Answer:
Entry
of MNCs in a domestic market may prove harmful for small-scale producers who
are not able to compete with them. MNCs buy up local companies. The most common
route for MNCs investments is to buy up local companies and then to expand
production. MNCs with huge wealth can quite easily do so.
The large MNCs have tremendous power to determine price, quality and
labour conditions
for the small producers of other countries.
The small industries in India employ the largest number of
workers in the country next only to agriculture. Several of these units have
shut down due to tough competition by MNCs. As a result, many workers become
jobless. These days most employers prefers to employ workers flexibly. So, the
workers' jobs are no longer secure.
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