Challenges Faced by Foreign Construction Companies in India

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Modular Construction In India
Name of Student
Institute Affiliation

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CHALLENGES FACED BY FOREIGN CONSTRUCTION COMPANIES IN INDIA.
EXECUTIVE SUMMARY
India’s fast-growing population has become darling of foreign investors from all aspects of
business. A large number of natives provide ready market for various commodities that are
essential in life since growth in population size means that there exist a corresponding demand
for necessary infrastructures, roads, hospital, school, and housing units for settling. For these
reasons made India a hot cake as far as construction activities are concerned. However as
construction investments in India seem lucrative as it is but that it doesn’t guarantee smooth
operation in India without experiencing challenges that do associate with this kind of investment.
Just like any other developing countries population and economic growth brings about the high
demand for construction of new infrastructures to meet the demands of these rapidly growing
populations.
The construction industry is the third-largest sector that contributes handsomely to India’s Gross
Domestic Product accompanied with bounties of economic potential towards country’s economy.
Over the past decade unemployment challenge has reduced to great extent, foreign investor in
India develop construction firms where the majority of human laborers to assist in earthwork
operations, thus creating employment to the natives.

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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................2
EVOLUTION OF MODULAR CONSTRUCTION.......................................................................4
CHALLENGES FACING FOREIGN CONTRACTORS IN INDIA.............................................5
Regulatory challenges..............................................................................................................5
Cultural challenges..................................................................................................................7
Management of innovation challenges....................................................................................7
Inconsistency in productivity...................................................................................................8
Human resource management..................................................................................................8
Nature of the work...................................................................................................................9
Efficiency and Sustainability.................................................................................................11
Inflated cost of materials.......................................................................................................11
ADVANTAGES OF FOREIGN CONTRACTORS IN INDIA....................................................12
DISADVANTAGES OF FOREIGN CONTRACTORS INDIA..................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

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INTRODUCTION
International construction involves commissioning of projects in such that a construction
company from given country performs and discharge their construction works and skills in
another country apart from their country of origin. Personnel who discharge these services are
known as foreign contractors. This is often associated with some complexity in climate and
construction variance caused by stiff global price competition, advancements of technologies,
and varying industries with employment legislation (Vilaitramani & Hirani, 2014). The country’s
overwhelming population with high demand for service delivery has encouraged high number of
foreign direct investments in almost all fields, construction industry not left aside. In the recent
year India has become the most preferred investment area by foreign investors since the national
government reviewed its interrelation and economic legislations allowing investors and
contractors from other countries to conduct their activities freely in India (Cao et al., 2017).
The construction industry is an essential element of the economy with great significance and
impact on the surrounding environment. Construction industries are among the most significant
consumers of energy, water and natural materiel in their operations for substantive projects.
Rapid population growth and economic rise in the country requires sustaining plans set to
mitigate and address the demand for habitable structures where these growing population will be
able to access excellent housing services. The government has strategic plans and visions to
provide sustainable infrastructural developments in line with achieving its mandate as authority
ensuring that her natives have access to basic infrastructural amenities for better service delivery.
Construction of mega layouts brings together various contractors and stakeholders on board both
locally and internationally. Such projects a time becomes complicated and demands the country
or client to source contractors with vast experience from other countries to implement such

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projects. When contractor come together from different countries for such project, each comes
with different codes and norms of operation and this fuels misunderstanding between these
contractors. In such situations, it’s the construction managers, and site engineers are faced with
wide range of problems and challenges. When fundamental functions of project engineer and
construction managers are compromised in any way before or during construction process, this
strolls the operations thus causing delays and an unparalleled flow of operations within site.
In India construction industry is buoyed with a lot of growth and expansion, there exists a
significant gap in the actualization of these great infrastructural developments since the country
has limited specialists in critical areas that would help achieve this objective. The key areas that
need outsourcing of experts are prefabrication of these construction processes, skill delivery,
modulation, and data transparency and professional skill delivery system. As one of the largest
country with numerous potentials in development, India has wondrous attraction to most
prominent foreign business ventures ranging from business fair investments to industrial
investors. However these foreign investors most so in construction industries are slapped with
increasing challenges that affect their operation in terms of service delivery to their contacted
clients. Amidst these challenges are more of anti-globalization issues from the natives who don’t
fully allow perfect integrations of operations. Basing an argument on the available reviews of
existing literature, this paper highlights some of the major challenges facing foreign construction
companies in Indian construction industry.

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EVOLUTION OF MODULAR CONSTRUCTION
The use of prefabricated structures, mostly in domestic construction dates back to over a
hundred years ago. These structures can be prefabricated, and that’s why they are mostly referred
to as mobile structures. A remarkable event occurred in the late 20th century that informed the
invention and evolution of these prefabricated structures, known as modular structures (Esa et
al., 2017).
The construction industry has undergone numerous technological advancements in the past 10
years. These changes are evident in the introduction of automated machines that has relived
human laborers from carrying heavy loads by themselves as they move in construction site, more
advanced construction tools and equipment, automating most of the constructional works.
Implementation of modular structures in construction industry has enhanced construction of
more advanced structures of a kind. The aspect of modular construction began in 1908 when
Sears Roebuck and Company based in United States stated commercialization of home kits that
contained all materials needed to build a home. These items included Sears’s catalogs containing
more than 45 modular home styles having comprehensive description of more than 3200
different modular pieces. Availability of catalog facilitated the spread of this new technique all
over the world between 1908 to 1940. Process of obtaining these kits was made more
straightforward in that clients would browse through the catalog and then make a request to
Roebuck Company, which send the ordered items via rail. This demand of these modular houses
increased tremendously after Second world war; they became famous, solders from war returned
home looking to settle, have a family and acquire a house. This escalated the demand more than
what was available; people once again started investing in modular construction to meet the