KAMAL MITRA CHENOY* Industrial Policy and Multinationals in India A NUMBER ot anti-imperialist tasks of India's national liberation struggle against British colonialism • had remained at the time of independence on 15 August 194Z. Not only was India firmly enmeshed in a subordinate position in the international capitalist division of labour, but foreign private capital, especially British capital, had a substantial base In the Indian economy. The attempts by the Indian state to control and direct this and more recent foreign capitalist investment, particularly by the multinational corporations (MNCs), are the subject of this paper. The Initial Phase, 1947-1956 In the early part of the century, the larger Indian businessmen did not generally support the 'Swadeshi movement which was directed against British firms and the purchase of foreign goods.! However, a large number of the mercantile community, the smaller traders and shroffs generally supported the Congress and were hostile to foreign, mainly British, capital operating in India. By the end of the twenties, disillusionment with the colonial government's economic policy led large sections of the industrialists to adopt a more hostile attitude towards foreign capital, and generally to support the nationalist movement.2 Swadeshi, till the advent of independence, remained a major theme in nationalist ideology. The emphasis on self-reliance and a discriminatory attitude towards foreign capital was continued even in the report of the AlCCs Economic Programme Committee (EPC), chaired byjawaharlal Nehru, submitted in late January 1948. The EPC had reserved the major area of economic activity for the state including (a) new undertakings in defence, key and public utility industries; (b) monopolies, defined as units serving more than one province; (c) banking and insurance; and (d) large-scale units producing/manufacturing food articles, clothing and consumer goods and competing against the cottage and small-scale sectors. Undertakings privately owned in areas reserved for the state were to be taken over within five years. Regarding foreign capital, the EPC report categorically proposed that, * Lecturer, Corporate Studies Group, Indian Institute of Public Administration, New Delhi.