India - Unilever

• Newly Emerging Economy (NEE)


  A country that is experiencing rapid economic growth and industrialisation
• Changing industrial Structure of India

  You will learn about India's changing industrial structure, and the role of TNCs in relation to development
• Transnational Corporations (TNCs)


  Companies that operate in more than one country and can be a stimulus for economic development, helping to reduce the development gap
• Since 1991, India has experienced increased investment from TNCs because of changes to government policy
• Foreign Direct Investment in India was $233 million in 1992, but by 2015 it had increased to $44 billion
• Impact of TNC investment in India

  • Factories were built
  • Secondary jobs in manufacturing were created
  • Factory workers earn more money and have a greater disposable income
  • Generates a positive multiplier effect
• Hindustan Unilever


  A major TNC operating in India
• Unilever is a UK/Dutch company that makes consumer goods including food and drink, as well as cleaning and cosmetic products
• Unilever operates in over a hundred countries around the world, and in 2009 made a profit of over 46 billion pounds
• Advantages of Unilever's investment in India


  • Provides around 16,000 jobs in India which provide a reliable income for people to use to improve their quality of life
  • Has annual sales of over $5 billion and pays high taxes to the government which can then be invested in improving levels of development, and investment in infrastructure
  • Works with charities to set up schemes like Project Shakti which helps poor women in rural areas become entrepreneurs by providing loans and products for them to sell allowing them to generate an income and reduce poverty
  • Works with charities to help hygiene education programs providing sanitation to 115 million people in India
• Disadvantages of Unilever's investment in India

  • There are concerns that TNCs take advantage of LICs by polluting the environment. In 2010 Unilever admitted causing mercury pollution in a factory making thermometers
  • TNCs may provide low pay and poor working conditions which would not be allowed in HICs
  • TNCs may close operations in LICs and NEEs, causing job losses
  • TNCs may also decide to relocate factories to take advantage of government incentives (e.g. tax breaks)
  • Some profits from TNCs leave India, e.g. Unilever is a Dutch-British company