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Tesco Plc in India

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Tesco PLC in India Many developing countries are emerging markets in which are attractive tons of foreign investors to participate. Like China, Russia, and Brazil, India is one of the most conceivably profitable places. However, in order to have a successful business in such markets, the investors have to consider many factors of those countries such as level of freedom, corruption, competition and risks. In this case, although India has restrictions on foreign direct investment (FDI) in retail trading, it is perceivably a lucrative emerging market for Tesco. Therefore, the issue here is whether Tesco should enter the Indian market. If so, when should be the proper time—before or after the restriction relaxed and with what strategies? …show more content…

In fact, the foreign retail stores must be located in suburban areas while some in the crowed areas would be required to close early for a few days a week. Also, the Indian government would impose that 100% of fruits, vegetables and grains that the retail stores will offer must be produced domestically. This regulation will stimulate the development of agriculture and farming locally by using agreements that ensure high quality produce and better earnings to poor Indian farmers. Because the elimination of the restriction on FDI is still ambiguous, the entry to India must be based on prudential decisions. Tesco has to weight costs and benefits that it is going to get from entering to India while the restriction is ongoing. Not only financial concerns, but Tesco also has to be aware of non-financial factors including risks and stabilities in India. In 2010, India has fallen in the rankings of a new political risk index released by Maplecroft, a company that assesses global risks for businesses. Of the South Asian nations, India has seen the biggest fall in the rankings to the 27th, descending nine places from the last year (2009). The country is rated as high risk in the Dynamic Political Risk Index (DPRI), which

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