PEST Analysis: India Political Factors India is the biggest democracy in the World.

. The government type is federal republic. Based on English common law; judicial review of legislative acts; accepts compulsory ICJ jurisdiction with reservations; separate personal law codes apply to Muslims, Christians, and Hindus.The political Situation in the country is more or less stable. For most of its democratic history, the federal Government of India has been led by the Indian National Congress (INC). State politics have been dominated by several national parties including the INC, the BharatiyaJanata Party (BJP), the Communist Party of India (CPI), and various regional parties. In the 2004 Indian elections, the INC won the largest number of LokSabha seats and formed a government with a coalition called the United Progressive Alliance (UPA), supported by various left-leaning parties and members opposed to the BJP. Overall India currently has a coalition led government and both major political parties the UPA and BJP, whichever comes in power.
Economic Factors

The Indian economy is the world's tenth largest economy by nominal GDP and fourth largest economy by purchasing power parityThe economic factors in India are improving
continuously. The GDP (Purchasing Power Parity) is estimated at 2.965 trillion U.S. dollars in the year 2007. The GDP- per Capita (PPP) was 2700 U.S. dollars as estimated in 2007. The GDP- real growth rate in 2007 was 8.7%. India has the third highest GDP in terms of purchasing power parity just ahead Japan and behind U.S. and China. Foreign direct investment rose in the fiscal year ended March 31 2007 to about $16 billion from just $5.5 billion a year earlier. There is a continuous growth in per capita income; Indias per capita income is expected to reach 1000 dollars by the end of 2007-08 from 797 dollars in 2006-07. This will lead to higher buying power in the Hands of the Indian consumers. Social - India is the second most populous nation in the world with an approximate population of over 1.1billion people. This population is divided in the following age structure: 0-14 years 31.8%, 15-64 years 63.1% and 65 years and above 5.1%. There has also been a continuous increase in the consumption of beer in India. With an increase in the purchasing power the Indian consumer which preferred local hard liquor which is far cheaper is now able to get a taste of the relatively expensive beer market. The social trend toward beer consumption is changing and India has seen an increase of 90% beer consumption from the year 2002- 2007. This increase is far greater than the increase in the BRIC nations of Brazil (20 per cent), Russia (50 per cent) and China (almost 60 per cent). Thus this shows a positive trend for beer industries in India. Technology

The Indian Information Technology industry accounts for a 5.19% of the country's GDP and export earnings as of 2009, while providing employment to a significant number of its tertiary sector workforce. More than 2.5 million people are employed in the sector either directly or indirectly, making it one of the biggest job creators in India and a mainstay of the national economy. Each year India produces roughly 500,000 engineers in the country,[5][6] out of them only 25% to 30% possessed both technical competency and English language skills, although 12% of India's population can speak in English.[7] India developed a number of

outsourcing companies specializing in customer support via Internet or telephone connections. By 2009, India also has a total of 37,160,000 telephone lines in use,[8] a total of 506,040,000 mobile phone connections,[9] a total of 81,000,000 Internet users comprising 7.0% of the country's population,[10] and 7,570,000 people in the country have access to broadband Internet making it the 12th largest country in the world in terms of broadband Internet users.[11] Total fixed-line and wireless subscribers reached 543.20 million as of November, 2009.[12]
The Indian beer Industry is heating up with a lot of foreign players entering the Indian market. The technological knowhow and expertise will also enter the Indian market with an increase in competition. For example beer brewing technology major Ziemann has entered India and has set up manufacturing plant in India. Ziemann Group, based in Ludwigsburg near Stuttgart in Germany, has founded Ziemann India. It will start production in 2008. This will help bring in technological knowhow and increase the production of beer. SABMiller has just placed an order for the design and construction of two turnkey plants in India to Ziemann. The new plants are planned for Sonipat in Haryana and for another location near Bangalore. Both breweries will have an annual capacity of 1 milllion hectoliters each in the beginning and might be extended later. Thus with European technology entering the Indian beer market increased production and lowering cost of production could play a major role in the Indian beer market. The OLI Model: Ownership: The Indian market provides good ownership opportunities for Inbev India International private limited. The Government policies on FDI are relaxing and companies like Carlsberg has also invested in breweries in India. Also cost of manufacturing and brewing beer in India is much cheaper. The cost of raw material and labor in India is cheap thus giving Inbev India a good chance of reducing cost of production. The fact that European companies are setting up plants in India to manufacture brewing technology means that in the future Inbev could have ownership of these technologies at a much cheaper rate as compared to when bought in other markets. Location: There are a lot of location specific advantages for Inbev India International Private Limited. The Indian beer Industry is all set to heat up with the Indian markets compound annual growth rate (CAGR) of 6.7% from 2002 to 2006. The beer market volume is set to rise to 1155 million liters by 2011 an increase of 37.4% from 2006. North India is enjoying beer like never before. During the first quarter of 2006, nearly 5 million cases of beer were sold in Punjab and Haryana as against 600,000 cases in Q1 of 2005-06. This was the case because the government has revised its policy in these states and there is an improvement in the distribution channels in these areas. India is also expected to become the second largest beer market in Asia by 2020 just after China. Thus all these factors along with India having neighboring countries like Nepal and Sri Lanka, where beer could be exported through India gives Inbev India a good Location advantage. Internalization: Inbev India International Private Limited would want to have internalization because over a period of time it would lose out on a competitive edge in the region if it just sticks to exporting and not FDI investment. As other firms would come in and develop their infrastructure and distribution channel, thus able to produce at with low costs. India also is a huge potential market as mentioned earlier and Inbev would not want to lose out on the opportunity it can provide. Also since there is a lot of red tapism and contractual problems while exporting etc. It would be better to be in India rather than export.

Transportation
Railways The Railways in India provide the principal mode of tranportation for freight and passengers. It brings together people from the farthest corners of the country and makes possible the conduct of business, sightseeing, pilgrimage and education.

Roads India has one of the largest road networks in the world, aggregating to about 33 lakh kilometers at present. The country's road network consists of National High-ways, State Highways, major/other district roads and villages/rural roads.' Shipping plays an important role in the transport sector of India's economy. Approximately, 90 percent of the country's trade by volume (70 per cent in terms of value) is moved by sea. India has the largest merchant shipping fleet among the developing countries and ranks 20th amongst the countries with the largest cargo carrying fleet with 8.83 million GT as on 01.06.2008 and the average of the fleet being 18 years.

Ports The coastline of India is dotted with 12 Major Ports and about 200 Non-major Ports. The Major Ports are under the purview of the central while the Non-major Ports come under the judrisdiction of the respective State Governments. >>more information on this