India is a country that is richly diverse and complex and therefore, it might be difficult for an entrepreneur to determine exactly or to make general conclusions that may be appropriate for doing business there. There are many factors to consider such as the economic, political, social, cultural, religious, as well as geographic ones. There are also other things to consider while doing business in India, like etiquette. Cross-cultural awareness brings many advantages for maximizing the potential of a business.
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There are various potential foreign business opportunities that can be found in India. In this paper the business opportunity of textiles will be discussed. The textile industry has been contributing largely to the economies of many countries all over the world. The Indian textile industry has also been doing this for many years. The textile industry is one of the largest segments of the Indian economy and this accounts to about 14% of the overall Indian economy (Riello and Tirthankar 117). It occupies a unique position in the economy of India as it has provided many employment opportunities producing goods for export.
Absolute and Comparative Advantage
In the international trade and policy, there are some factors that determine why a country may have an advantage in exporting some of its products to another country. Some of these factors include: commercial policies, demand patterns, technological superiority, and the availability of resources.
India has seen many technological advances and its textile industry has remained competitive globally. The cost of labor impacts greatly when determining the production cost. India is compared favorably with other developing countries in the world and this is as far as low labor costs are concerned. The textile export firms in India have been paying higher wages to their laborers showing that the industry is doing well (Pal and Pinaki 55). One of the reasons is that they have unique designers with indispensable skills. In addition to that they have better trained pattern makers and craftsmen, as well as cutters and tailors. All of this has greatly contributed to the success of the textile industry.
Availability and Cost of Resources
The cotton prices in India are relatively low compared to that in other countries. This is because of a ban that has been paced on imports and the control that is exerted on the exports of cotton. Due to this Indian cotton prices remain lower than that of their international counterparts. Apart from cotton there are other types of raw material like the synthetic fiber. The Indian economy has always been an agriculture-driven economy meaning that they have a strong base of raw materials.
They produce fibers manufactured of both natural and man-made materials. The natural ones include cotton, wool, silk, and jute. The man-made ones include nylon, polyester, acrylic, viscose and also polypropylene. Favorable climatic conditions have contributed to the production of their natural raw materials. Furthermore, India has available labor force which comes at a low cost (Abraham and Sasikumar 259).
Since the Indian textile industry has been able to create products that satisfy the needs of their consumers, their products have increased in their demand. For example consumers are now able to get international products in their domestic markets. In addition to that there have been more developments of new designs meeting the needs of their customers.