The role of transnational corporations (TNCs)
Many trans-national corporation (TNC)A company that operates in many different countries. (TNCs) have set up factories and offices in India. The country is an attractive location to TNCs because the population speak good English, they have strong IT skills and they work for lower wages than people in many other countries. Companies like Toyota, Volvo and Hyundai manufactureArticles or goods produced by workers in secondary industries from raw materials. cars in India. Companies like ASDA, BT and Virgin Media have call centresA place that is equipped to deal with a large volume of phone calls at the same time. in India.
Advantages of TNCs in India
There are many advantages of TNCs. India has benefited in many ways:
- TNCs have created jobs and offered education and training to employees
- the additional wealth has led to the multiplier effectThis occurs when a positive change happens, which then has a knock-on effect on other businesses. For example a new office may open, which leads to an increase in lunchtime sandwich sales at the local café and more bus passengers.
- some TNCs have set up schemes to provide new facilities for local communities
- the infrastructureThe basic structures needed for an area to function, for example roads and communications. of the country has been improved, with new roads and internet cabling
- TNCs pay tax Money paid by individuals or businesses to the government. to the government, which can be spent on development projects
Disadvantages of TNCs in India
There have also been some disadvantages of TNCs in India:
- some corporation leaders have taken advantage of the relaxed environmental laws in the country by creating lots of pollution
- the conditions for workers in factories can be very harsh
- many TNCs are owned by foreign countries so economic leakageWhen profits from a business are sent to another country. occurs, where profit is sent abroad
- the best jobs are often given to foreign workers from the TNC's country of origin
- TNCs use many of the country's natural resources - a drinks-bottling plant in Kerala, India, was shut down due to its impact on local water supplies
