Title of the Module: Business Environment and its Type

Session 1: Introduction to Business Environment

 What is the business?

Meaning and definition:
An organisation or entrepreneurial entity that participates in professional, commercial, or industrial
activity is referred to as a business. Depending on a number of circumstances, there may be
numerous businesses kinds.
Scope of business
1. Vastness
2. Globalisation
3. A Multidisciplinary Area
4. Diversification
5. Environmentalism
6. Competition:
7. Challenges confronting the service providers:

 Business Goals and Objectives

o Goals
1. Profit Motive
2. Entrepreneurship
3. Development of Utility
4. Continuous Economic Activity:

o Objectives
A business objective is typically thought of as the rationale for a company's existence in society.
All company actions shall be guided in the direction specified by the objective.
1. Economic objectives
The following is a discussion of a business's financial goals:
a. Profit-Making
 b. Customer satisfaction
c. Innovation
d. Effective Resource Utilisation
2. Social Objective:
A company's social aims define its responsibilities to various parties, including its customers,
employees, community, and government.
The following are some crucial societal goals:
a. Supply of Quality Goods at Fair Prices - The company must provide clients with the high-
quality goods they want. The goods must be dependable, original (not copies), and secure.
Additionally, the prices for the goods should be fair.
b. Adoption of Fair-Trade Practices - The company should always use ethical business
methods. Antisocial behaviours like hoarding, black marketing, overcharging customers, etc.,
should be avoided. Additionally, it shouldn't engage in dishonest business practices like selling
fake goods or running deceptive advertisements.
c. Employee Well-Being - The firm has a critical duty to advance its employees' welfare. Along
with paying fair salaries, the company also owes its workers decent working conditions, a
canteen, housing, transportation, and other amenities.
d. Community Service - To fulfil their social responsibilities and improve their public image,
contemporary business organisations participate in community service. Running hospitals and
schools, promoting social events, and establishing training facilities for unemployed youth in
underdeveloped areas are all examples of ways to perform community service.
3. Human objective:
Two significant groups, customers and staff, are directly related to a firm. Both of these groups
must believe that the company enterprise treated them with respect as fellow humans.
4. National Objectives:
The nation's aims are addressed through these objectives.
a. Every company must support the following national objectives
b. Attaining self-sufficiency in the production of goods and services
c. Export promotion and import substitution
d. Development of supplementary and small-scale industries
e. The emergence of underdeveloped areas
 f. The country's economic development

 Concept of Business Environment

Business environment refers to those elements of the surrounding environment that have an impact
on a business enterprise's operations and effectiveness.
The business environment, according to Keith Davis, is the culmination of all circumstances,
incidents, and influences that surround and have an impact on it.

 Nature of Business Environment

The nature of the business world is lengthy and complex, dynamic, and fragile. Every businessman
should do a thorough analysis of it to accomplish his aims and ambitions.
The following approaches are easier and more effective at describing the nature of the business
environment:
(i) System Approach: At its core, business is a system that uses a variety of inputs from the
environment, including raw materials, capital, labour, and so on, to generate goods and
services to satisfy customer demands.
(ii) Social Responsibility Approach: Under this strategy, businesses should fulfil their
obligations to a variety of societal groups, including customers, shareholders, employees, the
government, and others.
(iii) Creative Approach: By following this strategy, business shapes the environment by
overcoming obstacles and seizing opportunities as they present themselves. By focusing on
the demands of the populace, the company transforms society.
Following is the nature of the business environment:
1. Complex
2. Interdependence
3. Dynamic
4. Interrelatedness
5. Impact
6. Uncertain
7. Design of Working Plans
8. Arrangement for two-way communication
 Scope of Business Environment
1. Finds business opportunities and threats
2. Contributes to the formulation of plans and policies
3. Offers Valuable Resources
4. Strengthens Performance
5. Help in adapting to rapid change

 Importance of Business Environment

1. Continuous Learning
2. Image Creation
3. Meeting the competition
4. Systematic Method
5. Approach to social responsibility

 Components of Business Environment

The corporate environment is unstable and constantly changing. These external factors are
dynamic and constantly changing, bringing with them opportunities as well as risks or
uncertainties that can make or break a company's future.
(A) Internal environment:
It implies elements within a company that have an impact on how well it runs. These factors are
typically thought of as controllable, meaning that the organisation can change or adjust them.
1. Financial capability
2. Marketing Competency
3. Ability to conduct operations
4. Staff Capability
5. Capability for General Management

(B) External Environment

The elements that present possibilities or hazards to a business make up the external environment.
In a broader sense, the external environment includes a range of elements like the global, domestic,
and local economies. The external environment is made up of a variety of macro-level aspects,
including social changes, demographic considerations, political systems, technology, business
attitudes, energy supplies, raw commodities, and other resources.
An organisation considers those environmental factors that have a direct bearing on its strategic
management process based on how it perceives the relevant environment.
 Session 2: Environmental Scanning and Micro Business Environment

 Meaning of Environmental Scanning

o Environmental scanning is a process that involves obtaining, examining, and disseminating
data for tactical or strategic reasons concerning the settings in which an organisation is
working.
Characteristics
Environmental scanning has the following characteristics:
1. Process of Continuous Analysis
2. Explanatory process
3. Dynamic
4. Holistic Perspective

o Importance of environmental scanning

1. Identification of strengths
2. Finding vulnerabilities
3. Opportunity identification
4. Identifying the threat
5. Successful planning
6. Business survival and growth
7. Helps in resource organisation
8. Operational flexibility
9. Corporate image
10. Employee motivation

 Business Environmental Analysis

Environmental analysis is a strategic strategy for identifying all internal and external factors that
might have an impact on a company's success. Internal components reveal a company's benefits
and drawbacks, whilst exterior components highlight potential and risks.
Trends and key components are taken into consideration throughout the environmental analysis.
Consider interest rates and the potential effects they could have on a firm. These ratings can help
businesses attract more clients.

 Steps in business environmental analysis

The business environmental analysis may be divided into the following four steps:
1. Scanning the environment to detect warning signals.
2. Monitoring specific environmental trends.
3. Forecasting the direction of future environmental changes.
4. Assessing current and future environmental changes for their organisational implications.

 SWOT Analysis
The SWOT Analysis aids in identifying the variables that affect any product's and project's
efficiency and effectiveness. These are described as follows:

o Strengths: A company's key competencies provide it with an advantage over rivals. These are
its strengths. It addresses things like:
a. Favourable financial situation
b. A sizable clientele
c. Distinctive product or a powerful brand name
d. Latest patents or technology
e. Influential marketing and advertising.
f. Cost-benefit
o Weaknesses: The constraints of the firm that prevent it from expanding and may even put it at
 a strategic disadvantage are referred to as weaknesses. To compete effectively, you must make
progress in these areas. This includes:
a. Technology and infrastructure that is out of date.
b. A product has a greater unit price per unit than its rivals.
c. A lack of internal control.
d. Services and goods given are of lower quality.
e. Weak brand perception.
f. It's not in very good financial shape.

o Opportunities: In the context of the business environment, an opportunity is a situation that

is favourable or advantageous to the organisation and that it may take advantage of in order to
obtain a competitive edge. They are:
a. Searching for potential areas of growth while employing technology and talents to
break into new markets
b. Increase consumer base by adding new products to the current product range.
c. Integration of the past and present.
d. Purchasing competing companies.
e. Increased market coverage through partnerships, mergers, and alliances.
o Threats: A threat is a potentially harmful situation that could cause the business to lose money
and damage its overall position and reputation. It includes:
a. A decline in market expansion.
b. A brand-new player in the market.
c. Products that could lower sales should be substituted.
d. Increasing the suppliers' and customers' leverage in negotiations.
e. New legal specifications.
f. Demographic shifts will reduce consumer demand for the firm's products.

 Assessing Risk in A Business Environment

Risk assessment is one of the main components of a risk analysis. The objective of risk analysis, a
multi-step process, is to discover and evaluate all potential risks and issues that could impact the
firm. This is an ongoing process that is updated when necessary. These concepts are interconnected
and flexible on their own.

o Risk assessment steps:

Regardless of the nature of their business or industry, organisations can adhere to the following
five common stages.
Step 1: Determine the risks first
Step 2: Identify who or what might be injured
Step 3: Assess the risks and create control strategies.
Step 4: Summarise your results.
Step 5: Consistently review and revise the risk assessment.
For various industries, risk assessment tools are available, including risk assessment templates.
Companies creating their first risk assessments or upgrading earlier assessments may find them
helpful.

o Qualitative vs quantitative risk

Quantitative or qualitative risk assessments are also possible.
In a quantitative risk assessment, the CRO or CRM gives numbers to the likelihood that an
event will happen and the effect it will have. These numbers can then be used to determine an
event's risk factor, which can then be translated into a monetary value.

 Concept of the Micro Business Environment

The microenvironment is the environment that directly impacts your business. It is connected to
the particular area in which your company conducts business and has the potential to have an
instant effect on all of your operational processes. In other words, it comprises all the factors that
specifically affect your business. They have the ability to have an impact on both the performance
of your company overall and its everyday operations. However, they don't really leave a big
impression.
The organisation's immediate surroundings contain microenvironment components. These are the
initial realms to focus on to develop a strong and trustworthy image of the company in the bigger
or macro-environmental context.
 Significance of Micro Business Environment
Building a corporate empire starts with the microenvironment.
The micro-environmental aspects have a closer relationship with the company than the macro-
environmental factors. The enterprises in a given industry may not all be equally impacted by the
micro pressures. Some of the microelements might be unique to a given company. For instance, a
business that depends on a supplier can have a fully distinct supplier environment from a business
whose supply source is different. The relative success of competing enterprises in a given industry
depends, among other things, on how well they are able to manage the same micro components.

 Elements of Microenvironment
Competing businesses are not seen by competitors if they are little, but if they are enormous, they
will draw their attention. The microenvironments of different companies within an industry might
occasionally be very similar. In this situation, the way these firms react to their microenvironment
may vary because each firm will be striving for greater success.
 Session 3: Macro Business Environment

 Concept of Macro Business Environment

The macro-environment is the way in which the macroeconomic environment in which a firm or
sector operates affects that company's or sector's performance. Macroeconomics looks at an
economy's total level of output, consumption, and prices rather than only concentrating on certain
markets and industries.
The impact of the macro environment on a company depends on how dependent its activities are
on the health of the larger economy. Compared to core staple industries, cyclical sectors are more
affected by the macro environment. Industries that rely extensively on credit to pay consumer
purchases and corporate expenses are significantly impacted by changes in interest rates and the
global financial markets.

o Classification of Macro Environment

The two broad classifications of Macro Environment are:

 Economic Environment: It covers macroeconomic constraints, financial whole, several
stages of the deception phase, commercial arrangement, and other topics. Different big-
surroundings drivers moving the financial approach have a direct impact on trade profit.
The existing business-related environment of certain commerce is extremely complicated
and difficult to comprehend.
 Non-business-related Environment: It consists of administrative processes,
mathematical determinants, permissible basis, friendly order, governmental structure,
mechanical occurring, and other elements. In general, the non-financial environment has a
positive impact on the success of some trades.

o Advantages of Macro Environment

1. The macro-environment study authorises the saving to recognise the potential dangers and
more imply ways to control it.
2. The macro-environment survey helps in calculating the business-related and economic
 necessities of the expected age seeing the large-tangible determinants that will play an
important part.
3. The macro-environment reasoning helps in accomplishing the asked aims by testing the
determinants that influence the big atmosphere.
4. The macro-environment reasoning climaxes the substances and defects of frugality all at
once as the impact of the large determinants may be extreme.
o Disadvantages of Macro Environment
1. Data on the macro material determinants are not possible surely and need to be expected
to be composed of miscellaneous beginnings.
2. There may be distinctnesses in the rule that applies to a place or group of two together
nations. Hence what is jolting individual countries concede possibility not be that jolting
the added country.
3. The political establishment is the individual of ultimate main determinants to have athletic
environments in the frugality as all the high-ranking determinations are captured apiece
governmental commanders.
In the lack of governmental cohesion, it is hopefully troublesome for some countries to flourish
from now on as the governmental will is not skilled to boost frugality before.

 Significance of Macro Business Environment

1. The macro-environment analysis helps the economy to detect possible dangers and provides
management strategies.
2. The macro-environment survey assists in budgeting the economic and financial requirements
for the next years while taking into account the macro-environmental aspects that will be
important.
3. The macro-environment analysis aids in achieving the intended goals by investigating the
elements that influence the macro environment.
4. Because the influence of macro variables can be dramatic, the macro-environment study
 exposes the strengths and weaknesses of the economy as a whole.
A crucial component of strategic management is macro-environment analysis.
1. Gross domestic product
The gross domestic product (GDP) measures a country's output and service and good
production (GDP).
2. Inflation
The rate at which the prices of goods and services in an economy are growing is known as
inflation. The effects of inflation, which raises the cost of necessities like food, can be
detrimental to society.
3. Employment
The Bureau of Labor Statistics calculates the number of people employed and publishes a
monthly report on corporate payrolls and the unemployment rate.

4. Public Spending
The term "public spending" refers to funds used by the government through any of its
organizations or agencies. It also goes by the name "public expenditure" and often refers to all
forms of public expenditures.
5. Monetary Policy
The monetary policy actions of the Reserve bank of India (RBI) are a significant element
affecting the macro environment in the country.y Interest rates and credit availability are often
at the focus of monetary policy measures.
6. Economic Policy
Fiscal policy refers to the combined spending, borrowing, and taxes practices of the
government. High tax rates could deter people and businesses from working, saving, and
investing.

 Constituents/ Factors Affecting Macro Business Environment

 Session 4: Economic Environment and Planning

 Role of Economic Factors in Business

1. Interest rates
An interest rate, which is expressed as a percentage, describes how much a lender charges the
borrower to access funds. By determining the federal fund rate, the Federal Reserve has an impact
on interest rates. The interest rate that a bank must charge another bank in order to borrow money
is known as the federal fund rate.
High-interest rates have an effect on small firms because they almost definitely have limited cash
flow. Small business owners must set aside more cash in order to repay loans and debt, which
reduces the amount of revenue the enterprise can produce. High rates may lower asset values and
make cash sales of those assets more challenging.
2. Inflation
Inflation is the term used to describe how quickly prices for goods and services are rising in a
given economy. Inflation's impacts, which increase the price of essentials like food, can be harmful
to society.
Inflation can affect almost every commodity or service, including necessities like housing, food,
healthcare, and utilities as well as wants like jewellery, cosmetics, and cars. It can also affect wants
like these as well. Once inflation has spread to every sector of an economy, businesses and
consumers are both worried about the prospect of further inflation.
a) Cost-push inflation
Cost-push inflation is the increase in prices brought on by growing production costs, such as
labour and raw materials. While the demand for goods does not change, there is a decrease in
supply as a result of increasing manufacturing costs. As a result of the increasing production
expenses, consumers must pay more for the final items.
Rising commodity prices are one sign of probable cost-push inflation because oil and metals
are crucial industrial inputs. For instance, companies that use copper in the manufacture of
 their goods may increase the cost of those goods if copper prices rise.
3. Demands and supply
The retail goods that consumers purchase, ranging from basics like food and clothing to pleasures
like jewellery and technology, are all included in the consumer goods industry. Depending on a
variety of economic variables, consumer expenditure on more optional items like technology and
cars varies dramatically. Although the overall demand for food is unlikely to change drastically,
the particular meals that customers buy can vary greatly depending on the state of the economy.
The economic factors that have the strongest effects on consumer demand are employment, wages,
price/inflation, interest rates, and consumer confidence.
4. Wages
The majority of people's income comes from wages. Wages and salaries are considered to be the
main source of income for the majority of people who are actively employed by labourers, clerks,
managers, and employees in general.
5. Infrastructure
The facilities, activities, and services that support the operation and expansion of other economic
sectors are referred to as economic infrastructure. These resources, activities, and services
contribute to raising the economy's overall productivity. Additionally, they are crucial to the
efficient operation of all economic sectors.
Infrastructures are also such fundamental necessities as roads, railways, ships, airports,
communication, etc. They also cover issues with banking, research, technology, health, and other
public services. The development and rapid pace of the economy are impossible without the
establishment and existence of economic infrastructures.
6. Exchanges rates
The rate at which one currency will be exchanged for another determines trade and the flow of
funds between nations is known as the exchange rate. Both the value of the local currency and the
value of the reserve currency have an effect on exchange rates.
o Factors Affecting Exchange Rates
 Variables in Inflation
 Interest rate differences
 Industrial Policy of India
It is the government intervention to affect the industry's ownership, structure, and performance. It
takes the form of legislation, the payment of subsidies, or other forms of financial support. It
consists of protocols, guiding concepts (i.e., the economic philosophy), policies, rules and
regulations, rewards and penalties, the tariff policy, the labour policy, the government's stance on
foreign investment, etc.
o Objectives
The government of India's industrial policy has the following primary goals:
a. To Maintain Sustained Productivity Growth.
b. To Increase Meaningful Employment.
c. To Achieve Optimal Human Resource Utilisation, To Achieve International
Competitiveness.
d. To Make India A Significant partner and player in the international arena. India's
industrial policies since independence.
o Industrial Policy Resolution, 1948: It outlined the general framework of the strategy
outlining the State's role in industrial development as an entrepreneur and an authority.
It was made very obvious that India would use a mixed economic model.
It divided the industries into four categories:
 The monopoly of the federal government only (arms and ammunition, production of atomic
energy and management of railways)
 only the state undertakes new initiatives (coal, iron and steel, aircraft manufacturing,
shipbuilding, telegraph, telephone etc.)
 Industries that the government will control (Industries of basic importance)
 open to cooperatives, individuals, and private businesses (remaining)
o Industrial policy resolution, 1956: The Industrial Policy Basic Framework was established
under this policy.
The Economic Constitution of India is another name for this policy.
Three sectors make up the classification.
 Schedule A, which deals with the public sector (17 Industries).
 Schedule B, which deals with Public and private sectors(12 Industries).
 Schedule C, which deals with Private Industries exclusively
For the public sector, small-scale industry, and foreign investment, provisions are included. It
was occasionally changed by statements from 1973, 1977, and 1980 in order to address fresh
challenges.
o Industrial Policy statement, 1977: The 1956 policy was expanded upon by this one.
The key factors were providing jobs for the underprivileged and lowering wealth concentration.
 This approach placed a strong emphasis on decentralisation.
 It granted small-scale industries precedence.
 A new unit dubbed "Tiny Unit" was produced.
 This law placed limitations on multinational corporations (MNC).
o Industrial Policy Statement, 1980: The Industrial Policy Statement of 1980 spoke about the
necessity of fostering domestic market competitiveness, modernisation, selective
liberalisation, and technological advancement.
 It allowed for the automatic increase in capacity and the liberalisation of licensing.
 The MRTP Act (Monopolies Restrictive Trade Practices) and FERA Act (Foreign
Exchange Regulation Act, 1973) were introduced as a result of this approach.
 The goal was to liberalise the industrial sector in order to raise industrial productivity
and competitiveness.
 The strategy created the groundwork for a more aggressive export strategy and
promoted foreign investment in high-tech industries.
o New industrial policy, 1991: The primary goals of the New Industrial Policy of 1991 were to
 promote efficiency and provide facilities for market forces.
The bigger roles were played by.
 L – Liberalisation (Reduction of government control)
 P – Privatisation (Increasing the role & scope of the private sector)
 G – Globalisation (Integration of the Indian economy with the world economy)
 Old domestic businesses must compete with new domestic businesses, MNCs, and
imported goods as a result of LPG.
 To increase productivity and provide access to superior technology, the government
permitted domestic businesses to import it. In a few areas, the cap on foreign direct
investment was raised from 40% to 51%.

 Introduction to Companies Act 2013

The Lok Sabha approved the 2019 Companies (Amendment) Bill. The 2013 Companies Act saw
some revisions as a result. It modifies the legislation governing Indian corporations.
The Companies Act of 2013 governs the establishment and operation of corporations and
companies in India. Following independence, the country's corporate enterprises were governed
by the first Companies Act, which was passed in 1956. The suggestions of the Bhabha Committee
served as the foundation for the 1956 Act. This Act has undergone numerous amendments, the
most recent of which was in 2013. India was the first nation to enact legislation requiring corporate
social responsibility (CSR) spending through Section 135 of the 2013 Act.
o Features of act:
 The idea of "Dormant Companies" has been introduced. Companies that are dormant are
ones that have not conducted business for two years in a row.
 The National Company Law Tribunal was established. In India, it is a quasi-judicial
authority that makes decisions on business-related matters. It took over for the Company
Law Board.
 Instead of requiring government clearance, it allows for self-regulation of disclosures and
 openness.
 Electronic records must be kept up to date.
 For businesses with net assets of up to Rs. 1 crore, official liquidators have adjudicatory
authority.
 Mergers and amalgamations now go through a quicker, easier process.
 This Act permits cross-border mergers (foreign firms joining forces with Indian firms or
vice versa), but only with the Reserve Bank of India's consent.
 One-person businesses have been conceptualised. This is a brand-new class of private
corporation that might only have one shareholder and director. A private business had to
have at least two shareholders and two directors under the 1956 Act.
 It has been planned to establish the National Financial Reporting Authority (NFRA). It
oversees the work of auditors as well as the development and application of accounting
and auditing standards.

 Growth Strategy and Planning

A growth strategy is a comprehensive action plan created to aid in your company's growth, which
includes boosting sales and revenue over a predetermined time frame. Specific, quantifiable, and
improvement-oriented growth methods are necessary for success.
o Steps for growth strategy and planning
1. Establish your value proposition
2. Define your target market
3. Recognise the sources of your existing income
4. Take a look at your rivals
5. Pick a potential growth area
6. Set objectives
7. Make a strategy
8. Identify the conditions for growth
 NITI Ayog Roles and Function
India's Planning Commission managed the five-year plan for the nation's economic growth.
However, the 65-year-old Planning Commission was disbanded in 2014, and its place was taken
by the think tank NITI Aayog (National Institution for Transforming India).
The National Institution for Transforming India (NITI Aayog) is a government-sponsored think
tank that was established on January 1st, 2015, as a commission to provide recommendations to
the governments at the national and state levels with pertinent strategic, directional, and technical
advice regarding a range of important process/policy development process.
The Prime Minister of India heads the Aayog as the Ex-officio Chairperson. Currently, Rajiv
Kumar is the vice chairperson of the NITI aayog.
In addition, it has a few part-time and full-time members, as well as four Union Ministers who
serve as ex-officio members. All State Chief Ministers and Lt. Governors of the Union Territories
serve on its governing council.
o Roles of NITI Aayog
 To promote cooperative federalism so that the Center and the various States can get a
national agenda.
 It advises the governments at the Center and the States on strategic policy issues because
it functions as a think tank for the government or as a dynamo for direction and policy. It
also covers economic matters with global and national significance.
 The Monitoring and Evaluation (M & E) efforts in India are guided by the Aayog.
Additionally, it emphasises the value of moral behaviour, high standards for quality, and
adequate institutional controls.
 NITI Aayog denotes a group of individuals who the government has charged with
developing and enforcing policies pertaining to India's transformation.
 This commission provides advice to the government on social and economic matters.
 This body actively oversees and assesses the execution of the government's initiatives and
 programs.
o Functions of NITI Aayog:
1. Cooperative and Competitive Federalism
2. Shared National Agenda
3. State’s Best Friend at the Centre
4. Decentralised Planning
5. Vision & Scenario Planning
6. Network of Expertise
7. Knowledge and Innovation hub
8. Harmonisation
9. Conflict Resolution
10. Coordinating interface with the World
11. Internal Consultancy
12. Capacity building
13. Monitoring and Evaluation

 MRTP Act
Monopolistic trading practices refer to market-dominating trade tactics where a company or an
oligopolistic corporation made up of three companies achieves a dominant position. They can then
exert control over the market by stifling rivalry or setting limits on prices and production.
Regardless of market share, restrictive trade practices are carried out by a group of two or more
organisations working together to avoid competition in the market. These actions are considered
to be against the interests of the public.
The MRTP act was the first significant piece of law to regulate unrestricted and free commerce.
This law aimed to distinguish between monopolistic and restrictive business practices.
The following is a list of the MRTP Act's original goals:
1. The law ensured that a small number of businesses did not end up with all the economic power.
2. To ensure monopolies are controlled, monopolistic and limiting commercial practices must be
controlled.
Following its final revision in 1991, the MRTP act's goals were as follows:
MTP: Monopolistic Trade Practices Prohibited
RTP - Restrictive Trade Practices are Prohibited
UTP - Unfair Trade Practices Prohibited.

 Competition Act
Commercial competition in India is governed by the Competition Act, 2002. The previous
Monopolies and Restrictive Trade Practices Act 1969 was replaced by it.
The Competition Act seeks to limit actions that will harm competition in India.
Characteristics: The Competition Act has the following characteristics:
1. Anti-Agreement
2. Abuse of dominating position
3. Combinations
4. Competition Commission of India
 FERA
The exchange of one currency for another is referred to as the foreign exchange. For instance, USD
can be exchanged for INR or EUR. The Foreign Exchange Market, or Forex for short, is the market
that facilitates foreign exchange.
The Foreign Exchange Regulation Act was created with the intention of regulating foreign
exchange in order to protect foreign reserves, which were at the time considered a valuable
resources. The goal was to secure and conserve the nation's foreign exchange while regulating
international payments, foreign exchange transactions, and security.
Features of FERA: The following list includes some of the FERA's key components:
o A corporation or person must have RBI authorisation before engaging in foreign exchange
business.
 o The RBI has the authority to grant permission to dealers to conduct foreign exchange
transactions and, in certain circumstances, to revoke that permission.
o The RBI must grant permission to money changers, who are charged with converting
currencies, in order for them to do so at the predetermined rates (by RBI)
o No one else outside authorised dealers is allowed to engage in foreign exchange
transactions.
o If that is not practicable, the foreign money must be sold to another dealer within 30 days.
The foreign currency must only be used for the purposes for which it was purchased.
o No one is allowed to do any transactions with a partner who is not an Indian resident
without the RBI's consent.
o There shall be no conversations with respect to any bills of exchange when the right to
obtain payment is outside of India.
o No one is allowed to make any credits to anyone else's account outside of India.
o No person may move foreign currency beyond of India's borders unless they are authorised
to do so by the Reserve Bank of India (RBI).

 FEMA
The former Foreign Exchange Regulation Act was repealed in 1999 and was replaced by the
Foreign Exchange Management Act. It was implemented against a backdrop of numerous
economic liberalisation policies affecting India. The act's principal goals were to promote
international trade and facilitate global growth.
Features of FEMA: The following are some of the main FEMA features:
o The Act gave authorised people the ability to facilitate currency trading.
o Additionally, it gave RBI the authority to impose limits, and they were required to regularly
give RBI feedback regarding trading.
o The Act permitted Indian citizens to engage in foreign exchange trading and to possess real
estate outside of India.
o However, this was only valid if the asset was obtained during travels to the relevant nation
or if the requesting party inherited the asset.
o The FEMA Act also considered remittances and foreign exchange transactions, including
those involving residents of India or the exchange of foreign currency for travel purposes
in India.
o The Act also contained a number of rules and limitations relating to things like the
authentication of necessary documents and current account transactions.