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MNCs in India

India is the home of a number of multinational companies since the countrys market was liberalized in 1991. Now scenario has changed a lot more enterprises from European union like Britain, France, Netherlands, Italy, Germany, Belgium and Finland have come to India and outsourced their work to this country

India to produce more MNCs

Pricewaterhousecoopers(PwC) gave a report on April 30 2010 on emerging MNCs They said India is expected to produce highest number of MNCs overtaking China as the emerging world largest source. Over 2200 Indian Companies are likely to open operations outside the country over next 15 years

Liberalization & MNCs

In India ,Liberalization measures initiated in 1991 opened up the entry of MNCs. Measures to minimize bureaucratic control were also a part of 1991 policy. Which encouraged MNC operating in India. Up to 51% of direct foreign equity was allowed in high priority areas requiring heavy investment. 100% foreign equity was permitted in high priority industry.

The amendment of Central Govt. ordinance of sept.27,1991, facilitated the entry of new MNCs on the one hand and expansion of the existing ones on the other. The provision restricting the acquisition of transfer of share of MRTP undertakings in both MRTP act and Companies act were deleted. New provisions as in section 108-A to 108-1 were included, facilitating the transfer of shares in MRTP companies and dominant undertakings. MNCs are now permitted to invest in Indias small scale sector.

Factors In Support of MNCs

Positive change in perception of MNCs across the world. Need for the investments. New technological innovations. Connection between FDI and exports. Foreign investments to the borrowings.

Future of MNCs
Increasing international competition. Global consumer awareness. Technological advancement. Reduction in friction among nations. World Business Community coming together. Growing role of private sector inn developing countries.

Regional economic Integration. Increase in the number of bilateral treaties that promote FDI has increased considerably. Privatization programmes.

A Critique of MNCs
Transfer Pricing and sourcing Foreign control over key sectors of economy

Technological Monopoly

Competition and Market Leadership