Multinational companies(MNCs) or Transnational companies(TNC),or Multinational Enterprises(MNEs) is a business unit which operates in many countries.They generally have their manufacturing unit in one country and spread their market and industries in several countries based on the feasability of the business environment of that country.
MNCs before investing and entering in a country,scrutinize the business environment of that country.i.e the politics,culture,economy and legal aspects of the country that they are planning to enter.They always seek for oppurtunities.
A country that is quite open in economic flow and has lesser trade restrictions always attract their attention.The investment of MNCs is a boon for the countrys economy.It facilitates and speeds up the countrys economic development.They generate employment,introduces new technology and dollars and revolutionises the business process in the country.Thus they responsible for improving the quality of products and services available in the market by increasing competition.
India has embarked in its journey of welcoming the MNCs ,back in the 90s.Since then the country has witnessed a speedy growth in its economy.Apart from gaining dollars to reduce the current account deficit,moving towards stable INR/USD exchange rate India owes MNCs for increase in their revenue through taxes and duties.There has been huge generation in employment and a gigantic increase in avaibality of products for the customers.India has also witnessed huge extension of its market for the available raw materials.
India is the largest democratic country in the world today and is also a going to be the most populated country surpassing china, in the next decade.India is a huge domestic market and also can provide comparatively cheap labour force, owing to its huge population and unemployment.The average age of indian population this decade is below 28 and there are millions of technocrats and management graduates who pass out every year, and thus India has plenty of qualified job seekers.Also due to the democratic form of government prelevant in India the investments from these MNCs poses minimal political risk.
Thus the future of India hugely depends on the foreign investment of these MNCs and is a panacea to the otherwise unsurmountable problems of unemployment and proverty that is plaguing the Indian Economy.