Okay, here are the key points addressing your assignment questions:

1. Foreign Brands/Products in Indian Market

Here are five examples of foreign brands available in India, along with their parent company, origin,
and typical entry mode:

Mode(s) of Entry into

Brand/Product Parent Company Country of Origin
India

Initially exporting, later

established Wholly Owned
Samsung Samsung Electronics South Korea
Subsidiaries (WOS) for
manufacturing and sales.

Wholly Owned Subsidiary

(Nestlé India Ltd.) with
Nestlé (e.g.,
Nestlé S.A. Switzerland extensive local
Maggi, KitKat)
manufacturing, R&D, and
distribution networks.

Joint Venture (JV) with

Toyota Toyota Motor Corp. Japan Kirloskar Group (Toyota
Kirloskar Motor).

Master Franchise
Domino's Pizza Domino's Pizza, Inc. USA Agreement (held by
Jubilant FoodWorks Ltd.).

Inter IKEA Systems

Sweden (Concept
B.V. (Owner of Wholly Owned Subsidiary
Origin) /
concept & (WOS) for retail
IKEA Netherlands
franchisor) / Ingka operations, establishing
(Holding
Group (Largest large format stores.
structures)
franchisee)

Note: Entry modes can evolve. Companies might start with one mode (like exporting or licensing) and
later shift to JVs or WOS as they gain market understanding and commitment.

3. Trends in India's Foreign Trade Since 2000

India's foreign trade landscape has transformed significantly since 2000:

 • Dramatic Growth: Both exports and imports have increased manifold, reflecting India's
deeper integration into the global economy. Total trade (exports + imports) crossed
significant milestones during this period.

• Persistent Goods Trade Deficit: India has consistently imported more goods (in value) than it
has exported. This deficit is heavily influenced by global crude oil prices (a major import) and
gold imports.

• Services Trade Surplus: India generally maintains a trade surplus in services, largely driven by
the booming IT and IT-enabled services (ITES) sector. This surplus helps cushion the impact of
the goods trade deficit on the overall current account.

• Shift in Composition:

o Exports: While traditional exports like textiles, gems, and jewelry remain significant,
there has been a notable rise in the export of engineering goods, pharmaceuticals,
chemicals, automobiles, and refined petroleum products. Service exports have
become a dominant feature.

o Imports: Crude oil, electronic goods, machinery (electrical and non-electrical), gold,
and chemicals consistently form a large part of India's import basket.

• Diversification of Partners: Trade relationships have diversified. While the US and EU remain
crucial partners, trade with Asian economies, particularly China, UAE, Saudi Arabia,
Singapore, and the ASEAN bloc, has surged. China emerged as one of India's largest trading
partners, especially as a source of imports.

• Policy Influence: Successive Foreign Trade Policies (FTPs) and initiatives like Special Economic
Zones (SEZs) and 'Make in India' have aimed to boost exports and streamline trade, although
their effectiveness varies. Recent policies focus on reducing import dependence in certain
sectors and integrating into global value chains.

• Global Impact: Trade volumes were affected by global events like the 2008 financial crisis
and the COVID-19 pandemic, which caused initial disruptions followed by shifts in trade
patterns and a focus on supply chain resilience.

5. Blocking Free Market Access

Both developed and developing countries employ various measures, often called trade barriers, to
restrict free market access, protect domestic industries, or achieve policy goals. These include:

• Tariff Barriers (Import Duties): Taxes levied on imported goods, making them more
expensive for domestic consumers and thus less competitive with local products.

o Developed Country Example: The US imposing tariffs on steel and aluminum imports
from various countries. The EU historically used high tariffs on agricultural imports
under its Common Agricultural Policy.

o Developing Country Example: India levying import duties on fully built automobiles
or certain electronic goods to encourage domestic production.

• Non-Tariff Barriers (NTBs): These are more diverse and often less transparent:
 o Quotas: Quantitative limits on the amount of a specific good that can be imported.
(Used by both).

o Subsidies: Financial support from governments to domestic producers, making their

goods cheaper or supporting their exports. (e.g., Agricultural subsidies in the US and
EU; developing countries might subsidize specific industries).

o Sanitary and Phytosanitary (SPS) Measures: Regulations concerning food safety and
animal/plant health. While necessary, excessively strict or arbitrarily applied SPS
standards can act as barriers. (e.g., Developed countries imposing stringent pesticide
residue limits that are hard for developing country farmers to meet).

o Technical Barriers to Trade (TBT): Mandatory product standards, testing,

certification, and labeling requirements. Differences in standards or complex
procedures can hinder imports. (e.g., Specific safety or environmental standards for
electronics or machinery in developed markets).

o Import Licensing: Requiring importers to obtain a license, which can be complex,

slow, or discretionary.

o Local Content Requirements: Rules stipulating that a certain percentage of a product

must be made using domestic materials or labor, often seen in developing countries
promoting industrialization.

o Anti-dumping and Countervailing Duties: Duties imposed to offset imports sold

below cost ("dumping") or benefiting from foreign subsidies. While permitted by
WTO rules, their frequent or aggressive use can be protectionist. (Used actively by
India, US, EU, and others).

6. US-China Trade War and India's Opportunity

• Highlight of the Trade War: Initiated prominently around 2018, the US-China trade war
involves reciprocal tariffs imposed on hundreds of billions of dollars worth of goods. The US
cited reasons like the large bilateral trade deficit, intellectual property theft, forced
technology transfer, and unfair state subsidies in China. China retaliated with its own tariffs.
The conflict has extended beyond tariffs to include technological competition
(semiconductors, 5G), investment restrictions, and national security concerns. While there
have been periods of negotiation and partial agreements (like the Phase One deal),
underlying tensions and many tariffs remain in place as of early 2025, signifying a continued
strategic rivalry.

• India's Potential Opportunity: The trade war and the broader trend of diversifying supply
chains away from China ("China+1" strategy) present potential opportunities for India:

o Trade Diversion: India could potentially increase its exports to both the US and China
in product categories where the other country faces tariffs (e.g., certain chemicals,
textiles, engineering goods, electronics assembly).

o Investment Diversion: Companies looking to reduce reliance on China for

manufacturing might consider India as an alternative production base, potentially
boosting foreign direct investment (FDI) in sectors like electronics, pharmaceuticals,
and automotive components. India's Production Linked Incentive (PLI) schemes aim
to attract such investments.
 o Market Share Gains: India could potentially capture market share vacated by US or
Chinese firms in third countries due to the conflict's impact.

• Opinion on Exploring the Opportunity: Yes, India can explore this opportunity, and it is
actively trying to do so. There is anecdotal evidence and some data suggesting gains in
certain sectors (like mobile phone assembly and exports). However, realizing the full
potential faces significant challenges:

o Manufacturing Competitiveness: India needs to improve its scale, efficiency, quality

standards, and cost-competitiveness compared to other potential beneficiaries (like
Vietnam, Mexico, or Southeast Asian nations).

o Infrastructure: Logistics, power, and transportation infrastructure need significant

upgrades to support large-scale manufacturing and efficient exports.

o Ease of Doing Business: While improving, bureaucratic hurdles, complex regulations,

and land acquisition issues can still deter investors.

o Skill Development: Ensuring the workforce has the necessary skills for advanced
manufacturing is crucial.

o Policy Stability: Consistent and predictable policies are needed to attract long-term
investment.

In conclusion, while the US-China trade tensions create a window of opportunity for India, seizing it
requires sustained domestic reforms, infrastructure development, and a strategic focus on improving
overall competitiveness. It is not an automatic gain but a chance that needs to be actively pursued
and won.

Here are the key points addressing your assignment questions:

1. Foreign Brands in India: Examples & Entry Modes

The key point is that foreign companies use various strategies to enter the Indian market.

• Diverse Entry Modes: Common methods include:

o Wholly Owned Subsidiaries (WOS): Full control, significant investment (e.g.,

Samsung, Nestlé, IKEA).

o Joint Ventures (JV): Partnering with local companies, sharing risk and expertise (e.g.,
Toyota Kirloskar).

o Franchising: Licensing brand and operating model to local entities (e.g., Domino's
Pizza, McDonald's).
 o Importing/Distribution: Initial entry often involves selling products through local
distributors.

• Examples:

o Samsung (South Korea): Primarily WOS for manufacturing/sales.

o Nestlé (Switzerland): WOS (Nestlé India Ltd.).

o Toyota (Japan): JV (Toyota Kirloskar Motor).

o Domino's Pizza (USA): Master Franchise (Jubilant FoodWorks).

o IKEA (Sweden/Netherlands): WOS for retail.

3. Key Trends in India's Foreign Trade Since 2000

The central theme is significant growth and structural shifts in India's trade.

• Overall Growth: Massive increase in both export and import values, indicating greater global
integration.

• Trade Balance: Consistent deficit in goods trade (imports > exports), often driven by oil/gold
imports. Consistent surplus in services trade (driven by IT/ITES), partially offsetting the goods
deficit.

• Composition Shift:

o Exports: Move towards higher value-added goods (engineering, pharma, electronics)

and strong growth in services exports.

o Imports: Dominated by essentials like crude oil, but also significant imports of
electronics, machinery, and gold.

• Partner Diversification: Rise of Asian partners (China, UAE, ASEAN) alongside traditional
partners (US, EU). China became a major import source.

• Policy Impact: Trade liberalization and specific policies (FTPs, SEZs, PLI) aimed at influencing
trade flows.

5. Blocking Free Market Access: Methods Used

The key idea is that both developed and developing nations use various tariff and non-tariff barriers
to restrict imports.

• Tariff Barriers: Direct taxes (import duties) on imported goods. Used by both, sometimes
higher in developing nations for protection/revenue, or targeted 'tariff peaks' in developed
nations for sensitive sectors (e.g., agriculture).

• Non-Tariff Barriers (NTBs): More subtle methods:

o Quotas: Limits on import quantity.

o Subsidies: Government support to domestic firms.

o SPS Measures: Health/safety standards (can be used restrictively).

o TBT: Technical standards/testing (can favor domestic firms).

 o Local Content Rules: Requiring domestic inputs (more common in developing
countries).

o Anti-dumping Duties: Counteracting unfairly low prices (used globally).

• Motivation: Protection of domestic industries, revenue generation, addressing trade

imbalances, political reasons.

6. US-China Trade War & India's Opportunity

The core points are the ongoing nature of the conflict and the potential, yet challenging,
opportunities for India.

• Trade War Context: Started around 2018 with US tariffs citing trade imbalances and unfair
practices; China retaliated. Involves tariffs on billions worth of goods and extends to
tech/investment restrictions. Tensions remain high.

• India's Potential Opportunities:

o Trade Diversion: Chance to export more to US/China in categories affected by tariffs

on the other country.

o Investment Diversion: Potential to attract manufacturing relocating from China (part

of "China+1" strategies), aided by initiatives like PLI schemes.

• Opinion & Challenges:

o Opportunity Exists: India can benefit from supply chain shifts.

o Significant Hurdles: Requires enhancing manufacturing competitiveness (cost, scale,

quality), improving infrastructure, simplifying regulations (ease of doing business),
and addressing skill gaps to effectively compete with other nations (e.g., Vietnam,
Mexico) vying for the same opportunities. Success is not guaranteed and requires
proactive effort.