The Role of Transnational Corporations in India Flashcards
What is a TNC?
A Transnational Corporation (TNC) is a company that operates in multiple countries, often with headquarters in HICs and factories in LICs or NEEs.
Why do TNCs operate in India?
TNCs are attracted to India due to its cheap labor, large workforce, and growing consumer market.
What are the advantages of TNCs in India?
TNCs provide jobs, boost infrastructure, introduce new technologies, and improve trade links.
What are the disadvantages of TNCs in India?
TNCs often exploit workers with low wages, cause environmental damage, and send profits back to HICs instead of reinvesting locally.
What is an example of a TNC operating in India?
Unilever, a major consumer goods company, operates in India with 21,000 employees and 29 factories.
What is Project Shakti?
Project Shakti is an initiative by Unilever that helps rural Indian women start small businesses, promoting entrepreneurship.
What negative environmental impact has Unilever had in India?
Unilever was responsible for mercury contamination in Kodaikanal, affecting workers and the local environment.
What is the leakage effect?
The leakage effect occurs when profits made by TNCs in a host country are sent back to their home country instead of being reinvested locally.
How does outsourcing benefit India?
Many Western companies outsource IT services to India due to lower costs and a skilled English-speaking workforce.
What is foreign direct investment (FDI)?
FDI is when foreign companies invest in a country by building businesses, factories, or infrastructure.
