Answer: SEZs are made by the govt. to attract MNCs as it does not levy taxes for first five years and provide them full security.. flexible labour laws are provided .
What are the steps taken by the government to attract MNCs?
In the recent years the Indian Government has taken special steps to attract foreign companies to invest in India: i The government has set up industrial zones called special Economic Zones SEZs. SEZs provide world class facilities – electricity water roads transport storage recreational and educational facilities.
What attracts MNCs India?
MNCs prefer India as their destination for setting business for following reasons: (i) India has highly skilled engineers who can understand the technical aspects of production. (ii)It has also educated English speaking youths who can provide customer care services. (iii)India has cheap labour and resources.
What policy should government of India follow regarding MNC?
MNCs operating in India should have a clear set of anti-bribery rules; on its part the Indian government needs to strengthen anti-corruption laws.
How is the government of India trying to attract more foreign investment?
The government of India is trying to attract more foreign investment in the following ways: Government has adopted the policy of liberalisation and lifted the trade barriers to allow foreign investment. In recent years industrial zones called Special Economic Zones are being set up.
What steps are necessary to ensure FDI inflows in India?
Transparent policy and enforcement of intellectual property rights, level of corruption, contract enforcement and tax regime are among the other important factors. Besides, cost competitiveness, availability of skilled labour force and business climate plays an important role in attracting FDI.
What government should do to attract FDI?
Governments encourage FDI through financial incentives; well-established infrastructure; desirable administrative processes and regulatory environment; educational investment; and political, economic, and legal stability.
What are the reasons for growth of MNCs?
Key Reasons for the Growth of MNCs
- To Operate Closer to Target International Markets. …
- Gaining access to lower costs of production. …
- Avoiding Protectionism.
Why is India a Favourite destination for MNCs Class 10?
Cheap and Abundant Availability of Raw Materials: India is well enriched in natural resources. This ensures the MNCs cheap availability of raw material and undisturbed and perennial supply of raw materials. This enables proper and smooth operation of MNCs.
Why do MNCs prefer developing countries for their setup?
MNCs from all parts of the world are usually attracted to developing countries by lower costs, strong growth prospects, and in many cases untapped natural resources.
How many multinational companies are there in India?
There are over 40,000 MNCs with over 2, 50,000 overseas affiliates.
What are the incentives extended by Govt of India for attracting foreign capital?
The Indian government has provided many incentives for attracting FDI, such as establishing Special Economic Zones (SEZs) where companies are entitled to certain benefits, exemption from duty on import, income tax exemptions, value added tax (VAT) rebate on export, opening up of many sectors for FDI, etc2.