Question

What are the advantages to foreign companies in setting up production in India?

Answer 1

The advantages of foreign companies in setting up production in India are:

(i) Foreign companies get cheap labour. Wages that the companies pay to workers in the USA are far higher than what they have to pay to workers in India.

(ii) Additional expenses such as for housing facilities for workers are also cheaper.

(iii) Lower working conditions including lower safety measures are used as ways of cutting costs. Thus, companies can save costs and earn high profits.