Unit 5 topic-11(MNC in India)

1. MNCs in India

2. What is an MNC ?
• Multinational Corporations or Multinational Companies are corporate organizations that operate in more than
one country other than home country. Multinational Companies (MNCs) have their central head office in the
home country and secondary offices, facilities, factories, industries, and other such assets in other countries.
• It Owns or controls productions of goods or services in one or more countries other than the home country.
• These companies operate worldwide and hence also known as global enterprises. The activities are controlled
and operated by the parent company worldwide. Products and services of MNCs are sold around various
countries which require global management.
• International corporation, A Transnational corporation, A Stateless corporation.
• High turnover and many assets, aggressive marketing are some of the features of Multinational Companies.
LTI, TCS, Tech Mahindra, Deloitte, Capgemini are some of the examples of MNCs in India.

3. MNCs in India
In India MNCs are attracted towards:
• India’s large market potential. India presents a remarkable
business opportunity by virtue of its sheer size and growth.
• India’s vast population and increasing its
purchasing power.
• India is also emerging as the manufacturing and sourcing
location of choice for various industries.

4. Multi National Corporation

5. Indian MNCs

6. Why INDIA?

7. Huge market
growth
FDI policies
Fast growing
economy
Liberalization

8. • The first MNC was the East India Company, formed to trade with East and
Southeast Asia and India, which operated from 1600to 1874.
• It was criticized as a form of British imperialism, especially for monopolistic
trading policies and becoming involved in local politics.
History of MNCs in India 1600 to 1874 – The East India Company

9. The oldest MNCs in India include:
• Standard Charted Bank, banking – 1858
• Castrol India Limited, automotive and industrial lubricants - 1910
• Siemens, electronics and electrical engineering - 1922
• SKF India Ltd., ball bearing manufacturing and knowledge-driven integrated solutions provider - 1923
• GlaxoSmithKline (GSK) Pharmaceuticals Ltd., pharmaceuticals - 1924
• Philips Electrical Co. Pvt Ltd., lamp sales/manufacturing - 1930
• Hindustan Unilever Ltd. (HUL), Indian consumer goods – 1932
History of MNCs in India 1858 to 1932 – Oldest Foreign MNCs

10. Since 1991, the number of MNCs operating in India has greatly increased due to the country’s move
toward economic liberalization, openness to foreign investment, and positive change of perception
toward MNCs.
By the end of this year, it is expected that half of the list of Fortune500 companies will have an MNC
center in India.
History of MNCs in India 1991 to Present – Growth of MNCs

11. 1. Growing economy: India is the 10th largest economy and has one of the fastest growing
economies of the world.
2. Growth of middle-class and those with disposable income: By 2030, India’s middle class is expected
to grow to reach 475 million. The increase of the middle class in India means, that more of the
population will be able to afford the goods sold by the companies moving operations to India.
3. General population growth: India has a population of 1.271 billion people, making it the second
most populated country in the world. It is projected to overtake China and be the most populated
country in the world by 2025.
Why India Is Attractive to ForeignMNCs

12. Why India Is Attractive to ForeignMNCs (continued . . .)
4. Talent pool: Companies increasingly need to source both low- skilled and high-skilled workers.
India has a strong education system, which emphasizes English language skills, managerial skills, and
technical skills. Additionally, India has a large enough population that MCNs can rely primarily on
local workers, leading to increased productivity and greater efficiency, and thus creating an advantage
over competitors.
5. High output center: India is the location of manufacturing for many industries and is ranked
10th internationally for factory output. The country is also ranked 15th for servicesoutput.
6. Easier access to capital (FDI to be discussedbelow)

13. Agencies which control activities of MNC’s

14. Indian owned MNCs: Multinationals in India

15. Top MNC’s in India
• IBM India Private Limited, a part of IBM has been
operating from this country since the year 1992.
• The net income of this company post completion
of the financial year end of 2010 was $14.8 billion
with a net profit margin of 14.9 %.
• Present in more than 200 cities, this company is
making constant progress in global markets to
maintain its leading position.
• A subsidiary, named as Microsoft
Corporation India Private Limited, of the U.S. based
Microsoft Corporation, one of the software giants
has got their headquarter in New Delhi.
• The net income of Microsoft Corporation grew
from $ 14, 569 million in 2009 to $ 18, 760 million
in 2010.

16. • Nokia Corporation was started in the year 1865 &
became one of the leading mobile companies in
India.
• The net sales of the company increased by 4 % in
the last financial year with sales of EUR 42.4
billion as compared to 2009's EUR 41 billion.
• PepsiCo. Inc. entered the Indian market with the
• name of PepsiCo India from the year 1989.
• As per the annual report of the company in the
last business year, the net revenue of PepsiCo
grew by 33 %.
• By the year 2020, this food manufacturing
company intends to triple their portfolio of
enjoyable and wholesome offerings.

17. • Sony India is a part of the renowned brand name
Sony Corporation, established in India in
November 1994, this company has captured one
of the leading positions in the field of consumer
electronics goods.
• Sony India is planning to invest around INR. 150
crore for the marketing of the activities.
• This multinational company is a famous name in
the field of I. T. (Information Technology) services,
Business Process Outsourcing (B. P. O.) as well as
business solutions.
• Tata Consultancy earned a growth of 8.9 % during
the latest quarter of this financial year, which
ended on 30th September, 2011.

18. • Vodafone India is among the largest operators of
mobile networking in the country.
• It has approximately 173 million customers as of
• September 2014.
• Vodafone is the second largest player in telecom
operator in India after Airtel, with a market share of
22.95%.
• The biggest automobile company in India, Tata
Motors Limited, is among the leading commercial
vehicles manufacturer in the country.
• Post completion of the financial
year 2010 to 2011, the global sales of the
company grew by 24.2 % with sales crossing INR.
1 million.