They said, Indian laws like the Foreign Exchange Regulation Act, were inadequate in containing the exploitation by MNCs. They stressed the need for a new strategy to ensure the country’s sovereignty over its resources.
In 1973, the United Nations took note of the growing size of the multinationals and recommended an in-depth study of the rise of multinationals and its impact on trade and development of other countries.
A group of eminent persons led by Shri L.K. Jha submitted a report on the subject in 1974. Important points made in the report are as follows:
1. International corporations are organisations largely beyond the control of any single government.
2. Their overall goal is world-wide profits without regard for what is best for an individual country.
3. The interests of the country where a subsidiary is established for the development of export markets are subjected to the market interests of the parent company.
4. Parent companies do not make the most modern technology available to their subsidiaries.
5. International corporations prevent the growth of locally owned enterprises by aggressive and unfair competition.