Indian Joint Ventures in SAARC Countries : Problems And Prospects

The Paper deals essentially with the potential of promoting industrial cooperation in the SAARC countries by establishing joint ventures. Such an initiative is based on economic logic which, at the unit level, signifies higher returns on investment in the host country. Of the six SAARC nations, Indian corporates have invested only in two countries namely Nepal and Sri Lanka. Though the size and scale of operation in these countries is small, most Indian corporates hold a majority stake in their ventures. Indian companies consider investing in SAARC an attractive business proposition mainly for factors such as captive domestic market, exports to third countries, geographical proximity, positive legislation, developing raw material supplies and higher profits. Nevertheless, constraints in the form of small market size, inadequate infrastructure, paucity of information and cumbersome government procedures hinder realising of the full potential of the venture.