, Research Paper
Canada, with its economic and political stability offers a variety of business opportunities. With such a large population of immigrants, Canada is known for its acceptance of diverse cultures. English and French are Canada’s official languages and there are many other languages spoken freely by diverse racial groups on Canadian soil. Many different religions are also practiced freely and peacefully in Canada.
India has a population of 986.6 million people. This country holds 15 % of the world’s entire population. Within this country, a variety of cultures and traditions can be found. Christianity, Hinduism as well as the Muslim religion are all practiced freely in India. With 18 official languages and over 900 dialects, India is one of the most culturally diverse areas in the world. Tradition and heritage are very important to the Indian people. Many Hindus in India still practice the same hymns and chants created over 3000 years ago. Many Indians, both male and female still wear traditional garments whether in their native country or abroad.
The population of immigrants in Canada represents approximately 1/6 of the total Canadian population. In order to facilitate the transition for Indian immigrants who leave their native country to come to Canada, authentic, quality textiles, ranging from silks to cottons, canvasses and rugs will be made available to them. Many traditions are expressed through these textiles. Some of them tell stories or express tradition. Others are exclusive to particular areas in India, based on their design or texture.
The accepting nature of Canadians when faced with cultural diversity, as well as the large population of Indian immigrants makes Canada an ideal market in which to sell authentic Indian textiles.
2.1 Research Objectives
The objective of this project is to obtain enough information to suggest that Indian textiles can be sold profitably in Canada. A complete analysis on both India and Canada will be established in the following pages. This information will determine whether selling authentic Indian textiles in Canada through retail stores is feasible. Our secondary objective is to learn more about the Indian and Canadian cultures, political and economic characteristics, legislative systems and infrastructure.
2.2 Research Methodology
We used the Internet as our main research tool. Statistics and facts about both countries were readily available on the World Wide Web. Many sources were referred to when trying to find statistics and facts in order to lend credibility and accuracy to our paper. There were differences between some of the sources, which forced us to verify yet a third source to find answers.
2.3 Data Analysis Techniques
The data found on the web was used to investigate the many factors that enable us to penetrate this market and establish trade with India. Economic and political stability for example, is critical to trade between the countries involved. Other factors such as the product fit with the market and the market size were also critical to this project. Through hard statistics and facts, we were able to obtain enough information about the countries to make our import plan seem feasible.
2.4 Action Plan Timeline
Between both partners, there was approximately 46 hours spent to completing this project. The first month was spent collecting data on both countries. Organizing the information took the most time. Establishing our implementation plan came next and finally structuring both the presentation and written assignment.
3.1.1 Country Profile
India, with its population of 986.6 million people, is the world’s second largest country in terms of population. There are 18 official languages in India and over 900 dialects or closely related languages. Hindi is the most common language used and English, is the second most common. There is a remarkable mosaic of cultural and racial people found in India. Many Hindus, Christians, Sikhs, Jains, Buddhists and Muslims practice their religion freely and peacefully in India. Refer to Appendix ?A? for a detailed map of India.
3.1.2 Political Characteristics
3.1.2.1 General
The Capital of India is New Delhi. There are 25 states and 7 union territories, which divide the country. India gained independence from the UK on August 15, 1947. The national holiday is celebrated on January 26 and the Indian people have been celebrating this Anniversary of the Proclamation of the Republic since 1950.
3.1.2.2 Political System and Leaders
The Republic of India has a federal republic government system. It is a functioning democracy with a free and vibrant press. There are many political parties in India. Some represent communism or Marxist-Leninist ideals; others represent religious groups for example the Sikh or Muslim. There are socialist parties and some pressure groups, which are either religious or militant organizations, including Vishwa Hindu Parishad, and Rashtriya Swayamsevak Sangh. These various separatist groups often seek greater communal and/or regional autonomy. The chief of state is President Kicheril Raman Narayanan and has been since July 25, 1997. The Vice President is Krishnan Kant who has been in term since August 21, 1997. The head of government is Prime Minister Atal Behari Vajpayee and the cabinet consists of a Council of Ministers, which are appointed by the president with the recommendation of the Prime Minister. The president is elected for a five-year term by an Electoral College, which consists of elected members of both houses of Parliament and the legislatures of the states. Parliamentary members of the majority party elect the Prime Minister following the election. The bicameral Parliament consists of the Council of States (a body consisting of not more than 250 members, up to 12 of which are appointed by the president. The remainder are chosen by the elected members of the state and territorial assemblies) and the People’s Assembly (545 seats; 543 elected by popular vote, 2 appointed by the president; members serve five-year terms).
3.1.3 Economic Characteristics
3.1.3.1 General Information
India’s economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of support services. India’s international payments position remained strong in 1999 with adequate foreign exchange reserves, reasonably stable exchange rates, and booming exports of software services. Lower production of some nonfood grain crops offset recovery in industrial production. Strong demand for India’s high technology exports will bolster growth in 2000.
3.1.3.2 Economic Indicators
India’s GDP growth rate is between 6 and 7%. The GDP in $US is 466.1 billion. The GDP per capita is approximately US$1800. Agriculture represents 25% of the GDP composition by sector. Industry, which includes textiles, the product we are importing, and services represent 30% and 45% respectively. In 1995, India had the world’s 16th largest economy and rose to the 11th place in 1999. India’s purchasing power parity is at approximately $1.805 trillion and is the fifth largest economy in this category. 32% of India’s population lives in urban areas but there is a gradual and constant movement of the population from rural to urban areas. The labor force is mainly comprises occupations in agriculture 67%, services 18% and industry 15%. The inflation rate is approximately 4.7% and the income per capita is valued at US$ 472.
3.1.3.2 Social Development Indicators
The life expectancy in India is 62.5 years. Infant mortality rate is 64.9 per 1000. The labour force as a percentage of the population is 38% and people in absolute poverty represent about 1/3 of the population. The adult literacy rate is 52.1%. India occupies only 2.4% of the world’s land area but supports over 15% of the world’s population.
3.1.4 Legal/Regulatory Environment
The Indian legal system is based on the English common law. Supreme Court judges are appointed by the President and remain in office until they reach the age of 65. India is a member of many international organizations. These include the WTO, IMF, ISO, UNIDO and dozens more. In 1991, India began reforming economically. Tariff and tax rates were slashed and simplified and the rupee is now convertible.
3.1.5 Fiscal Characteristics
India’s budget revenues are worth $35.8 billion and its expenditures $66.3 billion, including capital expenditures of $15.9 billion. The industrial production growth rate is 6%. Textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum and machinery are the main industries in India. Exports from India in 1999 were worth approximately $36.3 billion. These include commodities such as textile goods, gems and jewelry, engineering goods, chemicals and leather manufactures. India’s main partners in trade are the United States, Russia, Japan, Iraq, Iran, and central and eastern Europe. India’s exports to Canada were valued at over $1 billion. India’s total imports were valued at about $50.2 billion in 1999. These import commodities included crude oil and petroleum products, machinery, gems fertilizer and chemicals. India’s external debt is valued at $98 billion. US$ 1 is equal to 45.797 rupees, which, is India’s currency.
3.1.6 Physical Infrastructure
The diversity of the Indian population is matched by its incredible physical diversity. India is the seventh largest country in land area with 3 287 263 sq. km. Northern India is home to the Himalayan mountain range and the third tallest mountain on the planet, Kanchenjunga (28,208 ft, 8,598 m). South of the Himalayas lies the valley of the great Ganges River. The river has created the wide and flat Gangetic Plain where millions of Indians live and rely on the water of the Ganges. The Ganges drains the south slopes of the Himalayas and flows eastward to the delta at the Bay of Bengal. India and Bangladesh share the delta. Floods as well as typhoons (hurricanes) often ravage this low-lying area, where the Calcutta is located. This explains why we are focusing mainly on the doing business in south India. Another major river, the Indus, flows through a small portion of India on its way from the Himalayas through Pakistan and out to the Arabian Sea. South of the river valleys lies to Deccan region. To the east and west of the Deccan lie the Eastern Ghat and Western Ghat, respectively. The Ghats are mountain ranges on the east and west coasts of the subcontinent. Much of India lies between the Tropic of Cancer and the Equator. The terrain in the south (Deccan Plateau) consist of upward plains, flat to rolling plain along the Ganges, deserts in the west, and the Himalayas are located in the north. Monsoon rains from the southwest in the Indian Ocean occur during the June through November wet season. India depends on the monsoon for much needed water for agriculture. The climate varies from tropical monsoon in south to temperate in the north. India’s natural resources are; coal (fourth largest in the world), iron ore, manganese, mica, bauxite, titanium ore, chromate, natural gas, diamonds, petroleum, limestone and (56%) arable land. Other land uses are; permanent crops (1%), permanent pastures (4%), forest and woodland (23%) and other (16%).
3.1.7 Commercial Infrastructure
3.1.7.1 Transportation
There is a total of 62,915 km (12,307 km electrified; 12,617 km double track) of railways in India. The highways represent 3 319 644 km in length and the paved roads represent a little over 1/3 of this number. There are 16 180 km of waterways, 3 631km of which are navigable by large vessels. The main ports and harbors are located in Calcutta, Chennai, Cochin, and Mumbai (Bombay). India’s merchant marine corps is comprised of 321 ships. There are 238 airports with paved runways and 108 with unpaved runways. Sixteen heliports can be found in India.
3.1.7.2 Communication
There are 18.95 million main telephone lines in use in India. There are 1.9 million mobile cellular telephones. The telephone service is mediocre. Local and long distance services are provided however, throughout all regions of the country. The demand for communication services is growing rapidly. The major objective for India is to continue to expand and modernize long-distance network in order to keep pace with the growing number of local subscriber lines. The local telephone service is provided by microwave radio relay and coaxial cable with open wire. Obsolete electromechanical and manual switchboard systems are still in use in rural areas. There are 116 million radios and 63 million televisions in India. There are 562 broadcast stations; 82 of which gave 1kW or greater power and 480, which have less than one kW of power. Internet service is available although the number of ISPs could not be found.
3.1.8 Product Fit with Market
Not Applicable
3.1.9 Competitive Barriers
Not Applicable
3.1.10 Risk Considerations
Not Applicable
3.2.1 Country Profile
Canada is the world’s second-largest country (9 970 610 km2), surpassed only by the Russian Federation. Canada?s population as of 1998 was 30 675 398. Canada has two official languages: English, the mother tongue of about 59% of Canadians; and French, the first language of 23% of the population. A full 18% have either more than one mother tongue or a mother tongue other than English or French, such as Chinese, Italian, German, Polish, Spanish, Portuguese, Punjabi, Ukrainian, Arabic, Dutch, Tagalog, Greek, Vietnamese, Cree, Inuktitut, or other languages. More than four-fifths of Canadians are Christian, with Catholics accounting for about 47% of the population and Protestants about 36%. Other religions include Judaism, Islam, Hinduism, Sikhism and Buddhism. Some 12.5%, more than any single denomination except Roman Catholic, have no religious affiliation at all. Diversity is the keynote of Canada’s geography, which includes fertile plains suitable for agriculture, vast mountain ranges, lakes and rivers. Wilderness forests give way to Arctic tundra in the Far North. Canada has six time zones. The easternmost, in Newfoundland, is three hours and 30 minutes behind Greenwich Mean Time (GMT). The other time zones are the Atlantic, the Eastern, the Central, the Rocky Mountain and, farthest west, the Pacific, which is eight hours behind GMT. Refer to Appendix ?B? for a detailed up-to-date map of Canada.
3.2.2 Political Characteristics
3.2.2.1 General
The Capital city of Canada is Ottawa, in the province of Ontario. Canada has 10 provinces and 3 territories, each with its own capital city. . On July 1, 1867, Canada East, Canada West, Nova Scotia and New Brunswick joined under the terms of the British North America Act to become the Dominion of Canada.
3.2.2.2 Political Systems and Leaders
Canada is a constitutional monarchy and a federal state with a democratic parliament. Her Majesty Queen Elizabeth is Canada’s Head of State and the Queen of Canada. Her representative in Canada is the Governor General, currently Adrienne Clarkson. The head of the majority party in Commons is the nation’s prime minister and the Head of Government (currently Jean Chr?tien, of the Liberal party). The deputy prime minister is Herb Gray. The Parliament of Canada, in Ottawa, consists of the Senate, whose members are appointed and the House of Commons, whose members are elected. On average, members of Parliament are elected every four years. There are several major political parties, the biggest of which are as follows: (Liberal Party of Canada, Progressive Conservative Party of Canada, New Democratic Party of Canada, Canadian Alliance Party, Bloc Quebecois a separatist party present only in Quebec).
3.2.3 Economic Characteristics
3.2.3.1 General Info
The principal natural resources are natural gas, oil, gold, coal, copper, iron ore, nickel, potash, uranium and zinc, along with wood and water. Leading Industries include automobile manufacturing, pulp and paper, iron and steel work, machinery and equipment manufacturing, mining, extraction of fossil fuels, forestry and agriculture. The official Canadian Currency is the Canadian Dollar ($). The Canadian dollar is divided into 100 cents. Canada’s leading exports are automobile vehicles and parts, machinery and equipment, high-technology products, oil, natural gas, metals, and forest and farm products.
3.2.3.2 Economic Indicators
Canada?s GDP stood at $US 617.6 Billion. The inflation rate steadied at 1.7%, while the unemployment rate dropped to 7.8%. In addition, Global Imports topped $US 217 Billion. Canada holds the keys to success in the new economy: Canadian entrepreneurs are at the forefront of key industrial and technological sectors; our workers are skilled and mobile; and the Government of Canada is an important partner in securing trade opportunities and supporting R&D. The government of Canada has undertaken to lay the foundation for an economy that is more flexible and better adapted to the challenges of the next millennium:
? By supporting R&D in key sectors – $2.55 billion across Canada
? By investing in partnership with the private sector in key growth areas such as environmental technologies, enabling technologies and the aerospace industry to increase our market share abroad and ensure economic growth at home
? By partnering with business in seeking out foreign investment in leading-edge and growth sectors through investment Partnership Canada
? By signing an interprovincial trade agreement designed to increase the free movement of goods and services within Canada;