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Risk Profile: Political, economic, terrorism, physical, and crime risk for India

Prepare a risk profile for India, including key factors and how they could be risky for the company. Include political, economic, terrorism, physical, and crime risk.

Address the following in your profile:

- India's political stability
- Exchange rates from the past and current between India and the U.S. dollar
- Information on localized rebellion, social or religious strife, or insurrection
- Physical landscape of India (mountains, hills, sand, flat, rainforest). Climate and how the company may be affected by it.
- India's crime rate and how this may affect your company's business.

Include any other risks you find.

Solution Preview

//Firstly, we will give an overview of India and then risk factors will be discussed.//

India is a country with diverse cultures. It is one of the oldest and greatest civilizations of the world. India is the 7th largest country in the world. The Indian economy is expected to grow up to 7.2%. To expand the market in India, a company has to consider the risk factors as political risk, economic risk, etc. To predict the future of the company in that market, the factors to be considered are:

Political Risk: According to the international business risk consultancy firm, many developing countries face political risk problems at a medium level, whereas India is facing low political risk and it gains benefit from instability. India suffered from political instability as there were many parties and no party could win a major success. This lead to the formation of the coalition government. But after 1999, a strong government emerged. Political instability in India is no risk to foreign investors, as the policies built by the past government cannot be upturned by the new government. As it is a democratic nation, the chances of foreign dictatorship are less and due to the political instability, the future of the economic policy would not be affected.

Any company, to expand its market, observes not only political stability, but also labor activism and political violence, as in India, many strikes etc. are organized to achieve political ends. In the strikes, all business and transportation system are closed and people stay at home only. This leads to economic loss to the country. India lacks in high technology infrastructure. The funds which are allotted by the government to invest in the infrastructure department gets used by many officers and politicians for personal use, which leads to a loss for businesses expanding in India. There is labor shortage of skilled labors in India as the unskilled labors are in abundance. This is a great challenge for a company and this leads to more competition, inflated salaries and high employee turnover rate.

In India, the factors which may affect the country politically can be social, economic, cultural, etc. This can be either at a federal level, state level, or at district level as India has thousands of political parties in existence (Whelan, 2008).

//In the above section, we have discussed India and its political risk affecting any new business. Now we will discuss other factors which affect a company expanding in India. Now we will explain the economic risk.//

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Solution Summary

This paper deals with the Indian scenario. In this, we will discuss all the risk factors which the company considers when it plans to expand the market in other countries. They are political risk, economic risk, terrorism risk, physical risk and crime. A total of 9 references and 1,407 words.