The role of transnational corporations (TNCs)

Many transnational corporations (TNCs) have set up factories and offices in India. The country is an attractive location to TNCs because the population speak good English, they have strong IT skills and they work for lower wages than people in many other countries. Companies like Toyota, Volvo and Hyundai manufacture cars in India. Companies like ASDA, BT and Virgin Media have call centres in India.

Advantages of TNCs in India

There are many advantages of TNCs. India has benefited in many ways:

  • TNCs have created jobs and offered education and training to employees
  • the additional wealth has led to the multiplier effect
  • some TNCs have set up schemes to provide new facilities for local communities
  • the infrastructure of the country has been improved, with new roads and internet cabling
  • TNCs pay tax to the government, which can be spent on development projects

Disadvantages of TNCs in India

There have also been some disadvantages of TNCs in India:

  • some corporation leaders have taken advantage of the relaxed environmental laws in the country by creating lots of pollution
  • the conditions for workers in factories can be very harsh
  • many TNCs are owned by foreign countries so economic leakage occurs, where profit is sent abroad
  • the best jobs are often given to foreign workers from the TNC's country of origin
  • TNCs use many of the country's natural resources - a soft drink bottling plant in Kerala, India, was shut down due to its impact on local water supplies