The political economy of Indian joint industrial ventures abroad

Indian firms are moving abroad in increasing numbers to establish manufacturing plants with local partners in less-industrialized countries. As a result, India has become one of the few important sources of Third World technology. Indian foreign direct investment was the intended consequence of foreign trade policies designed to link exports with investment, and the unintended consequence of Indian regulatory policies designed to restrict the domestic growth of large-scale private enterprises. In addition, Indian overseas operations were aided by existing financial and technical collaboration agreements in India and by expanded collaboration overseas between transnational corporations and Indian private and public enterprises. These various factors have disproportionately affected the five to ten largest Indian industrial conglomerates that control the bulk of Indian joint ventures abroad. The experiences of these firms and of the Indian government in promoting their foreign investments have had important consequences for the domestic policy process in India and for Indian foreign policy.