Study on Indian Private Enterprise Internationalization and Its Implication for Chinese “Going Global” Strategy

OFD (Outward Foreign Direct) investment from developing economies has achieved significant development recently. As the two largest developing countries, both India and China take various measures to encourage local companies to internationalize. Statistics show that multinationals from the two countries are quite different from each other in the ownership, core competency, and entry mode choice. Generally speaking, Indian private enterprises are doing much better than their Chinese counterparts with the advantage on the micro competition; in addition, India government has achieved more in encouraging domestic private companies to invest internationally, from which Chinese companies can benefit. In contrast to China where the state owned enterprises play the leading role in internationalization, while the private companies are weak in most sectors. This fact is kind of surprising because the private companies are usually more efficient than the state owned sector in Chinese domestic economy. This paper will start with the comparison between Indian and Chinese enterprises’ internationalization, then explore the underlying causes for the difference. Based on the above analysis, suggestions for the Chinese private companies “going global” will be formulated.