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State the characteristics of Indian TNCs operating overseas.

State the characteristics of Indian TNCs operating overseas.

Course: M.Com

1 Answer

An Indian Transnational Corporations (TNCs) means a company incorporated in India and having subsidiary or affiliate in foreign countries. Some big Indian business houses e.g. Birlas, Tatas have subsidiaries and joint ventures abroad. UB Group, Arvind Mills, Ispat Group, Amtrix Corporation, Cipla, Dalmias, ITC etc. have in recent years set up joint ventures in foreign countries. Even public sector enterprises e.g. HMT, BHEL, Engineers India, IRCON have started projects abroad. The main characteristics of Indian Transnational Corporations (TNCs) may be listed as under:

  • Wide Range of Industries: Indian TNCs are involved in a wide range of industries e.g. textiles, engineering, chemicals, pharmaceuticals, paper, glass, consultancy, hotel, computer, software etc. Recently, they have entered new areas like banking, tea blending and packaging, construction, real estate, publishing, travel, and tours etc.
  • Narrow Spread: Many of the Indian TNCs are located in a few developing countries like UAE, Sri Lanka, Kenya, Ethopia, Nigeria, Senegal, Thailand, Indonesia etc.
  • Adopted Technology: The technology of Indian TNCs is largely an adaptation of the technology which they used to import earlier.
  • Skewed Ownership: A broad-based participation of Indian firms in international business is lacking. A few big business houses own most of the Indian TNCs. For instance, Birlas alone control one-fourth share of Indian joint ventures abroad.
  • Joint Ventures: Majority of the Indian TNCs operate in the form of joint ventures with foreign firms.
  • Multiple Objectives: Exploitation of foreign markets has been the primary motive of Indian TNCs. But many of them are also inspired by the goals of export promotion, technology, finance and benefits of large scale operations.

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February 8, 2019