ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Foreign Collaboration in Indian Industry

V N Balasubramanyam What has been the impact of imported technology and investment on Indian industrial productivity, exports and growth? As the Reserve Bank of India study on the subject puts it, "the major problem in this field is, for instance, whether, on balance, foreign collaboration arrangements have resulted in, or can be relied on to result in, a net gain to the country? Have those firms and industries which have relied more on technology fared better relative to the others in terms of productivity and growth?" Central to the same theme are questions such as what exactly is the nature of knowledge imported under the technical collaboration agreements? Is the knowledge imported stated to Indian conditions and prevailing factor proportions? Has the implementation of foreign techniques resulted in a higher capital-labour ratio? Is the imported knowledge restructured to suit Indian factor and product market conditions? What has been the cost of such restructuring? How best to assess the quality of knowledge imported? Is the market for knowledge a perfect one? If not, what are the costs and benefits of operating in an imperfect market for knowledge?

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