The Position of Foreign Business in India Today

Abstract

JN AN ARTICLE1 three years ago, I said: To my mind, perhaps the most remarkable aspect of the Indian scene today is that, although India has now gained her independence, foreign businessmen have remained in the country and continue to operate under working conditions not too different from those under British rule... . Foreign business and industry still remain, and in some cases are expanding, but the conditions under which they must operate have changed rather sharply in the past two years. Stricter watch is now kept over established foreign firms and over the industries in which they predominate, and the openings for newcomers have been restricted. Yet there has been improvement in that operating conditions have been clarified and the foreign businessman knows much more clearly just where he stands, what he can and cannot do. In the course of the controversy on the merits of foreign enterprise, he has been able to take the measure of his Indian critics and antagonists. In many ways this is a better state of affairs than the apparently easy but basically uncertain conditions that followed immediately on independence. It may strike some people as curious that the upsurge of commercial nationalism should have been delayed so long after independence. For almost four years after 1947, foreign business in India was hardly a public issue except in Communist propaganda. Then in i95i there began a debate in Parliament and the press that has scarcely died down yet in which the foreign businessman came in for a good deal of criticism. I would guess that the reasons for this delayed reaction were not political but economic. After the war and partition, inflation was rampant. There were countless shortages, caused not only by the war but by the economic disruption that accompanied the division of the country: shortages not only of food and other consumer goods but of industrial raw materials, of plant and manufacturing capacity. It was