FDI benefits foreign firms more than common man

Economist Prof. B.M. Kumaraswamy speaks at Mysuru unit of Swadeshi Jagaran Manch event

Mysuru: Noted economist Prof. B.M. Kumaraswamy has asserted that despite Foreign Direct Investment (FDI) playing a major role in India’s industrial and infrastructure development, its benefits rarely trickle down to the common man. He was speaking after releasing the book ‘Illusions and Facts’ on FDI, at a programme organised by the Mysuru unit of the Swadeshi Jagaran Manch at the Institution of Engineers-India (IEI) on JLB Road on Sunday.

Prof. Kumaraswamy pointed out that the rise in FDI has failed to generate sufficient employment opportunities. He lamented the inability of Indian companies to effectively compete with foreign firms in international markets. “FDI primarily comes in two forms — Greenfield and Brownfield. While Greenfield investments lead to the establishment of new industries, Brownfield investments often result in foreign companies gaining control over existing Indian businesses. The growing trend of Brownfield investments is worrisome and the Union Government must seriously consider placing checks on foreign investments,” he opined.

He further noted that the increased use of robotics and artificial intelligence in foreign enterprises is making it harder for India to achieve industrial self-reliance and technological independence, even under the ‘Make in India’ initiative. Expressing concern over the dominance of foreign brands in Indian markets since liberalisation began 32 years ago, Prof. Kumaraswamy remarked that foreign companies have taken over even everyday consumer products like toothpaste, soft drinks, shoe polish, cement, vehicles, televisions and refrigerators.

“Foreign brands now occupy 73 percent of the Indian market, while domestic companies account for only 27 percent. These statistics clearly show that foreign brands are ruling our markets,” he said.

He urged the Union Government to ensure that Indian companies are not swallowed by foreign investors and stressed the need for economic self-reliance in the industrial sector.

Citing the example of Japanese automobile giant Suzuki, which has operated in India for over four decades without transferring technological know-how, he said this highlights how the benefits of FDI largely remain with foreign companies, bypassing Indian industries.

The event was attended by MCCI President K.B. Lingaraju, ICAI Mysuru Chapter President C.A.S. Bhargav, Swadeshi Jagaran Manch’s Rashmi Vijayakumar and others.