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Why are Foreign Institutional Investors (FII) investing in India.BY: Muhammed Haris | Category: Business and Finance | Post Date: 2009-09-05
Huge investments are being done by FII (Foreign Institutional Investors) in Indian companies. But the question is - If India is a developing country, why do they rely on our services and invest in India. Do they lack the knowledge about poverty and social issues in India? Does India has a false image in International market? The truth is that they do not lack knowledge about the poverty of India neither there is any false image in the International market. The main reason why Foreign Institutional Investors put their money in India is because we have the ability to produce goods and provide services at a lower cost. The scarcity employment opportunities in India has created a situation where industries can easily hire a well qualified or even an over qualified professional at a lower cost, usually at a fraction of international wage standards. In developed countries getting good service from the well qualified professionals can be a significant burden on their budget. So staffing costs affect the profitability and the survival of these foreign companies. If a company does not control their cost then they will probably not survive, especially because their competitors might already be outsourcing in India to save costs. In India, there are so many qualified people, competing for good jobs. Pay scales provided by foreign companies may be much lower than their domestic rate, but that lower salary will be an excellent one for people in India due to lower living costs and currency exchange rate. If you post a single job, it is common to get a list of 100 candidates, each of them almost equally well qualified. As such the scarcity of employment opportunities brings good competition in the labour force and automatically improves the the quality and productivity which is highly favourable for foreign corporations. Labour costs in India rise each year and in some fields like software, people feel that we will no longer experience a double digit salary increases anymore. This is important to protect the cost benefits and continue to attract Foreign Institutional Investors to India. This is the reason that industries like BPO, IT and Manufacturing are steadily rising in India. There is hardly any big company in the entire world who does not have their presence in India in one way or the other. Some companies outsource their accounting and others outsource IT and BPO operations. Regardless of the domestic issues, they get an excellent service for their money. Article Source: http://www.saching.com About Author / Additional Info: Additional Articles: * Foods that should not be given to children: * Australian Cricket Team is a class apart: Reason for their success * Simplifying Education Management Software * Problem of stray cattle on the roads. Stray cows of Indian cities. * You have only 24 hours - Master the art of time management. Does this article violate or infringe on your copyright ? It is a violation of our terms for authors to submit content which they did not write and claim it as their own. If this article infringes on your copyrights, then use our Contact us form with the detailed proof of infringement along with the offending article's title, URL and writer name. If you do not hear back from us then contact us again in another 10 days. Thank you. Comments on this article: (0 comments so far) * Additional comments are now closed for this article *
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