There are many natural resources that firms can take advantage of as well. Additionally, Russia is a gateway to other markets with which it has close trade ties, throughout the former Soviet Union.
India
India is the second most-populous country in the world with 1.2 billion and may eventually overtake China in that regard. This alone makes it enticing. Certainly, its per capita GDP does not, as most Indians are dirt poor. What makes India attractive is the country's high level of economic growth. India has the world's 5th-largest GPD and it grew at 10.4% last year (CIA World Factbook, 2011), accelerating an already hot pace. This economic improvement has lifted millions of Indians out of poverty in a very short period of time. In under ten years, the number of middle class households had more than tripled. There are now over 200 million Indians living in middle-class households.
Despite these successes and the much-publicizing offshoring of call centers, India attracts relatively little foreign direct investment, sitting at 23rd in the world, between Poland and Saudi Arabia. While the country is in the World Trade Organization, it still has a high level of government involvement in business, a holdover from the days of near-Communist Indian governments. This heavy involvement, combined with rampant corruption, presents unique challenges to firms in the Indian market. Transparency International rated India's corruption perceptions index at 3.3. While not the worst in the BRICs (Russia at 2.2 is worst), it still ranks lower than either Brazil or China and far below Western markets.
Competition in India is also characterized by a high level of government involvement. Many firms form joint ventures with local companies in order to help navigate the political system, reduce political risk and assist with India's complex distribution networks. At the retail level, however, while things are competitive once a local partner has been established there are many channels that can be used to distribute. This is especially true in the country's cities, where most of the middle class and upper class Indians live.
India has, in recent years, attracted service industries, because its population is relatively highly educated and English-speaking, yet works for a low wage relative to workers in the U.S., Canada or Britain. The IT services industry in India has grown to become a $60 billion industry (Wharton, 2011).
For the foreign manager, India is a difficult country in which to operate because of the vastly different culture, the high levels of corruption and the heavy government involvement in business. However, the middle class is growing rapidly, and the country is well positioned to become a dominant player in the global services industry. As such, India remains a compelling proposition if a local partner can be found to navigate the complex Indian political environment.
China
China is the world's most populous country and its second-largest market (CIA World Factbook, 2011). It has also become the world's manufacturing center. It has the 9th-highest rate of foreign direct investment, the 2nd-most exports, the 3rd-most imports and the economy is growing at over 9% annually. It is this growth rate that makes China such an attractive market for international business, and the country's low cost of manufacturing makes it attractive for outsourcing of production.
As with the other BRIC countries, China still has high trade barriers despite recently joining the WTO. As a communist country, the government is heavily involved in most aspects of Chinese business. Foreign firms must either find a local partner or outsource to Chinese firms entirely. The cultural barriers between China and the West are high, and difficult to overcome because there are so few capable Chinese managers -- they often must be imported from Taiwan or Hong Kong.
Competition is fierce in China, as there are local companies saturating every industry. In addition, the lack of intellectual property rights makes China a difficult proposition for companies that rely on brand strength for competitive advantage. The Chinese consumer responds to different triggers as well -- there is a high learning curve and those Western firms that have been successful have generally utilized local partners...
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