Unbridled entry of MNCs harms India’s interests

Hon’ble Prime Minister Narendra Modi has given a clarion call to Indian companies to emerge as multinational companies (MNCs). This can be considered consistent with the policy of the country to emerge as the leading industrial nation, having reposed faith in the integration of India with the rest of the world. It is no secret that India has never remained wedded to the tenets of ‘socialism’ and the imminent choice appeared to be emulating capitalist countries like America or Germany.

Going into the antecedents, India was a country that opposed tooth and nail the entry and onslaught of MNCs. India witnessed a big agitation to drive away a ‘soft drink’ (Coca Cola) Company from the land. Now, we moved and travelled a long distance. Nothing appears a bar for opening the doors right from soft-drinks to that of defence.

The present foreign direct investment (FDI) policy of the government (effective from June 07, 2016) is that 100 per cent FDI is permissible in the areas related to agriculture, plantation, mining, petroleum and gas exploration and many other areas of activity. In effect, the doors of economy are open to foreign entry almost in every segment of the economic operation, except those that are considered sensitive for the present.

It is, thus, logical to except reciprocation. The wish of the Prime Minister appears to be that Indian companies too emerge on the world industrial map. He wished that it shall start with the energy sector. There is nothing wrong in wishing the growth of the industry and through it the development of the economy. But what is to be cautioned is the way the western MNCs have been conducting their operations across the globe.

Evidences are plenty in terms of their irresponsible and socially unacceptable practices. The very transfers of technology are under scathing attack. It has been time and again alleged by the developing economies that the MNCs of the West are transferring technology that is outdated or banned in their own host countries and that which is environmentally hazardeous.

Developing economies, being less sensitive, are welcoming leather industries, soft drink units, cement factories and chemical and pharmaceutical outfits on a large scale. Advanced countries are very conscious in the establishment of these units in their own countries. Just two case studies suffice to bring to the fore the impending danger.

One is in the area of les intensive technology of soft drinks production. Coca-Cola Company, having its headquarters in Atlanta, USA, has 58 bottling plants in India in several States. The primary allegation is that the company is extracting large quantities of water from the water bodies located in their vicinity and the same is creating shortage of water for the people living around.

The arithmetic is that it used 3.75 litres of potable water for producing 1.00 litre of coke. The comment is that these soft drink companies like Coca-Cola, Pepsi, etc., are drinking the world dry. The other example pertains to the highly sensitive issue of clinical trials conducted by the pharmaceutical companies on human beings.

The allegation is that these companies are ‘using humans as guinea pigs.’ Usually, laboratory tests are conducted on animals like rabbits, mice, etc. Even to conduct the tests on these animals, one (including colleges, institutions, and universities) has to follow the norms laid under the Prevention of Cruelty to Animals Act, 1960.

The concern is that the companies are not complying with the procedures. It was for these reasons that the Supreme Court in 2013 directed that all trials for new drugs be put on hold. As a way out, outsourcing of this kind of research is gaining momentum mostly in African countries.

In addition, the instances of misuse of anti-trust laws by companies like Microsoft, American Express, Visa Inc, Texaco, 3M, Dee-K Enterprises are quite evident. The cases have gone to the level of Supreme Court of the US Government.

The devastation caused by Union Carbide in Bhopal is the picture that cannot go off the minds of the people of the country. India, being a country, wedded to the principles of Satya, Dharma and Ahimsa, shall promote only such companies that do business following these ‘ethical principles.’ (Writer is Former Vice-Chancellor, Acharya Nagarjuna University)

By Prof K Viyyanna Rao