Harmful consequences of Multinational corporations

(1) Obsolete Technology: Multinational corporations often transfer outdated technology to host countries. In several cases, technology transferred was unsuitable leading to the waste of scarce capital. Repetitive imports of tech same technology ad nothing to technical knowledge in host countries. Multinationals have failed to develop local technical skills and talent.
(2) Excessive Remittance: Multinational companies extract maximum payment from their subsidiaries and collaborators in the form of royalty, technical fee, dividend, etc. They repatriate profits thereby putting severe pressures on the foreign exchange reserves and the balance of payments of host countries.
(3) Disregard of National Priorities: Multinationals don not invest funds in strategic sectors and backward regions of host countries. They select the more profitable consumer goods industries which is against the goals and priorities of developing countries. Most of the multinationals in India have entered low tech areas such as soft drinks, toilet goods, etc.
(4) Creation of Monopoly: Multinational corporations collaborate with big business houses. They give rise to monopoly and concentration of economic power in developing countries. They kill indigenous firms through superior technology and aggressive advertising. for example, foreign multinationals acquired Parle Soft Drinks and Kwality Ice Cream companies in India.