Multi-national Companies have been in India for several centuries now. Taking a politically neutral look at the historical perspective, perhaps the most effective MNC ever, seems to have been the East India Co. The very name can act as a delayed-action explosive to some minds, but on the other hand, one cannot discount, to be fair, the Herculean tasks the EIC had executed to make India a nation in every sense... not a motley collection of princely states, centuries behind others - but a modern democracy.

The MNC culture grew out of the EIC and its seemingly magical capabilities for creating engineering wonders. To lay down railroad tracks where even the most intrepid travellers would not go, a century ago would have been a colossal task. The tunnels they cut through and the steel structures including sturdy bridges have outlived their predicted lives. Quality consciousness was ingrained in the British engineers, indeed hats off to the pioneers who braved the wild animals, blood sucking leeches and worse in the form of locals, and completed projects in time. They gave us value for money. That you can provide less for the money and get away with it - is a more recent realisation, for sure.

Zooming forward to the present, we see a flood of MNCs in India now. Past few years have driven home the realisation, in the minds of the power that be, that there really is no point in re-inventing the wheel: especially when very advanced wheels are being made elsewhere. With the entry of an MNC specialising in any useful technology you not only get: a] the best of the newest technologies; b] the highest of quality culture; and c] continual updates on daily improvements, but a host of other in-built benefits.

It then goes without stating here that the basic infrastructure for development in our huge nation is far from satisfactory. Whatever the reasons, that's the stark reality. This is not criticism - it's a fact of life. We have all become used to living it.

If a new product is to be developed in India, what does the entrepreneur do? He does, what is sometimes snootily derided as 'reverse engineering' [per se, not a bad idea when all doors are closed] - which dictates the future industrialist to take a piece apart, analyse it and see if he can make the product locally. There are undeniable stars in his eyes, and the cash register never stops jingling in his ears because:

• local labour is cheap [incredibly cheap in some cases]
• local material is cheap [never mind the quality...], and
• local testing in any old laboratory will do [dangerous]

Just mark the stark distinction between what the entrepreneur dreamed and what reality is [in parentheses above]. Thus all the premises on which the development was based turn out to be sheep disguised as tigers. The entrepreneur or his product fails, because too many compromises have already been made. The quality and especially the consistency in quality have not been ingrained at the design level, the manufacturing methodology is slip-shod. No benchmarking has been done, and short cuts have been introduced, galore, thus digging a most complete grave for the product that never hit the market. If it did, it would bounce back like a bad cheque.

Large companies have made similar mistakes. For the collective mind, is nothing but an exaggerated amplification of the individual failings: when it comes to twinkling stars in the neo-industrialists' eyes or the seductive jingle in his ears, one hardly sees any dim-sighted or hearing-challenged incumbents. Everyone wants a big slice of the entrepreneurship pie, unfortunately, with minimum pain.

Logically, involving an MNC here would be a less painful method of producing quality goods based on the state-of-the-art technologies. One of the largest deterrents to this easiest of all short cuts is the fact that the huge costs involved usually frighten the entrepreneurs off. What they fail to calculate is the slow bleeding cost of wrong attempts, money lost on materials that went down the drain in failed tests, and even costlier hidden expenses in reverse engineering where the entire philosophy of designing, developing, perfecting a product have been shortened to a mockery. But then farsightedness was never a strength with entrepreneurs.

All generalisations are dangers, said Voltaire [including this one], so it would be a fallacy to say that bringing in MNCs will get us highest of technologies, newest of methodologies, top rung quality levels, and an automatically ensured market either. There are black sheep in every community, and it would not be surprising to find a lot of entrepreneurs dragging behind them a bagful of woes concerning the unfair dealings by the MNCs and other alleged malpractices. Actually speaking, on the other hand, there have been many examples where a small company from abroad has successfully transferred the know-how and supervised the manufacturing, quality control exercises and a general health of the collaborator in India, excellently. Not an MNC, in any sense.

What this boils down to is not so conspicuous:

• It need not be a large cash-rich MNC to be successful here.
• A large corporate with its fancy management ideas need not spell a guarantee of success either.
• There's an almost-agricultural flavour to the successful collaborations... too many uncontrollable factors can go against the new venture [invisible bacteria can ruin the crops...El Nino in Latin America can mean no rains here...ad infinitum].
• Successful MNCs in India, usually seem to be those who have transplanted the success culture to our soil - for instance some of the automotive industries with Japanese collaboration, enforce their work culture with an iron fist, not a popular measure. But it works. Their missionary zeal never fails to work.
• The attitude of the bureaucracy and politicians needs drastically to change, or else the number of MNCs could dwindle down to nothing in a few years. Everything is not hunky dory.
• Some thinkers argue that we have corrupted the MNCs - which by itself is a thoroughly debatable point. The human flaws and chinks in the armour remain the same, whatever the culture, as history shows. Perhaps the reverse may hold true, too. Mankind seems to have an unlimited appetite for corruption.
• Corruption and bribery have been lodged in human practices from times immemorial, but a disturbing recent trend, glibly attributed to the third world countries, is fraud in its myriad manifestations... one pays bribes but gets nothing in return. Brazen fraud.
• The existing R&D infrastructure especially materials testing laboratories have to go a sea change before any meaningful adoption of higher technologies can be attempted.

What Has Been Their Experience In India?
A trade and commerce journal came up some time back with some pretty interesting findings last year regarding the MNCs operating happily in India:

• Over 60% of MNCs operating in India are not in the red.
• Most-preferred destinations appear to be, despite what the media keeps harping upon, Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu [interestingly, Gujarat does not figure here].
• More than half of them are expanding: a sign of good health, undoubtedly.
• Installed capacity seems to be utilised well, up to 75%. Not bad at all.
• Almost all foreign companies express their satisfaction (!) with the red tape [yes, it exists] and other hassles.
• Foreign Direct Investment almost doubled in one year.
• Money transfer seems to be all right to most of them.
• Finally the market penetration angle: most complain it is difficult but experts maintain it is an infrastructural problem and not recession as widely believed.

MNCs in the Engineering Sector

The overall picture is full of grey tones here. One cannot easily distinguish a mad rush of the infrastructural companies though a number of large engineering projects have been on the anvil for long. This is a complex topic indeed, for there indeed have been vital infrastructural projects, eg, the Pune-Mumbai Expressway, seemingly completed mostly by local operators - but then many of these have foreign collaborations, or employ imported technologies, or are operating under license or franchise type of operations. The sudden rash of flyovers in the city of Mumbai, if one takes a hard look at the design and execution of the structure, shows the 'foreign hand' too. In the effervescent words of H L Mencken, sometimes the circumstantial evidence is undeniable [as when one finds trout in the milk...]. The earlier flyovers were bulky, ugly and generally executed sloppily. The sleek new designs with aesthetically pleasing pillars and columns are a sight for sore eyes, rendered sorer by soaring pollution.

The second sea change in the engineering sector was started shakily by Maruti cars, a quarter of a century ago. Now it is impossible to see those two foot soldiers of India's socialistic pretensions, Fiat and Ambassador cars, hogging the roads anywhere. It's not only a great variety of vehicles, but technologically our automobiles have taken giant leaps into the future. A decade ago, one could have sniggered at the suggestion that some of the frumpy old models could have power windows or advanced electronics for various controls.

A quiet revolution has taken place in the not so conspicuous haulage sector with trucks and buses with European designs becoming the preferred choice of the commercial operators. The obvious benefits of higher speeds, greater safety and comfort are pushing us all towards that elusive goal: 'value for money' which the Indian customer never had in the bad old days. Two wheelers have been soaring in the sky with futuristic designs and special features that were unthinkable earlier.

Those who are concerned with the core sectors, still feel that outdated technologies, inferior materials, and even short-changing phenomenon that often occur in technology transfer have not entirely vanished. The counter argument here runs smoothly: if we do not raise our own quality consciousness to much higher levels, if we do not make it a life and death question, and if we do not completely discard the 'chalta hai' attitude, such short-changing phenomena could get worse. Delay indeed breeds corruption, and delayed projects often 'make do' with whatever is being offered, making huge compromises on the crucial specifications.

But then philosophically, we are unfortunately still tripping over the age-old stumbling blocks such as:

• the core sector infrastructure aiding facilities need multi-billion dollars worth investment, which only a conglomerate of MNCs could bring in;
• without that, our products are more expensive, our exploitation of mineral wealth much less efficient; and
• overall quality remains elusive.

The cynics would argue here that MNCs on that scale would amount to the East India Co, re-entering India, having donned shiny new garbs. Perhaps - but then again, we must not forget that to remain on the outer fringes of the technologically developed world with the perennial begging bowl in our hands is not going to push us any closer to the much dreamed superpower status either. Software eagles soar in the sky but the hardware crocodiles hardly move an inch at the ground zero. This does not apply solely to IT, but a lot of others sectors too.

Here we enter the controversies better suited to politico-economic legalities and even more diffuse stuff. Perhaps an august body of eminent economists, lawmakers and enforcers and the political pundits could rally around to mark the future course. It's high time someone did that. Till then, let the MNCs come to India in their hordes and droves. Welcome.