The market entry strategy that the firm should use is a joint venture. The joint venture strategy will allow each firm to use the others strengths. The Saudi firm will need the Indian firm’s infrastructure and market contacts. The export markets are open for the Indian economy and will allow the Saudi firm to exploit for the benefit of stakeholders.
Market Trade History
India has for centuries exchanged goods with Europe, Arabia, Europe, West Africa, China, Syria, Persia, East Africa, Malaya, and the Far East.
The balance of trade between India and Saudi Arabia has exceeded $8.76 billion in value for year 2004-2005(Indo-Arab Chamber of Commerce & Industries, 2007). The value of trade between India and Saudi Arabia for the years 2006-2007 was $15.9 billion. India’s trade deficit with Saudi Arabia was approximately $10.7 billion for years 2006-2007(Indo-Arab Chamber of Commerce & Industries, 2007). The January 2007, the UK imported 330,437 pounds in value of products, which is up from 257,548 pounds for the same previous time span (Country Profiles, 2007). The UK exports to India for January 2007 were valued at 230,523 pounds which is a deficit of 99,914 pounds.
Current Partners & Trade Blocks
The top ten trade partners of India are China, United States, UAE, Saudi Arabia, Germany, Singapore, UK, Hong Kong, Belgium, and the Netherlands. Some of the trade blocks that India is associated with are AFTA, ASEAN, BAFTA, BANGKOK, CACM, CAN, CARICOM, etc.
Country Entry Restrictions
India does not have any FDI restriction nor are there any restrictions on joint ventures because both are encouraged. The government allows for the full repatriation of profits and capital investments (Food Industry Sector Report, 2008). There is an automatic approval of foreign investments up to 100%. There is zero import duty on all capital goods and raw materials up to 100% per centexport-oriented units. There is a income tax rebate...