Context: The Rise of ‘corporate nationalism’ empowers Indian companies at expense of consumers.
Instances where the Sentiments of corporate nationalism has been raised against foreign corporates?
- Amazon-Reliance Dispute: The counsel for Future Retail accused Amazon of behaving like “the East India Company of the 21st century” and calling it “Big Brother in America.”
- Whatsapp pay still pending for approval before the Supreme Court: Even though Whatsapp has obtained all requisite approvals. Multiple oppositions claim that permitting foreign entities to launch payment apps would endanger the country’s financial data. This is despite the National Payments Corporation of India’s approval of WhatsApp’s data localisation practices.
- Severe restrictions on Chinese investments: By mandating prior approval for Chinese FDI, banning several Chinese apps and restricting Chinese bidders from participating in public procurement contracts.
Why shifting the focus to the foreignness of a company for regulatory assessment is problematic?
- Foreign investors hold majority stakes in most of these “Indian” startups which make complaints of losing market share to foreign companies. For example, while complaining Amazon as a foreign company, Reliance, too, doesn’t shy away from receiving investments from Google.
- It alters the legal jurisprudence by placing the foreign identity of a party at the centre of regulatory assessments, ultimately subverting the objective of commercial laws.
- It increases the risk associated with doing business in India by creating cause uncertainty in an already chaotic legal environment.
There is no doubt that the practices of many foreign companies are suspect. Not only foreign companies, many domestic conglomerates too have equally deep pockets and more political sway than their foreign counterparts, and a questionable track record of regulatory compliance.
Indians needs to be protected from its domestic corporate giants as much as any foreign company. This can be guaranteed only if regulators and courts consciously stay true to the statutorily mandated objectives of their respective regimes.