New industrial policy 1991, proposed to make Indian economy a competitive one through various changes like globalization, liberalization and privatization etc. the entire economy is becoming one globalize market. The new industrial policy is promoting foreign investment and transfer of foreign technology in India.

In consonance with government’s “new initiatives” many Indian companies have joined hands with foreign multi national corporations for starting new ventures. Multi national from USA, Canada, Europe, Australia, South Korea and Japan are found to be very keen to invest in India.

India is considered to be the biggest market in the world after China. Since India is stable and peaceful, it provides a congenial environment for safe investment on equitable terms. Multi-nationals have contributed significantly to the Indian economy by bringing foreign investment, superior technological know-how, sophisticated manufacturing process and improved skills. Their contribution to the development of Indian export is also notable. The large scale foreign investment in industries could create additional employment opportunity in the country.

The efforts of research and development undertaken by multinational also benefit the Indian industries thereby taking it to international standards. The involvement of multi- national in India has also focused upon the urgent need of up gradation of technology, sharpening the skills and improvement in productivity. It need not emphasized here that quality standards have also been drastically improved and observed more strictly. Since the entry of multi- nationals, the supporters of MNCs   justify their operations on the aforesaid grounds.

Local industries may find it difficult to compete with multi-nationals. But due to stiff competition, they have improved their quality at competitive cost and have now increased their exports also. Since India has already accepted multi-nationals, it would be prudent to maintain a watch over their activities. Multinational should be allowed after careful scrutiny and evaluation of their performance and creditability, selectively in areas where the latest technology is needed or where Indian entrepreneurs are hesitant to invest.

With the entry of multi-nationals and free trade it has proved most beneficial to Indian and our country is on the path of becoming super power in the world.