NAGESH KUMAR^ KAMAL MITRA CHENOY*
Multinationals and Self-Reliance : A Case Study of the Drugs and Pharmaceutical Industry
SELF-RELIANCE has been a declared goal of planning in India, explicitly at least since the Third Plan. Therein it is stated that "...special emphasis has to be placed on industries such as steel, coal, oil, electric power, machine building and chemicals...(as) the development of these industries is an essential condition of self-reliant and self-sustained growth".1 Attempts made to create conditions to reduce the dependence on foreign aid and imports included a liberal policy towards foreign private investment. The April 1949 Statement on Foreign Investments stipulated parity between foreign and Indian captial, permitted the repatriation of profits and provided assurances against nationalization, with "fair and equitable" compensation in the exceptional case of acquisition.2 This liberal attitude, which included concessions not envisaged in the Industrial Policy Statement made exactly a year earlier,3 was intended to obtain private foreign assistance for the devleopment of the Indian economy. It was believed that foreign captial would: (a) supplement domestic savings; (b) provide the requisite sophisticated technology and (c) the foreign exchange component of the capital outlay of the projects.
The government's liberal policy towards foreign private capital was strongly criticized by sections of Indian big business till about 1955. Ironically, in 1953, FICCI (Federation of Indian Chambers of Commerce and Industry) passed its now famous "Swadeshi Resolution" urging the Congress government to respect the principles of Swadeshi by regulating more strictly the inflow of foreign captial.4 On its part, the government believed that indigenous political power was sufficient to ensure that the inflow of
^Lecturers in the Corporate Studies Group, Indian Institute of Public Administration, New Delhi,