Old Town White Coffee, India

Old Town White Coffee, India

UBMB3013 International Business Page 3

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.1 India¶s Political Perspectives

Political environment is an important issue to every business transactions. A companywith a better understanding of political environment will lead to greater networking ability andadaptation.

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.1.1 Political System

India is a Sovereign, Secular, Democratic Republic with a Parliamentary form of Government. Besides that, India is also the world's largest democracy country. India¶sgovernment was formed in 1947 after the country gained its independence from the ImperialBritain. Nevertheless, India is governed under the Constitution of India 1950, which it wasmodeled after the United States constitution. Under this constitution, India is a federal republic,meaning it is a representative democracy with power divided between the state and federalgovernment. There are three branches which are stated in constitution of India, including a bicameral legislature, executive branch, and judicial branch (Trade Chakra, 2008).Unlike America, the head of state and the head of government in India are different.The head of state is the President who serves more as a symbolic ceremonial figure, and haslittle power except when in emergency situations. The real executive power is held by thePrime Minister and the Council of Ministers which is stated in Article 74(1) Constitution of India 1949. The current Indian president is Smt. Pratibha Devisingh Patil. The prime minister of India is the head of government, head of the Council of Ministers and the leader of themajority party in parliament. The prime minister leads the executive branch of government in a parliamentary system. The current prime minister of India is the Dr. Manmohan Singh. Thecurrent government of India is in favor of long-term foreign investment.

³ There shall be a Council of Ministers with the Prime Minister at the head to aid and advise the President who shall, in the exercise of his functions, act in accordancewith such advice: Provided that the President may require the council of Ministers toreconsider. '

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Article 74(1) in the constitution of India 1949 -

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