impact of MNC's in INDIA advantages and disadvantages

1. IMPACT OF MNC’S
IN INDIA
(SEMINAR)
BY
MD MOHI UDDIN JUNAID
M.COM 3RD SEM (27)

2. A MNC is a organization that owns or controls production
of goods or services in one or more country other than
their home country.
It can also be referred as an
International cooperation.

3. EXAMPLES OF MNC’S
IBM
MICROSOFT
NESTLE
COCA-COLA
PROCTER & GAMBLER

4. The main features of MNCS:-
 Location — MNCs have their headquarters in home countries
and have their operational division spread across foreign
countries to minimize the cost.
 Capital Assets —Major portion of the capital assets of the
parent company is owned by the citizens of the company's
home country.
 Board of Directors — Majority of the members of the Board of
Directors are citizens of the home country.
 MNCs are large-sized corporation and exercise a great degree
of economic dominance.

5. WHY MNC’S ARE ATTRACTIVE TOWARDS
INDIA

6. GROWTH OF MNC’S
India adopted new economic policy in July 1991 was
the liberalization

7. Earlier foreign equity participation was restricted
up to 40% , but now 100% is allow in many
sector.
Continued…
Example
Tea, coffee and rubber sector,
development of township and
advertising sector & many
more.

8. POSITIVE IMPACT OF MNC
(INVESTMENT)

9.  The investment level, employment level, and income level of the host
country increases due to the operation of MNC's.
 The industries of host country get latest technology from foreign
countries through MNC's.
 The host country's business also gets management expertise from MNC's.
 The domestic traders and market intermediaries of the host country gets
Increased business from the operation of MNC's.
 MNCs break protectionalism, curb local monopolies, create competition
among domestic companies and thus enhance their competitiveness.
 Domestic industries can make use of R and 0 outcomes of MNC's.
 The host country can reduce imports and increase exports due to goods
produced by MNC's in the host country. This helps to improve balance of
payment. R. Level of industrial and economic development increases due
to the growth of MNC's in the host country.
Advantages of MNC's for the host country

10. MNCs create opportunities for marketing the products
produced in the home country throughout the world.
They create employment opportunities to the people of
home country both at home and abroad.
It gives a boost to the industrial activities of home
country.
MNCs help to maintain favorable balance of payment
of the home country in the long run.
Home country can also get the benefit of foreign
culture brought by MNCs.
Advantages of MNC's for the home country
MNC's home country.

11. Disadvantages of MNC's for the host country
 MNC's may transfer technology which has become outdated
in the home country.
 As MNC's do not operate within the national autonomy, they
may pose a threat to the economic and political sovereignty
of host countries.
 MNC's may kill the domestic industry by monopolizing the
host country's market.
 In order to make profit, MNCs may use natural resources of
the home country indiscriminately and cause depletion of
the resources.
 A large sums of money flows to foreign countries in terms of
payments towards ;noses, dividends and royalty.

12. Disadvantages of MNC's for the home country
MNC's transfer the capital from the home country to
various host countries causing unfavorable balance
of payment.
MNC's may not create employment opportunities to
the people of home country if it adopts geocentric
approach.
As investments in foreign countries is more
profitable, MNC's may neglect the home countries
industrial and economic development

13. CONCLUSION
At present the world economy is an integral
economy i.e. a world without borders.
The role of MNCs are crucial and their existence
is indispensable
It's functioning need proper regulation so as to
insure protection of national interest , our rich
culture, workers and their working time.
India has to be selective for allowing the foreign
investment and at the same time it must
encourage the indigenous industries.

14. POPULAR INDIAN MNC’S
HIMALAYA TATA CONSULTANCY
SERVICES
LARSEN AND TOUBRO
INFOSYS WIPRO

15. Thanks...!