The Foreign Hand Business Again

Context:  Rise of ‘corporate nationalism’ empowers Indian companies at expense of consumers.

Evidences of rising corporate nationalism in India

• Build wrong narratives about foreign companies:
  • Foreign identity is used to build a narrative that doesn’t necessarily pertain to legal issue at hand.
  • E.g. Future Retail accusing Amazon of behaving like “the East India Company of the 21st century” and calling it “Big Brother in America.” 
• Create tussles for foreign companies: g. WhatsApp Pay is facing tussles despite the National Payments Corporation of India’s approval of WhatsApp’s data localisation practices.
• Accusing foreign companies: Indian apps accuse foreign app-stores being acting like “gatekeeper”
  • E.g. The founder of Paytm has called Google a “money collecting and money siphoning” machinery.
• Evoking sentiments of exploitation: Frequent references to Google as the East India Company.
• Restrictions on Chinese companies.
• Government Initiatives: Atmanirbhar Bharat and Make in India to encourage economic self-reliance and promote domestic businesses.

Problems associated with the increased corporate nationalism

• Hypocritical stand of Indian corporates:  Foreign investors hold majority stakes in most of the “Indian” startups which make impassioned complaints of losing market share to foreign companies.
• Alters legal jurisprudence: By placing the foreign identity of a party at centre of regulatory assessments, ultimately subverting the objective of commercial laws.
  • Indian entities in violation of laws escape enforcement because of their status as “domestic champions”.
• Increases the risk associated with doing business in India.
• Ignores the real problem: The focus now is on the “foreign-ness” of foreign companies rather than on their conduct.
• Exploitation of citizens by domestic corporate giants.

Conclusion: Regulators and courts must consciously separate legally relevant submissions from nationalistic rhetoric and stay true to the statutorily mandated objectives of their respective regimes.