The Lost World | Value Research We Indians have a love-hate relationship with foreign companies. In this globalised world, we simply cannot avoid them and at the same time, we are not entirely happy about their presence in our midst
Econology

The Lost World

We Indians have a love-hate relationship with foreign companies. In this globalised world, we simply cannot avoid them and at the same time, we are not entirely happy about their presence in our midst

We Indians have a love-hate relationship with foreign companies, usually known as multinationals. We know that in this globalised world, we simply cannot avoid them and at the same time, we are not entirely happy about their presence in our midst.

So, from time to time, we crack the whip and ask them to behave. But they know they are here to stay and take it all in their stride. Fifteen years ago or so, before the economy was thrown open, things were different. Indian companies, whether in soft drinks or automobiles, were sitting pretty. They had a nice monopoly business going and since they never had to compete with foreign companies, they were clueless about their impact.

Ramesh Chauhan of Parle, who had built a profitable soft drink business from scratch, was initially rattled when news came that Coca-Cola had received a license to operate in India. Since I was all for Swadeshi, he believed that I might be of some use. So he came to see me.

I asked him if he knew Coca-Cola people. No, he said, he didn't. I told him that I knew some of them and had visited their offices in Atlanta. I told him that Coca-Cola's entry would be followed by Pepsi's-- or was it the other way round-- and Parle would have to take on two giant multinationals in a small market. Did he have the capacity to do that? A few weeks later, I heard that Parle had sold out to Coca-Cola for a hundred crore, which was a great deal of money then. That was the end of the nascent soft drink industry in India for it is either Coke or Pepsi now and there is no other choice for the consumer.

Things were a little different with the auto industry, but not all that different. When Maruti was taken over by Suzuki, I wrote in my column that companies like Premier Automobiles would soon be on their way out, just as Coke had replaced Parle. For Suzuki would be followed by other foreign auto companies and they would sweep the market.

Not so, wrote Vinod Doshi, who ran Premier Automobiles at the time. He actually took the first plane to Delhi from Bombay and came to see me. I have now forgotten what arguments he put forward, but within months he had signed up with Fiat of Itlay and had, in effect, sold out to them and virtually closed down his business, just as I had predicted.

I have not met Doshi for a long time, but, as far as I know, his Premier plant is no more. One more Indian business has fallen prey to yet another multinational.

It must be said both the soft drink business and the automobile businesses are flourishing. I am told that we are now producing or selling a million cars a year, about ten times more than what we did before liberalisation. The same must be the case with soft drinks.

I used to drive a Premier, now I drive a Maruti. But I neither drink Coke nor Pepsi because they don't suit me. Incidentally, I have never seen the inside of a McDonald's, either here or in the US, for reasons that have nothing to do with the fact that Mc Donald's is a foreign business. I just don't like hamburgers and I am allergic to French Fries.

Friends tell me that the Indian economy is booming and GDP growth is in the region of 7 to 8 per cent., if you go by RBI's calculations. Good luck to RBI and its bulging foreign exchange coffers. But I am not sure who the real winner is. The Indian consumer has certainly won. But, in my heart of heart, I cannot help feeling that India has lost. Jai Hind.



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