ROLE OF MNC/S IN GROWTH OF INDIAN ECONOMY

 Meaning of MNC
An enterprise operating in several countries but managed from one (home) country. A
multinational corporation (MNC) or multinational enterprise (MNE) is a corporate enterprise
that manages production or delivers services in more than one country.

 History of MNC MNC in India

 First MNC in world First MNC in India Indian MNC
 Multinational corporations affect local and national policies by causing governments
to compete with each other to be attractive to multinational corporation investment in
their country. e.g. - Walmart is an example of a large multinational corporation that
often exerts influence on political processes through lobbying, contributions to
campaigns, and threats of market withdrawal.

 Roles of MNC in India

Multinational corporations play an important role in the world economy through the process
of economic globalization; in other words, the increasing economic interdependence of
national economies across the world through a rapid increase in cross-border movement of
goods, services, technology and capital. e.g. - India is an example of a country that,
economically, has benefitted from globalization — it has seen rapid GDP growth and has a
growing middle class with a rising standard of living.

1. MNCs and Indian Industries MNCs and agriculture MNCs from social and moral
viewpoint
2. MNCs create employment opportunities in the host countries. It helps to create a pool
of managerial talent in the host country.
3. Helps removal of monopoly and improve the quality of domestic made products.
4. Promotes exports and reduce imports by raising domestic productions.
5. Goods are made available at cheaper price due to economies of scale.
6. Job and career opportunities at home and abroad in connection with overseas
operations.
7. Encourages the world unity and all resulting in world harmony
8. The host county is likely to lose its economic sovereignty
9. The host nation may also experience some loss of control over its own economy.
10. Feeling that labour is being exploited by the MNC/ Outsourcing
11. Lost of cultural moorings
12. The problem of Dumping Example – Chinese products are priced low in Indian
market.
13. Profit maximization Increased revenue Large amount of tax collections through
MNC’s Economic health improved Employment increased Foreign relation increased
International network of marketing Concentration in consumer goods Cultural
explosion
14. 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.