Non-Equity Operation of Multinational Enterprises in India: Focus on Outsourcing

Abstract

The development policy literature on multinational enterprises (MNEs) is yet to adequately analyze the emerging cross-border activities of MNEs through emerging modes of non-equity operation like international outsourcing. As a result of accelerating globalization process and growing trend of vertical disintegration of value-chains, MNEs and their foreign affiliates are increasingly sourcing raw materials, intermediates, parts and services from independent suppliers based in emerging and developing economies like India. It is, therefore, necessary that host countries like India should appreciate this non-equity operation of MNEs and formulate suitable policies for enhancing their development impacts.

Keywords: MNEs, foreign affiliates, non-equity modes, outsourcing, India