Role of Foreign Capital in India
WHAT is the extent of foreign private capital in the Indian economy? Is it growing over time? These arc the questions discussed in this article. Some suggestive, but by no means conclusive, evidence regarding the impact of foreign capital will also be presented.
The major foreign companies operating in India arc generally subsidiaries or associates of giant transnationals conducting business on a global scale. While assets within India may form a small part of the worldwide complex and may not always be very large in relation to many an Indian company, the economic power enjoyed by such a subsidiary could be considerably greater; the size of Indian assets might understate the relative importance of such subsidiaries. Nevertheless^ in the Indian context many of the foreign companies have been very large.1 Of the top 20 monopoly or large business houses (LBH) listed by the Dutt Committee there were three foreign groups, namely, Andrew Yule, Bird-Heilgers and ICI: their assets in 1966 were, in million rupees, 467, 688 and 501 respectively. At least three foreign branch (FB) companies, not included among the top 20 LBHs, were considerably larger than many of the monopoly houses figuring in that list; these were Burmah-Shell (Rs 793 million), the Calcutta Electric Supply Corporation(Rs 632 million) and Esso (Rs 426 million). However, the two oil companies have recently