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> The Foreign Exchange Regulation Act of 1973 required many multinationals to hand over 60% of the equity in their local subsidiaries to Indian partners. Coca-C
by mtgx 8y ago
> The Foreign Exchange Regulation Act of 1973 required many multinationals to hand over 60% of the equity in their local subsidiaries to Indian partners. Coca-Cola would have had to release its top-secret syrup recipe and IBM its computer codes in order to comply. Faced with an ultimatum from Fernandes, Coca-Cola—along with Mobil, Kodak, and 54 other companies—left.
How interesting. Meanwhile, when China asks the same of foreign companies today, the foreign companies seem to offer half of the local subsidy and the entire IP on a silver platter.
Just one recent example, but there are others involving Microsoft with Skype, Windows 10, and so on:
https://www.theregister.co.uk/2018/12/10/qualcomm_layoffs/ https://www.theregister.co.uk/2018/12/10/qualcomm_layoffs/
- Cursuviam 8y agoChina is a much bigger market than India in 1973
- adventured 8y agoSpecifically in 1973 the US economy was 16.4 times larger than India and 10.3 times larger than China. Today the US economy is about 7.6 times larger than India and 0.5 times larger than China. India's economy was equivalent to ~$500 billion in 1973, inflation adjusted to today's dollar (per the US Govt figures). That would be good enough for 25th or so globally, behind Belgium. Not tiny per se, definitely small for what India's market is capable of. They're of course 7th now in national GDP, set to overtake France and the UK this year and move into the 5th spot behind Germany.
- seanmcdirmid 8y agoChina required 51-49 joint ventures; also this happened mostly in the 90s when the oppurtunities in China were more apparent. India is still a harder place to do business than China. In particular, their law on patent ownership is really harsh such that foreign companies will avoid filing for patents at all from India (if something needs to be patented, the filing employee has to transfer out of India first).
- mritun 8y agoWhat is the basis of your comment that for filing patents companies have to move their employees? Multitude of my coworkers in India who have filed and have been granted hundreds of patents would vehemently disagree with you!
- seanmcdirmid 8y agoI worked for a company (Microsoft) that did R&D in India as well as China. When we (coming from China) visited India, some of the employees there casually explained to me the problem with patents. The gist of it was that if Microsoft filed for a patent in India and that patent was used in say Windows, then India would demand that all Windows profits be booked in India, regardless of the rest of the IP used in it.
- unmole 8y ago> (if something needs to be patented, the filing employee has to transfer out of India first). That does not match my experience at all. I only had to sign some paperwork to authorize a patent agent to file on the company's behalf outside India. I work with people with several patents granted both inside and outside India and have never heard of anything of this sort.