The Success of Rio Tintos Moves to India Essay Example | Topics and Well Written Essays - 2000 words

The Success of Rio Tintos Moves to India - Essay Example Tinto’s machines include Bulldozer, compact excavation machines, shredders, and grinders2. The mine raw materials from the mines are treated using fans. After treatment stage, decomposition and purification process follows immediately. The result of the two phases is a semi-solid product. This product is concentrated to a finished final product. The report summarizes the results of feasibility study in India. Rio Tinto proposes to use India as a distribution centre for its copper products. This company has taken this decision because of limited copper ores in India. Their plans are to extract and smelt copper using the sophisticated machinery from their company in Australia. They will then export copper products to enormous market in India. In this way, Rio Tinto will tap the untapped Indian market. They intend to take advantage of the large populace population in India. Rio is confident that India will not import copper product anymore from other countries. It expects a fair marketplace in India. Expansion of market to any region of this world is a challenge3. This is a guiding principle at the heart of the Rio Tinto management. Rio Tinto seeks important details on India’s technology level, the available workforce, and the type of infrastructure. Since India will serve as a distribution point, the company does not require a manufacturing plant. Rio Tinto is aware of possible market risk in the foreign nations. Technology is a very critical in the expansion of Rio Tinto’s. This is the reason why it has to do an in-depth research on market prospects in India. The report seeks to address many issues, which are central to the success of Rio Tinto’s moves to India. To start with, it will evaluate political environment in terms of India’s government stability. Next, it will discuss the legal framework with key interest in business law, labor laws, and taxation law. This is very crucial because the laws stipulate the procedures of e xport and import trade. The report will investigate both economic and socio-cultural environment. It will endeavor to assess tax policies, currency exchange rates, and inflation rates in India. Later it will survey the technological aspect of business environment and analyze external and internal factors, which affect Rio Tinto. This is the SWOT analysis. Finally, the report will give its recommendations to the Rio Tinto’s management on the feasibility of India as their market target4. 2.0 Political Environment 2.1. Government stability The India’s current government under Pratibha Patil has sound policies to promote direct foreign investments. The government embraces global trade links. They have a stable political system whereby they hold elections after every five years. Their rich democratic system receives acknowledgement globally. 2.2 Government and contribution Health investment policies attract a large pool of both domestic and foreign investors. The Foreign in vestment policy came into effect back in 1991. This policy has undergone through major reforms to suit the interest of investors. Currently the policy allows automatic and government-administered ways of investment5. The foreign investment policy is friendly enough to permits investor from outside to collaborate with either local or their foreign counterparts. 2.3 Analysis Indian government shows political will.