(Drivebycuriosity) - India is flexing her muscles against global corporations. India plans to overhaul its competition law so that global technology companies will have to seek the country’s antitrust approval for many overseas mergers and acquisitions, an ambitious move by Prime Minister Narendra Modi’s government to gain more influence over Big Tech, reports bloomberg. All deals where the transaction value exceeds 20 billion rupees ($252 million) would require permission of India’s antitrust regulator if the firms have substantial business operations in India.
Modi`s announcement is just the latest step in a row of measures which discriminate foreign companies and force them to halt investments or to retreat from India ( thehill): Punished by high taxes & regulation Swiss building-materials firm Holcim, Royal Bank of Scotland, Harley-Davidson and Citibank have announced plans to downsize or leave India. German retailer Metro AG is selling off its Indian operation after two decades. Both Ford Motor Company and Tesla announced they had put on hold plans to make electric vehicles (EVs) in India. Amazon & Walmart daughter Flipkart are getting harassed by continuous antitrust probes and are not permitted to sell their own products (being restricted to be just platforms for Indian sellers indianexpress). Microsoft, Apple, Google & Netflix are getting harassed as well. Already in 1977 Coca Cola (!) withdrew her operations from the country in protest of regulations and legislation by the Government of India limiting the dilution of equity of multinational corporations.
Modi`s announcement follows India`s long tradition of treading foreign companies badly which is based on xenophobia, protectionism, anti-capitalism & over-regulation. India`s politics, which is protecting local competitors, is restraining foreign investments and encouraging inefficiency & corruption, is keeping India´s GDP low and her majority in poverty. Today`s India`s per capita income is just $2,280, less then a quarter of China´s per capita income of $12,560 (worldbank ).
I visited India in the 1990s and stayed there 6 weeks. I was flabbergasted about how much everything was strictly regulated. Being a foreign tourist I had to keep documents about all payments I made to prove that I had brought the money with me and not earned it there (which was strictly forbidden). Modi’ s announcement which will make business in India very challenging shows that nothing got better - quite contrary.
India`s antagonism against foreign businesses is based on her history. After becoming
independent in the year 1949 India`s economic politics was strongly
influenced by the thoughts of Mahatma Gandhi, who was an anti-capitalist and an ascetic (wikipedia). The legend didn`t believe that humans behave rational and are guided by
self-interest. Gandhi cared less about accumulating wealth and
economic prosperity. Instead he rejected materialism and preached a
policy of self-sufficiency. Gandhi also called for the boycott of
foreign-made goods (Swadeshi movement .britannica.com).
In the second half of the 20th century India mostly followed his philosophy and implemented an Gandhian-economics (wikipedia). Jawaharlal Nehru, the first prime minister of India said: “Never talk to me about profit, it is a dirty word” (Economy). India`s policy tended towards protectionism, with a strong emphasis on import substitution (Ghandi`s self-sufficiency), meaning replacing imported cars and other products with Indian made things, even though they cost much more and had a lower quality (Ghandi`s Swadeshi movement). India also focused on economic interventionism (politicians decide what and how much to produce & consume), a large government-run public sector, business regulation, and central planning.
The
result was an anemic economic growth and till today many Indians have to exist on a stone age
level. Modi´s newest step continues Gandhi´s self-sufficiency policy and resentment for foreign goods & services and will slow foreign investments further. India will stay dirt poor.
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