COMPARATVE STUDY ON

BUSINESS ENVIRONMENT
OF INDIA AND GERMANY

SUBMITTED TO :
DR. PURVI PUJARI
GROUP MEMBERS
Name Roll numbers
Asmita Shinde 2020M0171
Aliya Anchan 2020M0096
BK Swaroop 2020M0099
Manoj Gupta 2020M0122
Saqlain Datey 2020M0105
Pranali Shinde 2020M0173
Pooja Gupta 2020M0120
Tejal Walekar 2020M0185
INTRODUCTION TO BUSINESS
ENVIRONMENT
INDIA
India is a prosperous developing country with a strong secondary, tertiary, and quaternary sector.
The corporations and businesses that we visited have shown me that India is an emerging economy
full of start-ups, innovations, domestic/international relations, and growth potential.

GERMANY
Culture-wise, Germans have a monochronic nation focused on accomplishments, attention to
detail, responsibilities, and competition. The cultural traits combined with an outstanding ability to
generate and control profitable businesses made Germany the undisputed leader in Europe from
both a political and economical point of view.

• To date, the economic relations between India and Germany have been strategic. Both countries
are democracies with a federal structure and share a broad range of similar values as well as
common views on international issues
 DEMOGRAPHIC ENVIRONMENT
Demographic analysis is the study of a population based on factors such as age, race, and sex.

Germany
 Germany have Population of 80.2 million which includes largest age group of 40 – 59 yrs. Old age
group in Germany. It has one of the world’s highest level of Education (graduation after 10th).
 Technological development (ranks 4th in nanotechnology, 4th in ITC Market).
 Economic productivity. (97/100 points by end of this year).
India
 India is second most populated country in world after China. It is about 9 times bigger than Germany.
India includes average age of 29 yrs., with more 50% below 25 , 65% below age of 35. It has modern
education ( graduation after 12th).
 Technological development (I.T industry – IT service, BPO has increased up to 7.7%).
 Economic productivity (labour productivity 6.3%, GDP 7.3%, , current situation is 5.2%).
COMPARISON BETWEEN INDIA & GERMANY
POLITICAL ENVIRONMENT
The political environment with respect to business environment includes all the rules
and regulations, laws and roles of the government in the day to day functioning of the
business.

Examples of Political Environment affecting Business

• The policies made by the government have a significant impact on any company’s
international market.
• Also the tax rates decided by the government impact the firms in different ways
• Promotion of self-business by the government
POLITICAL ENVIRONMENT OF INDIA VS GERMANY:

 Political System

 Political Institutions

 Political Parties And Its Ideologies

 Political Stability

 Control of Corruption

 Indo-German realtions
LEGAL ENVIRONMENT
Germany’s Legal Environment
• German legal system is driven by constitutional law but is also influenced by
international law and the law of the European Union
• The legal codes are divided into two main categories. 1) General Codes .2) The second
one
• Regulatory Environment: Federal Cartel Office holds the responsibility to control
unfair market behaviors. Furthermore, businesses are regulated in Germany as per the
business and market requirements
• Legal issues faced by international firms:- 
 Starting a business
  Property Registration
 Paying Taxes
India’s Legal Environment
• India follows the common law and has a single court system to administer both Central and State laws.
The court system is broadly three tiered, comprising the lower District courts, the High Courts and the
apex court – the Supreme Court of India.
• As all business policies are highly influenced by government, the organization should have thorough
knowledge of these policies.
1.Indian contract act 1872
2. Indian sale of goods act 1930
3. Indian partnership act 1932
4. Industrial dispute Act 1947
5. Minimum wages act 1948
6. Indian companies act 1956
7. Foreign exchange regulation act (FERA ) 1973
8. Foreign exchange management act 1999
9. Monopolies and restrictive trade practice act 1969
10. Consumer protection act 1986
• Legal issues faced by international firms:
 Entry options
 Foreign Investment Policy
 Taxation
ECONOMIC ENVIRONMENT
• Economic environment refers to all those economic
factors which have a bearing on the functioning of a
business unit. Business depends on the economic
environment for all the needed inputs. It also
depends on the economic environment to sell the
finished goods. Naturally, the dependence of
business on the economic environment is total and it
is not surprising because, as it is rightly said,
business is one unit of the total economy.
• Economic environment influences the business to a
great extent. It refers to all those economic factors
which affect the functioning of a business unit.
Dependence of business on economic environment is
total — i.e., for input and also to sell the finished
goods.
 IMPACT OF ECONOMIC ENVIRONMENT ON
BUSINESS

 Economic Growth and development

 Income and Employment

 Inflation

 The cost of credit

 Exchange Rate
ECONOMIC ENVIRONMENT OF INDIA VS GERMANY
• Economic Freedom
According to Atkinson (1983), economic freedom is mainly defined as a combination of
economic factors which explain how national income is accumulated, distributed, under which
institutional structure it is accumulated, and the kind of economic policy at work that time.
• Standard of Living
Skantze (1992) described standard of living as the dimension of how well the basic needs of life
are met. Germany outperforms a lot of countries when it comes to standard of living and better
life indices.
• Economic System
An economic system is a means by which societies or governments organize and distribute
available resources, services, and goods across a geographic region or country. Economic
systems regulate the factors of production, including land, capital, labor, and physical
resources. An economic system encompasses many institutions, agencies, entities, decision-
making processes, and patterns of consumption that comprise the economic structure of a
given community.
 ECONOMIC INDICATOR
An economic indicator is a metric used to assess,
measure, and evaluate the overall state of health of
the macroeconomy. Economic indicators are often
collected by a government agency or private
business intelligence organization in the form of a
census or survey, which is then analysed further to
generate an economic indicator.
Important Economic indicators are:
• Gross Domestic Product
• Unemployment Rate
• GDP Per Capita
• Export
• Consumer price Index
• Central Bank Discount Rate
• Gross National Income
 BUSINESS CULTURE AND SOCIO-
CULTURAL ENVIRONMENT
 Business culture refers to a set of shared attitudes, values, goals, and practices that
characterizes an institution, organization or group.
 The cultural environment refers to factors and trends related to how people live and behave
and what they buy.

 CULTURAL FACTORS INCLUDE:

• Values: enduring belief or feeling that a specific mode of conduct is personally or socially
preferable to another mode of conduct
• Attitudes: learned tendency to respond in a consistent way to a given object or entity
• Beliefs: an organized pattern of knowledge that an individual holds to be true about the
world
IMPACT OF CULTURE ON BUSINESS
 Culture creates people
 Culture influences what is demanded
 Determines attitude to business & work
 Collectivism or individualism
 Orientation towards new ideas
 Religious dimension
 Cultural adaptation – manner in which institutions and systems fit into physical or social
environment – essential for survival
 Cultural shock – strangeness of new environment
 Cultural transmission – transfer of elements
 Cultural conformity – conform to norms or deviate
 Cultural lag – time taken for readjustments
SOCIO-CULTURAL ENVIRONMENT IN INDIA VS
GERMANY

• Values

• Language

• Religion

• Individualism Vs Collectivism

• Risk Taking Behaviour

TECHNOLOGICAL ENVIRONMENT

 Indo-German Technology cooperation started with the signing of the

Intergovernmental S&T Cooperation Agreement in 1971 and 1974. There
are more than 150 joint S&T research projects and 70 direct partnerships
between Universities of both countries. India's scientific establishments
have close partnerships with German R&D institutions, including the
Max Planck Society, Fraunhofer Laboratories and the Alexander von
Humboldt Foundation
 Semiconductor and Electronic Manufacturing Services ( EMS)
 Telecommunication
 Automative Industry
IMPACT OF TECHNOLOGICAL ON
BUSINESS:
 Impact on Operating Costs

 Securing Sensitive Information

 Improved Communication Processes

 Increased Employee Productivity

 Broaden Customer Bases

 Collaboration and Outsourcing

 NATURAL ENVIRONMENT
The natural environment or natural world encompasses all living and non-living things occurring
naturally, meaning in this case not artificial.

India
India is one of the oldest civilizations in the world and the seventh largest country with an area of
3287263 sq km. India is a country of natural environment such as rivers, lakes, deserts, forests,
grasslands, mountains, flora, and fauna, etc., have a pivotal role in Indian lifestyle but growing
population of the country is increasing pressure on the environment.
Germany
Germany is a country in Central Europe and is the seventh- largest country by area in the
continent. The territory of Germany covers 357,021 km2.  It stretches from the Alps, across
the North European Plain to the North Sea and the Baltic Sea. It is the second-most populous
country in Europe after Russia. The scenery of nature in Germany ranges from the awe-inspiring
Alpine Foreland, providing a playground for hikers in summer and snowboarders in winter, down
to the spotless stretches of golden sandy beaches at the Baltic Sea.
POINTS OF DIFFERENCE OF NATURAL
ENVIRONMENT
 Forest

 Climate

 Geography

 River

 Natural Resources

 Environmental Issues

 Measures
NATURAL ENVIRONMENT RANKING
IND DEU ( Deutschland)(Germany)
EPI Ranking: 177 EPI Ranking: 13
Env. Performance Index: 30.57 Env. Performance Index: 78.37
Env. Health: 9.32 Env. Health: 88.68
Ecosystem Vitality: 44.74 Ecosystem Vitality: 71.50
2021 Population: 1,393,409,038 2021 Population: 83,900,473
   
INTERNATIONAL ENVIRONMENT
Customs
Regulations
International
International business is an Foreign trade Growing
exchange of goods and services Sectors
that conducts its operations
across national borders,
between two or more countries. Trade Foreign
Partners
INTERNATIONAL Investment

ENVIRONMENT
International business is also
known as Globalization
whereas, a Business Imports and E-commerce
Exports market
Environment is the surrounding
in which the international
companies operate. International Foreign
Trade Policy Investment