Class Assignment 1 for GEB Students

The class assignment for GEB course relates to the case study done in the last class of GEB. As part of the class assignment 1 for this course each student group has to carry out following activities.

1. Identify another company in India who had invested in the country coming frm abroad and pulled out due to Geopolitical reasons.

2. Identify the reasons of such pull out from India. List out the circumstances leading to such a drastic decision.

3. Suggest what can be done to stop such pull outs at the Govt. Level in India.

 

Prepare a write up of around 5000 words explaining above points. Write down your group name and send me the soft copy by mail.

This assignment is of 10 marks and carry 5% overall weightage. Good luck.

Class Assignment 1 for the ITPD course

Students must do this assignment to understand the practical ways of dealing with an export order.

Under this assignment each group of student has to complete following tasks

1. Identify a company exporting any of its products. Write a small write up on the company and their products for exports.

2. Identify aq particular order executed by the company

3. Find some details of the buyer like – country of destination, type of buyer (e.g. end user or reseller)

4. Find some details of contract conditions – Like payment terms, delivery terms, mode of shipment (by sea or by air), delivery time etc.

5. Find some details of L/C conditions (preferably a copy of the L/C)

6. Find out the name of issuing bank, advising bank, bank charges

7. Find out how much time was required for manufacturing the goods.

8. Find out what kind of packing was required

9. Find out whether there was a third party inspection required by the buyer? Which company did the inspection

10. List the documents prepared forĀ  this shipment.

11. Attach a copy of each of the document used for this shipment.

12. Find out how long did it take to realize the payment for the order.

Write down each of the above information in word document and send the same to me giving names of the group members. (send by email). Attach all the documents you have gathered.

The above assignment carries 10 marks and will be given 5% weightage in overall marks. Each group must work on a seperate company and different order.

What prompted Cogentrix to pull out from India?

It happened during the post reforms period. A model power plant for Indian economy as a showcase to attract investments in power sector could never see the light of the day. After spending thousands of crores of rupees and several years which saw three governments changing in India, one of the most respected US power company – Cogentrix pulled out of India leaving behind a trail of wastage of money, equipments and hopes. What prompted this model power investor to pull out of the country when India was shining and another power company, another failure was at the start of making investments in the power sector in India. Was it changing shapes of power purchase agreements with state electricity boards, or slow pace of govt clearances, or a trail of PIL against the company or just the cross cultural difference behind the costly decision.

These questions were discussed in the class today of GEB course at I.T.S, Ghaziabad. Students came out with their own explanations of the strange phenomenon. The risks involved in any international long term project are common and most companies are able to manage such risks. So it is not common for a company like Coegntrix which had a blanket assurance from Indian Government for a guaranteed 16 % return on investment, preferential treatment in policy making and being a fast track project.

An interesting explanation was related to geopolitical reasons for such a decision. When Cogentrix entered India the country required at least 100 Billion USD investments in the power sector to eventually add 1 L MW power to the country. Having come out of doom after 1991 financial crisis and post reforms, India never had this kind of its own money. So policy tilted towards the foreign investors especially from US where it seemed that US is finally was able to add India in its 3rd polar geostrategy to ensure a cold war free world. It was similar to giving India the same importance as China. Therefore geopolitical advantage was definitely in favor of India. With political power fast changing in India and emergence of Hindutva pride and US opposing rhetoric, Pokhran test ensured all such geopolitical advantages could not be made a reality in investments, US attention to Indian economy and ensured US look back to China as a more stable political model where long term investments could be safely made.

Cogentirx found itself at the midst of failed expectations from Indian political parties which were riding on a rising India post reforms and there did not seem to be anything amiss with the financial health of the country similar to what happened in 1990.

India with a full stomach could shout at the world powers and bully its neighbors for no apparent reasons. Thereby bullying any long term investments from the west.
These geopolitical changes could explain the pull out of Cogentirx from the Indian power scene, where company did not look for any future opportunities coming any soon.