Rival chambers like ASSOCHAM and FICCI have since clarified their stance vis-a-vis FDI. ASSOCHAM has consistently advocated free entry for MNCs, even in the consumer goods sector. Moreover, it has advocated greater transparency in FIPB clearances. On the other hand, the current president of FICCI, calls for a dominant role for MNCs in infrastructure, 'leading' role in exports and 'supporting' role in the consumer goods sector. All the chambers are united in the view that FDI is critical for India, but their opinions about the role and scope of FDI differ.

Have these arguments influenced policy-making? It seems that some decisions have been postponed or kept in abeyance because of the nationalist economic agenda:

Companies like Wrigleys, Reebok and Quaker Oats had their proposals for 100% equity ventures turned down by the FIPB.

A similar treatment has been meted out to the proposed Tata-Singapore Airlines venture.

Sinar Mas has been refused the crucial and previously approved release of water for the project from the Ujani reservoir. It should be noted that it was only after Sinar Mas was assured its supply of water by the Maharashtra state irrigation department that they decided to go ahead with their Rs 6.5 billion investment.

One should note the differences between the old style Swadeshi movement and the new agenda.

One of the arguments explicitly used against foreign ventures today is that they often use environmentally disastrous technology and the effects are felt primarily by the poorer sections. The National Fishworkers Forum's agitation against joint ventures in Indian deep seas is based on this ground. However, the same criticism is valid of the way many Indian firms operate. The effect on the Taj Mahal of the operations of the Mathura refinery is a classic example.

A second argument is that through their enormous financial clout, they manage to influence decision makers and get favourable terms; in the long term the common man will pay exorbitant amounts for their products and services. (Implicitly, the foreigners will destroy the local manufacturers, who would have been able to provide similar goods and services at lower prices.) This is the level playing fields argument, i.e., the financial power of the foreign firms must be neutralised and domestic firms allowed to compete with them on equal terms.

A third argument is that of cultural invasion -- the destruction of 'pristine Indian (more specifically Hindu) values' and the creation of 'unsuitable aspirations'. Interestingly, even newspapers which run scathing editorials on any attempts to backtrack from the liberalisation process, immediately cry foul at any prospect of large scale foreign entry into the media, citing the dangers of cultural imperialism.

Excerpted from India Development Report, Edited by Kirti S Parikh, Indira Gandhi Institute of Development Research, Oxford University Press, 1997, Rs 265, with the publisher's permission.

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