Transcript MODULE VI
MODULE VI GLOBALIZATION / MNC/TNC EXIM Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world. FACTORS INFLUENCING Economic Political Common Ecological Constraints Cultural Values And Institutions, and Globalization of communication. EFFECTIVE FACTORS Technological change, especially in communications technology. Removal of capital exchange controls Free Trade Consumer Tastes Emerging markets in developing countries CONCEPT OF MNC’s Corporation which owns and control business or commercial undertaking in more than one Country It has 20-50% of net profit comes from foreign operations Whole Management Control by one unit Characteristics of MNC’s Hold up International Operations Activities are Huge Structured and Systematic Management Control Collective Knowledge Transfer TNCs Trans-National Corporations (TNCs) sometimes referred to as multinational companies, are enterprises that control economic assets in other countries — generally this means controlling at least a 10% share of such an asset. These companies command enormous financial resources, possess enormous technical resources and have extensive global reach. Potential to “generate employment, raise productivity, transfer skills and technology, enhance exports and contribute to the long-term economic development of developing countries EXIM POLICY Indian EXIM Policy contains various policy related decisions taken by the government in the field of Foreign Trade, i.e., with respect to imports and exports from the country and more especially export promotion measures, policies and procedures related thereto. Trade Policy is prepared and announced by the Central Government (Ministry of Commerce). India's Export Import Policy also know as Foreign Trade Policy, in general, aims at developing export potential, improving export performance, encouraging foreign trade and creating favorable balance of payments position. Exim Policy or Foreign Trade Policy is a set of guidelines and instructions established by the DGFT in matters related to the import and export of goods in India. The Foreign Trade Policy of India is guided by the Export Import in known as in short EXIM Policy of the Indian Government and is regulated by the Foreign Trade Development and Regulation Ac1992. DGFT (Directorate General of Foreign Trade) is the main governing body in matters related to Exim Policy. MAIN OBJECTIVEs The main objective of the Foreign Trade (Development and Regulation) Act is to provide the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India. Foreign Trade Act has replaced the earlier law known as the imports and Exports (Control) Act 1947. To accelerate the economy from low level of economic activities to high level of economic activities by making it a globally oriented vibrant economy and to derive maximum benefits from expanding global market opportunities. To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components, consumables and capital goods required for augmenting production. To enhance the techno local strength and efficiency of Indian agriculture, industry and services, thereby, improving their competitiveness. To generate new employment. Opportunities and encourage the getting of internationally accepted standards of quality. To provide quality consumer products at reasonable prices. INTERNATIONAL BUSINESS International business consists of transactions that are developed and carried out across national borders to satisfy the objectives of individuals, companies, and organizations. Basis the flow of ideas, services, and capital across the world Recommends consumers new choices Empower the attainment of a wider variety of products Facilitates the mobility of labor, capital and Innovative Technology Offer challenging employment opportunities BIFR The Government of India, in order to carry out the problem of industrial sickness, had set up a Board for Industrial and Financial Reconstruction (BIFR), under the purview of Sick Industrial Companies (Special Provisions) Act,1985 (SICA). Objective / Functions Restructuring the capital base of the company. Inducting more capital to improve its resource position. Merger and amalgamation of the sick company with a healthy unit. Providing soft loans to the company. Loan Made by Multinational / World Bank- Below Market Interest Rates Bringing about technological changes and modernization in the company. Bringing about a change in its management Writing off the interest burden of the company. Deferment its loans.