Technological Environment In India




The success or failure of any business is highly dependent on the type of technology in use, the level of technological developments, the speed with which new technologies are adopted and diffused, the type of technology that are appropriate etc.


For many years in the past, India did not have a favorable attitude towards latest technology to meet foreign standards. The overemphasis on indigenous technology had led to high costs and distorted developments. Further the reservation of certain products exclusively for the small-scale sector promoted several companies including multinationals to resort to such strategies as franchising and contract manufacturing in some of these industries in India. The reservation of products for the small scale sector sometimes comes in the way of adoption of modern technology if it involves capital investment higher than the specified limit.


It is only after the introduction of liberalization and globalization of Indian economy drastic changes have come in the technological standards in India. Prior to the introduction of this policy, funds for imports were also not easily provided. Foreign collaborations and joint ventures were not freely allowed. All these restrictions led unfavorable technological environment in India and lack of good business opportunities. Also very high duty structure made the import of latest technology not only expensive but also almost impossible.


Today, the scenario has changed. Free availability of foreign exchange, welcoming foreign collaborations, FDI, JVs, and setting up of MNCs have led to development of various R & D centers in many firms. Even the development taken place in the infrastructure has also facilitated the technological development.


The current Indian technological development is the outcome of:


  • Ø Technological collaboration
  • Ø Joint Ventures
  • Ø Licensing
  • Ø Merger & Acquisition
  • Ø Increased exports
  • Ø Liberalized imports of foreign made new /second handed machineries
  • ØLiberalized imports.

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