The business sector in India has achieved quick growth following liberalization.

WTO statistics reveal that it is responsible for almost 1.5 percent of global trade at present. India has ranked 133rd, though, and this means that there is lot of room for improvement for this South Asian economic powerhouse looking to cement its position in the global economic map. As the third-largest economy in the world, India is a preferred destination for FDI

Until the liberalisation of 1991, India was largely and intentionally isolated from the world markets, to protect its economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment (FDI) was restricted by upper-limit equity participation, restrictions on technology transfer. In 1991, India adopted liberal and free-market oriented principles and liberalized its economy to international trade under the guidance of Manmohan Singh, who then was the Finance Minister of India and eliminated mechanism of strict government control on setting up new industry.

A foreign company planning to set up business operations in India has the two options whether as an Indian company or a foreign company. If the foreign company establishes its business by establishing the company under Indian companies ACT, 1956, all the provisions related to the Indian companies will apply on that company. But if foreign company starts its business as a foreign company through branch, liaison office or project office it has to comply with some other provisions also.

There are a number of reasons why the multinational companies are coming down to India. India has got a huge market. It has also got one of the fastest growing economies in the world.
Besides, the policy of the government towards FDI has also played a major role in attracting the multinational companies in India.

Government, nowadays, makes continuous efforts to attract foreign investments by relaxing many of its policies. As a result, a number of multinational companies have shown interest in Indian market. India has strengths in telecommunication, information technology and other significant areas such as auto components, chemicals, apparels, pharmaceuticals, and jewellery. India has a large pool of skilled managerial and technical expertise. The size of the middle-class population stands at 300 million and represents a growing consumer market

It is too specify that the companies come and settle in India to earn profit. A company enlarges its jurisdiction of work beyond its native place when they get a wide scope to earn a profit and such is the case of the MNCs that have flourished here.

More over India has wide market for different and new goods and services due to the ever increasing population and the varying consumer taste. The government FDI policies have some how benefited them and drawn their attention too.
The restrictive policies that stopped the company's inflow are however withdrawn and the country has shown much interest to bring in foreign investment here.

Besides the foreign directive policies the labour competitive market, market competition and the macro-economic stability are some of the key factors that magnetize the foreign MNCs here. Following are the reasons why multinational companies consider India as a preferred destination for business: Huge market potential of the country FDI attractiveness Labor competitiveness Macro-economic stability

 There

are certain advantages that the underdeveloped countries like and the developing countries like India derive from the foreign MNCs that establishes. They are as under:Initiating a higher level of investment.

Reducing
The The

the technological gap

natural resources are utilized in true sense. foreign exchange gap is reduced. up the basic economic structure.

Boosts

Roses does not come without thrones. Disadvantages of having an MNCs in a developing country like India are as underCompetition to SMSI. Pollution and Environmental hazards. Some MNCs come only for tax benefits onlyExploitation of natural resources. Lack of employment opportunities.

 Diffusion
Working Slows

of profits and Forex Imbalance.

environment and conditions

down decision making

Economical

distress

Globalization is the driver to multinationalism. Large foreign companies (Fortune 500 companies) have looked at India as potential growth market, as Indian Economy would be the 4th Largest Economy in terms of Purchasing Power parity and by 2025 it is projected to be about 60% of US Economy.

Large corporations whose entry into Indian Economy has resulted in mergers and acquisitions in a big way through FDI, etc. Those who have/having potential to do multi-million $ business are being acquired and/or merged with the world's large organizations.

This has created and/or increased the wealth of the stake holders of Indian companies including employees. However, with this, the balancing act between the RICH and the POOR is not maintained.

On the other hand, there has been huge loss to small and medium enterprises when a foreign company enters Indian market to offer their products and services. For such companies global strategies matters more, than the economic condition of our country and its people. It is just a minute's job for them to close down the business leaving all its employees and distributors in lurch.

IBM: IBM India Private Limited, a part of IBM has been operating from this country since the year 1992. This global company is known for invention and integration of software, hardware as well as services.
Nokia Corporation: Nokia Corporation was started in the year 1865. Being one of the leading mobile companies in India

PepsiCo: PepsiCo. Inc. entered the Indian market with the name of PepsiCo India from the year 1989. Within a short time span of 20 years, this company has emerged as one of the fast growing as well as largest beverage and food manufacturer. Ranbaxy Laboratories Limited: Ranbaxy Laboratories Limited, one of the biggest pharmaceutical companies in India, started their business in the country from the year 1961

Reebok International Limited: This global brand is a famous name in the field of sports as well as lifestyle products. Reebok International Limited, a subsidiary of Adidas AG, is based in U. S. A. (United States of America) started its operation in 1890s. Sony: Sony India is a part of the renowned brand name Sony Corporation, which started their business operation in the year 1946 in Japan.

Vodafone: Vodafone Group Plc is an international telecommunication company, which has got it's headquarter based in London in the United Kingdom (U. K.). Earlier known as Vodafone Essar and hutch. And many more