New Delhi, May 9, 2020: The shocking #gasleak tragedy in Visakhapatnam, which has claimed so many innocent lives, is a can of worms for South Korea’s little-discussed business ties with India. For alert and conscious Indians, the ghastly accident virtually shines the torch on skeletons in the cupboard (read: the role of opportunistic foreign companies operating in India)
People are now busy questioning the logistics of the Vizag crisis, such as what is #styrenegas (which leaked and caused the deaths), why the polymer factory was bang in the middle of civilian settlements, did the #coronavirus #lockdown trigger the gas leak, do the ground-level operations guys have a history of negligence, will political parties intervene and try to save the company, and so on.
While these questions do need to be addressed, it is also necessary to shed some light on the South Korean company that is responsible for the tragedy and the role of South Korean companies in India in general, as foreign moneymaking entities. It is worth trying to make sense of what kind of footprint they have on Indian soil.
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#LGPolymersIndia, owned by #LGChem, runs the plant at which the accident happened on May 7. The gas that killed innocent people upon leaking was styrene, a raw material required for the South Korean company’s polymer products. #LG Polymers India now faces a clutch of very serious police cases over the deaths, whose count continues to rise.
A 2014 list put out by India’s ministry of corporate affairs on its website had said at that time that there were 109 South Korean companies actively operating in the country. That was six years back. More recently, while there’s no exact count of how many more South Korean business houses have set up shop in India, insiders reckon close to 600 South Korean companies have some kind of a toehold in the country.
600, if indeed true, or even a figure running into a few hundred, is cause for alarm, considering that there’s been a growing tendency in recent times among transnational companies or multinational companies – commonly known as MNCs – to invest in India and do business.
In theory, it’s easy to believe that it’s a welcome sign when companies from abroad come over, invest here, and set up shop. We get narrated fairytales, such as foreign companies investing money here is a boon for the nation because they end up generating growth and creating plenty of jobs. But that’s only half the story, and hence, extremely misleading for the unsuspecting Indian public.
Adding to the ‘growth’ domestically and ‘generating’ jobs are only minuscule takeaways for India as a country and as an economy. In exchange for these two minor factors, the foreign companies operating in India siphon way lot more financial wealth out of India than we can gauge or imagine.
Assuming that there are 600 or so South Korean companies in India. These companies have either invested their own money in India, or have taken loans from Indian banks to invest in their businesses here, or have gone for a combination of both.
Having set up their businesses here, from the money that they have been making from their successful businesses, they have been sending (siphoning) large chunks of it back to their own country or to tax havens in other countries.
Bottom line? An outright money drain that is perpetually costing India heavily. The initial investment for ‘growth’ and domestic ‘job generation’ are clearly dwarfed by the tendency of these foreign companies to move massive sums of money (precious financial wealth) away from India.
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This perpetual act of finance drain is a kind of resource siphoning that shows how corporate colonialism is rampant in India and steadily growing. The problem is, we don’t say it or acknowledge it in as many words.
In fact, we don’t even realise that we are going through a phenomenal amount of finance drain. Instead, we are content and comfortable with international brands hanging out among us.
Leave LG Polymers India aside and let’s focus on some of the most prominent South Korean companies that are minting money in India. Here are some of the South Korean corporate giants that are well established in the Indian heartland:
Hyundai Motor India
Hyundai Steel India
LG Electronics India
Samsung India Electronics
Hanon Automotive Systems India
IL Jin Electronics India
LG Soft India
Havmor Ice Cream (Lotte)
It’s difficult to estimate how much revenue these super-companies make from their operations in India. And it’s even more difficult to get an inkling of how much of that precious wealth generated on Indian soil is siphoned out and either reinvested in the South Korean economy or parked in banks of faraway tax-free havens.
What has happened in Vizag is extremely tragic and inexcusable. South Korea-based LG Chem, which runs LG Polymers India, needs to pay a heavy price for the disaster.
And it is a tragedy like this that gives us the scope to take a step back and look at the larger dent that the Indian economy perennially takes from foreign companies making fast bucks on Indian soil.
Will we not learn from these tragedies?
Will we never realise the need to stop this vast amount of wealth drain?
Will we only come up with knee-jerk reactions when tragedies happen and soon forget about them?
Will we keep brushing off the unintended and intended misadventures of foreign companies in India as just unconnected accidents?
Will we ever wake up to #neocolonialism?
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