Growth of Indian Multinationals in the World Economy: Implications for Development

Abstract

The importance of Indian multinationals in the world economy has been growing significantly since 1990s. An increasing number of Indian firms across wide range of sectors are undertaking large overseas projects and their focus is gradually shifting towards developed countries. Until then, OFDI from India was confined to a small number of family-owned firms primarily investing in developing countries through joint-ownership arrangement. These changing natures of Indian OFDI are likely to have a number of implications for the development of both host and home country. This study had explored some of these issues relating to the growth of Indian multinationals.

Emerging Multinationals from India and China: Origin, Impetus and Growth

“…The liberalization of Indian OFDI policy regime in terms of putting in place an automatic approval route for OFDI projects, successive enhancement of permissible overseas investment ceiling from $2 million in 1992 to $15 million in 1995 and further to $50 million in 2001 for a financial year, and allowing cash transfer for outward investment led to renewed cross-border production activities undertaken by EIMS in 1990s (Pradhan, 2008d). The Chinese OFDI policy, in contrast, become more cautious in 1992-98 following reports of heavy looses suffered by outward investing Chinese firms in their foreign operation (Wong and Chan, 2003).…”

India’s Emerging Multinationals in Developed Region

“…In the case of India, as much as 96 per cent of her OFDI stock as at 31 st July 1986 went to host developing region (Pradhan, 2008a). Indian firms were observed to locate their OFDI projects in developing countries in South-East and East Asia, Africa, West Asia and Central Asia (Pradhan, 2008b).…”

Regional Heterogeneity and Firms’ Innovation: The Role of Regional Factors in Industrial R&D in India

“…The empirical research, for instance, presents R&D to be an important determinant of firms' export performance (e.g. Pradhan, 2008) indicating existence of bi-way feedbacks between them. Similarly, R&D intensity may have a favourable influence on other firm-specific factors like firm survival (age), size, profit and purchase of foreign technologies.…”