India Needs to be Tough with MNCs

When you are negotiating with a bully who is a narcissist, you need to confront wisely and skillfully; otherwise, the bully will keep creating ruckus for you. However, India has to tread very carefully as it has an opposition which is hell bent to down Narendra Modi at any cost. The Opposition wouldn't hesitate even if their actions would be damaging national interests because the same opposition has cheerleaders in the form of millions of supporters. However, India needs to be diplomatically strategic with multinational companies (MNCs) even if the opposition doesn't support this.

Microsoft has restricted Nayara. It cannot access its data. Whatever has happened in this case needs urgent attention from the government. India needs to take a tough stand against such MNCs which go against the interests of the Indian economy. The Nayara case is enough to show a tough face to Microsoft India. It must be made very clear to Microsoft India that it is registered in India and that it has to protect Indian interests first than to serve the American interests. The same message must be conveyed to other companies also.

Though it might prove very costly but sometimes you need to respond rather than negotiate.

India needs to follow a balanced approach which is assertive and diplomatic while dealing with MNCs, especially when it matters to national interests. Microsoft India is a good case in point for India to take a firm position in safeguarding its interests. As a country, India must make it clear to all the MNCs as well as Indian companies that Indian interests come first and should be given priority by all companies doing any business or registered in India.

Key Focus Areas

To successfully traverse this complex and critical terrain, the Indian government must pay attention to the following key areas:

Regulatory Framework: Tightening current regulations or passing new ones can aid in making sure that MNCs play within the framework of Indian law and serve national interests. This includes stricter data protection legislation, tax laws, and environmental regulations. As far as data protection is concerned, it is a vital issue for India as the whole economy is now revolving around data. India must invest in data protection and data storage centres to bring back all the data to India that is being put on servers based in foreign lands. India must have its data in India.

Diplomatic Initiatives: Entering into diplomatic negotiations with the US government can resolve some of the problems associated with MNCs and foster a more conducive business climate for Indian enterprises. It may entail bilateral negotiations, free trade agreements, or joining international platforms. India needs to invest more in diplomatic relationships with every country, irrespective of size and opportunities available in those countries. Many diplomatic missions and embassies should be established.

Economic Leverage: India can exercise economic power to negotiate improved terms with the MNCs. By stimulating domestic industries and inviting foreign investment in strategic areas, India can achieve a more equitable trade partnership with other countries.

National Security: In working with MNCs, especially those in the technology industry, India needs to keep national security issues in mind. This can include examining investments, joint ventures, or data storage procedures. The data storage in other countries and companies which don’t respect India’s sovereignty can ultimately endanger Indian security.

Public-Private Partnerships: Partnering with Indian businesses and startups has the potential to fuel innovation and minimise foreign technology dependency. India must have many more companies like Zoho Corporation. This will encourage an ecosystem for technology-based firms and improve a competitive business landscape, and spur economic growth.

International Cooperation: Joining international forums, like the World Trade Organization (WTO) can offer India a platform to resolve trade disputes and negotiate better terms with foreign nations. India must ensure that it uses international multilateral organisations to its benefit when the US is paranoid and ignoring the international organisations.

Transparency and Accountability: Facilitating transparency in business transactions and making MNCs accountable for what they do can increase trust and encourage a better business climate.

By embracing an integrated strategy that encompasses these elements, India can successfully manage its ties with American MNCs without compromising its national interests. This could entail a mix of aggressive actions, diplomatic manoeuvres, and strategic economic planning to facilitate a more equitable and balanced business environment.

Potential Advantages

Potential advantages of this strategy are:

Greater Economic Growth: Encouraging indigenous industries and inviting strategic investments will enable India to promote economic growth and wean itself from foreign technology. If India wants to become the largest economy in the world by 2047 under its Viksit Bharat ambitions, it must become technologically independent.

Better National Security: Prioritising national security can ensure that the interests of India are safeguarded and possible threats from MNCs are averted. Digital data is key to national security these days, and any unauthorised access by anyone can put Indian security in jeopardy.

Greater International Cooperation: Pursuing diplomatic avenues and joining international institutions will allow India to foster deeper connections with other nations and bring about better trade terms.

Challenges

There are some possible challenges to take into account:

Retaliation by MNCs: Adopting a hard line against MNCs might provoke retaliatory actions, i.e., imposition of trade barriers or withdrawal of investment. However, it is risky but India must use its economic power and possible opportunities to its benefit.

Effect on the Indian Economy: Harsher regulations or stricter monitoring of MNCs may end up keeping foreign investment away and affecting the economic growth of India. So, India must have a balanced approach which is aimed at protecting its interests rather than being intrusive.

Complexity of Foreign Trade: It is complicated to deal with the intricacies of foreign trade pacts and policies, and it demands huge expertise and effort. India is experiencing this with the US right now. India has not been exercising its position to its benefit in negotiations for long. India must humbly exert its position.

By carefully balancing these elements and taking a balanced attitude, India can better defend its national interest while encouraging a more friendly business environment for domestic industry by having transparent regulations, relationships and more investment diplomacy than being intrusive.

Rajeev K Upadhyay