Coca-Cola and PepsiCo in India: A Question of Multinational Corporation

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Coca-Cola and PepsiCo are the two largest corporations producing soft-drinks and bottled water today, therefore having a huge impact on people all around the world. One country in particular that has been greatly affected by these two corporations is India. Raman (2007) reported that both Coca-Cola and PepsiCo were initially attracted to India for production due to it’s expanding middle-class between the end of the 1980s and early 1990s as well as the extremely cheap supply of water (p. 107). Ironically, water is what ultimately caused the start of problems within India (in Kerala specifically) which came into view around 2001. The idea of water being a human right and the power that multinational corporations hold in foreign countries of the South became huge concerns. Canadians and many others around the world use these products daily, therefore making this very relevant to our daily lives. This paper will therefore argue that Coca-Cola and PepsiCo, although thought to help India economically, has rather only caused many internal issues. Theoretical Backing Arturo Escobar and Gustavo Esteva’s post-development theory supports the argument that multinational corporations such as Coca-Cola and PepsiCo have only caused more problems in India rather than creating economic prosperity. Escobar explains that economic diversity is lost with modernization and development, which is what is happening in India. Their economy is highly based on the success of corporations within their country. The post-development theory also explains that environmental destruction is a negative result of modernization in third-world countries such as India. One of the major concerns with Coca-Cola and PepsiCo in Kerala, India are the environmental concerns, including polluted water, water depletion, and agricultural problems. The whole reason that Coca-Cola and PepsiCo have built factories in India is because it is the cheapest for them overall and there are less safety regulations. The government of India was convinced that allowing these factories to be built within their country would bring them economic prosperity (Raman, 2010, pg. 255), which has not necessarily happened. This could easily be linked to Andre Gunder Frank’s underdevelopment theory because the money that Coca-Cola and PepsiCo have made from their factories in India is immense and has brought development back to the north, however, it has only caused underdevelopment to occur within India and has brought on many internal problems. The main idea of the underdevelopment theory is that development in the Global North has caused “underdevelopment” in the Global South. It is the idea that these countries are not undeveloped, but they are still not as developed as the countries and companies exploiting them, which is the case in India. Looking at the base reasons as to why transnational corporations such as the Coca-Cola Company and PepsiCo would want to have factories in India can be linked to the theory of neoliberalism, which supports the idea of globalization and privatization. The reasons that these corporations are spreading themselves around the world is for more profit, which is an important part of neoliberalism. India itself has been becoming increasingly liberalized since the 1990s,

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