a Constituent Assemblyelected on the basis of adult suffrage" by the Congress under British Government does notevolve out yet.

31. Pro-Business Climate: 4.5

India as a country is a land of opportunity, it provides friendly environment to businesspeople an average people think business owners are good people, they provide us range ofopportunities and add to genrenation of employment in the country.

India's languages, religions, dance, music, architecture, food and customs differ from place toplace within the country, but nevertheless possess a commonality. The culture of India is anamalgamation of these diverse sub-cultures spread all over the Indian subcontinent andtraditions that are several millennia old.


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Regarded by some historians as the "oldest living civilization of Earth", the Indian traditiondates back to 8000 BC[2] and has a continuous recorded history since the time of the Vedasfor over 5,500 years.

One of the fundamental components of Indian culture, vital for your business organisation to

succeed, is an understanding of the traditions and ways of communicating with others thatform the basis of Indias society.

CSM is an independent, non-profit organization promoting entrepreneurship for the triplebottom linepeople, planet and profit.Through offices in India and the UK, and aninternational network of partners and associates, CSM works to accelerate the transition tosustainable development and the realization of human rights and social justice. Founded in2000, by Indian social entrepreneur, Malini Mehra,CSM's primary constituencies aredomestic industry and stakeholders in developing countries, and Diaspora communities inindustrialized countries.

The Centre for Social Markets is in the business of transformation - social, economic,political and institutional - for the public interest. CSM's mission is to fundamentally changethe culture of markets and other social institutions to advance social justice, human rights andsustainable development.

CSM conducts research and education, promotes policy dialogue, builds coalitions andleadership platforms, and produces publications, web-based resources and broadcasts in threemajor programme areas:

1. Climate Changewith the objective of promoting a pro-active domestic response toclimate change in India and assertive leadership on the international stage.

2. India as a Global Playerwith the objective of ensuring that Indias rise as a world powercontributes to peace, sustainable development and human rights.

3. Corporate Responsibilitywith the objective of ensuring that business and enterprise,especially India Inc., are a force for good, and promote new business models that activelycontribute to sustainability and social welfare.

32. Government Enterprises:

The Indian economy is healthily private, with state-owned corporations accounting for lessthan a tenth of the output.

A government-owned corporation, state-owned company, state enterprise, publicly-ownedcorporation, government business enterprise, or parastatal is a legal entity created by agovernment to undertake commercial activities on behalf of an owner government. Theirlegal status varies from being a part of government into stock companies with a state as aregular stockholder. There is no standard definition of a government-owned corporation(GOC) or state-owned enterprise (SOE), although the two terms can be used interchangeably.The defining characteristics are that they have a distinct legal form and they are established tooperate in commercial affairs. While they may also have public policy objectives, GOCs

should be differentiated from other forms of government agencies or state entities established


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to pursue purely non-financial objectives that have no need or goal of satisfying theshareholders with return on their investment through price increase or dividends

The term Government Linked Company (GLC) is sometimes used to refer to corporateentities that may be private or public (listed on a stock exchange) where an existing

government owns a stake using a holding company. There are two main definitions of GLCsare dependent on the proportion of the corporate entity a government owns. One definitionpurports that a company is classified as a GLC if a government owns an effective controllinginterest (>50%), while the second definition suggests that any corporate entity that has agovernment as a shareholder is a GLC. So, Government has more enterprises than public.Government of India Enterprise provides comprehensive engineering, consultancy andproject management services in the transport infrastructure sector under single roof. Since itsinception in 1974, company has made steady progress and diversified into new areas ofbusiness such as, export/leasing, maintenance and rehabilitation of railway rolling stock,operation and maintenance of railway systems under concession agreements and BOT,BOOT and PPP projects. Presently, their exist 600 on-going projects in India besides over 30

projects overseas.

10.27.10, Raghav Bahl in his article,"Bet On India, Not China" points out In India, stockexchange was set up in 1875, the oldest in Asia--it is also perhaps the most digitized in theworld. About 40 per cent of the economy is exposed to global trade (exports and imports)--low enough to escape world crises, yet high enough to remain an open, competitive economy.The Indian rupee largely floats against world currencies.

33. International Security Agreements:

11/30/2010 Vidya Sharma in his article 'Australia needs India' points out in spite of theircommon security concerns in Asia-Pacific, the US and India are unlikely to sign a mutualdefense treaty. Nevertheless, this development is of utmost importance to Australia andJapan, the two most significant US allies in the region, India score poor in this section basedon her international mutual defense treaties.

Since September 2001, the Western public has found a renewed interest in South Asia. Onthe border between the Muslim and non-Muslim world, the region has seen its strategicimportance to the West heightened, while the fact that the two major competing regionalpowers, Pakistan and India, each possess nuclear weapons has raised new anxieties. Giventhe importance of South Asia to current global conflicts, A Military History of India and

South Asia provides a much-needed overview of the military history of the region since 1700,covering the areas that later evolved into the states of India, Pakistan, Sri Lanka, andBangladesh. In chapters devoid of academic jargon, the book provides lucid introductions tovarious topics, from the rise of the British East India Company, to the Indian Army in theFirst World War, to the current tensions between India and Pakistan in Kashmir. Withchapters written by established experts, the book makes important contributions to the studyof modern South Asian history, British Imperial history, and the history of war and society. Itwill appeal to students, scholars and laypersons alike with an interest in the social, politicaland military history of the region.

Chapters in the book document the rise of the British East India Company and the uprising of

1857-59, in which the largely Bengali army rose up against the British officer corps, and thesubsequent decision by the British Crown to take direct control of India and its army. Further


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chapters document the colonial Indian Army's role in British imperial wars in Afghanistanand in World Wars I and II. Half of the book explores the development of national armies forIndia, Pakistan, and, later, Bangladesh, giving accounts of the wars that have torn South Asiasince independence, including the Indo-Pakistani wars, the India-China War, and the SriLankan War, the continuing conflicts over Kashmir, and the proliferation of nuclear weapons.

On June 27/05 the United States and India signed a 10-year agreement paving the way forstepped up military ties, including joint weapons production and cooperation on missiledefense. Titled the "New Framework for the US-India Defense Relationship" (NFDR), signedby U.S. Defense Secretary Donald Rumsfeld and India's Defense Minister Pranab Mukherje.

4. Protection of Domestic Enterprices from Government Mandated Costs:

Mr Gary Locke, said market barriers of India may protect some domestic industries in the

short term, but in the long term will limit Foreign Direct Investment and imports that canenhance innovation within Indian partner companies, and increase the standard of living forIndia's people.

Even though India has made tremendous strides to open up its economy, there is much workleft to be done, he said. India will need an additional $1.2 trillion by 2030 to construct newroads, metros and subways as well as to upgrade its electric grid, water, communications andtransportation infrastructure, Mr Locke said US businesses can work with India to helpachieve these ambitious development goals.

However, he said, for this to happen, New Delhi should address US businesses' concernsincluding India's tariffs of 19 per cent on civil aviation aircraft, 30 per cent on pistachios, 26per cent on X-ray film and 50 per cent on apples.

He said the US firms also have concerns about India's non-tariff barriers including:Mandatory technology transfer requirements for telecom equipment, FDI limits in key sectorsand inadequate protection of intellectual property rights.

Higher import duties on semi-processed products than on raw materials, and higher still onfinished products. This practice protects domestic processing industries and discourages thedevelopment of processing activity in the countries where raw materials originate. Relatively

high tariffs, usually on "sensitive" products, amidst generally low tariff levels.

Even though India has made tremendous strides to open up its economy, there are still toomany tariffs and too many barriers to foreign participation in the Indian economy, includinglimits on foreign direct investment in key sectors, and inadequate protection of intellectualproperty rights.

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