Multinational corporations MNC are huge industrial organization which extender industrial and marketing operation over a number of countries. They are also known as transnational corporations, international corporations and global corporations. Multinational corporations may be defined as large business corporation control predominantly by nationals of the countries in which their headquarters are situated, but with operating activities spread across many different countries employing tens of thousands of people. The importance of MNCs are.

Importance of MNCs:

• MNC’s are financially very strong and hence provide large and chief capital by way of direct investment
• they undertakes great risk in investing their funds in different countries in the  phase of imperfect infrastructure facilities like power, transport, skill labour etc low market demand and short supply of inputs.
• They start new venture and bestow the advantage of superior management training education and entrepreneur ability in India.
• The transfer superior technology in India and they are able to spend huge funds this leads to the discovery and introduction of new process and new and differentiate products in India which tend to rise the standard of living of the people in India.
• They bring in new techniques of marketing in India through market research at their headquarters, they adopt novel advertising and promotional methods which impact information to buyers and create demand for particular brands and products. this encourages competition.
• They are desirable because they lead for a net increase in capital information output and employment in a situation where a country is already faced with heavy debt servicing burden, further borrowing by it way  only push it what may be called debt trap. Private investment will help it get necessary foreign exchange resources whereas it will help avoid adding to the debt servicing burden.
• They also help in creating large scale employment opportunities by setting their branches and subsidiaries in the host country.
• The operations of MNCs have a force able effect on the balance of payment in India

Problems or demerits or disadvantages of MNCs:

• Multinational Corporation has come to be regarded as agents of exploitation because of their invidious operation. They insist on percent ownership with low rates of taxation.
• They are primarily profit oriented they are not concern with an overall economic development of the host country.
• They bring in their own technology which is usually capital intention which is not suitable to India.
• The transfer of technology proves extremely costly they change exorbitantly in the form of charges, fees.
• Foreign remittance on account of royalties, technical knowhow and professional service etc put a severe drain on the foreign exchange resources in India.
• They promote regional economic disparities by selling up their plants in big cities where infrastructure easily available.
• They persecute MNC may prove detrimental to the long run industry development of the country. If a strong MNC is operating in a particular field the local firm may find its difficulty to compete with it.
• In their business operation in the production of mass consumption and non essential items.
• They established ventures in India to exploit the cheap labour available.
• The staff which comes in the wake of an MNC is paid very high salary which leads for higher prices.
• They transfer often second rate and over priced technology.

also read: explain the merits and demerits of FDI.