India’s growth story: Opportunities for French companies

Abstract

The advent of globalization has triggered a look-out by MNCs for more and more avenues outside their national boundaries to expand their empire. Added to this is the fact that products and services are getting more standardized and therefore it directly appeals firms to expand their base across borders to leverage the standardized nature of services and products without investing much in re-designing and customizing efforts. Many firms go to other nations to secure raw materials and labour at lower costs and thus end up establishing their base there. Growing by expanding in different nations gives firms a chance to establish their brand equity and thus become global - a goal that increasing number of multinational firms are aiming to achieve. A phenomenon that has fuelled the growth of MNCs in developing nations like India and China is the emerging potential of these nations and therefore multinational firms leave no chance to tap this huge potential. Hence till recent past we have seen European and U.S. firms venturing into the markets of these developing countries. But off late this trend has been accompanied by a new trend - a trend which embarks the journey of Indian firms venturing into foreign markets. Be it in the domain of IT and services or manufacturing, Indian firms are entering into new nations and expanding their horizons. Given this trend of cross border expansion and exploring new markets by multinational firms, there is a need to understand the reasons and factors which help to promote such growth. At the same time it becomes necessary to draw parallels from these trends and explore new sectors where such a cross border growth would be prominent from Indo-Europe perspective. As both Indian and European firms are looking to expand their reach so one needs to understand what makes such a move successful and what caveats are to be taken care of. The proposed project seeks to examine the expansion trends of Indian and European firms across borders. The study encompasses the nature of various industrial sectors where expansion moves are most prominent, use of different modes of expansion and the driving forces behind those expansions. After analysis of above trends, the project aims at finding the ‘hot’ sectors where Indo-Europe cross-border investments would be beneficial for different stakeholders involved. This set of proposals would also take into consideration the role of various external factors impacting such growth.