International environment is very significant for the firms engaged imports and exports and also for the firms having manufacturing operations other countries. International environment includes trade policies of foreign government, international organizations such as World Trade Organization (WTO), International Monetary Fund (IMF), World Bank, etc., and Multination Corporations (MNCs).

Several industrial policy measures taken by the Government have encouraged the process of globalization, i.e., increased integration of India economy with the international markets. Because of localization, there has been a tremendous impact of international environment on business in India. A large number of foreign multinationals have opened their subsidiaries in India and have entered into collaboration agreements with the Indian companies. This has increased competition into eh Indian market. Small and medium enterprises have been experiencing difficulty in competing with the foreign multinational corporations. Because of liberalized import policy, several business firms in India have imported quality raw material and latest technology to improve the competitive position. Leading abroad and also stated joint ventures with local businessmen of foreign countries. This has further encouraged the process of globalization of the Indian economy.

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