History of Coca-Cola in India

Coca-Cola came to India in the year 1956. Since India had not any foreign exchange act, Coca-Cola made huge money operating under 100% foreign equity. Indian foreign exchange act was implemented in the year 1974 during Indra Gandhi time. The foreign exchange act stated that foreign companies selling consumer goods must invest 40% of its equity stake in India in its Indian associates. Coca-Cola agreed with investing 40% foreign equity but stated that they would still hold full power in technical and administrative units with no local participation allowed.

This demand was against the foreign exchange act. The government instructed Coca-Cola to either write up a new plan or to leave the country. In 1976 Indira Gandhi called for elections and all of the other political parties formed one party in her opposition. They called themselves the Janta Party (Public Party). The Janata Party came into the power in 1977 and stressed that Coca-Cola should either accept the foreign exchange act or leave the country. Coke India left that year. After the departure of Coke company from India, George Fernandez said:-
Coke had 100% equity in India. Their investment was not much. They came into the country with Rs. 6,00,000, which at the present rate of exchange is less than $20,000. On this Rs.6,00,000 investment, they had taken out of the country, by a modest estimate, 250 million rupees (about $ 8 million) as profit in the twenty years they had been in the country.
In 1993 Coca-Cola re-entered after government approval, due to the new liberalization policies that were coming to India. The foreign exchange act which had once prevented companies from keeping too much equity had now been completely modified.

The modification made it so that companies which exceeded foreign equity by 40% of the total were to be treated on par with Indian companies. Automatic approval was to be granted for equity investment of up to 51% and for foreign technology agreements in high priority industries. Non-Indian residents and companies owned by them abroad were allowed to invest up to one hundred percent equity in high priority industries, allowing greater freedom for repatriation of capital.

In 1999, Coca-Cola bought Parle, India’s top soft drink brand, which bottled Thums up, Limca and Gold Spot. Before Coke and Pepsi re-entered India, more than 50 Indian soft-drink brands had been developed and 200 production plants set up. As time passed after Coke and Pepsi entered India, people witnessed the progressive disappearance on indigenous drinks and the demand for healthier drinks lowered as well.

London Law Researcher studies Coca-Cola in Mehdiganj

I worked with a Law Researcher from University of London as Assistant and translator. He was interested in legal perspective of Coke issue. He had already lived in India for more than a year therefore he knew a little bit of Hindi but not good enough to interview people. He is president of an NGO called Glocality International that has its office in London and New Delhi. I worked with him for three days in Varanasi.

Tyler was working on some International Law Cases also like he and his friend had sued 7 ministers of China including President and Prime Minister for killing over a million people in Tibet. He said that the case was registered in Spain because no other country was agree to accept a case in their court against Chinese Government .

We interviewed a lot of villagers, Nandlal Master and few government officials including Regional Pollution Control officer, Ground Water Authorities and District Village Committee’s officers. He was very impressed with the way Nandlal and his friends were running movement. Since he had only 3 days and he wanted to interview as much as he could, we spent one night in Lok Samiti’s office to interview Nandlal and his friends.

We had hard time with Regional Pollution Control Officer because he thought that he knew good enough English to talk Tyler therefore never wanted to use me. Tyler had already told him about me but he wanted to talk on his own. Most of the time he did not understand what Tyler was asking about but he was so confident answering. He was trying to hide everything and Tyler always wanted to get as much as he could.

There was a hot talk between Tyler and Officer. Actually Tyler had a voice recorder but he did not ask the officer before using it and finally when he came to know that Tyler was recording everything, they started yelling on us. He was threatening us by taking Police’s name. At last Tyler said that he will sue Pollution Control Department in Supreme Court of India for being corrupt with Coke issue and if Supreme Court finds it true then the Officers will be sent to Jail which made officer more angry.

Finally we came out of office laughing and talking about that creepy officer. It was really funny for me see a PCS officer getting angry on me but could not do anything. District Village Committee Officer was very much interested talking to Tyler. He explained everything he knew about Coke issue and role of Village Committees. He promised us to provide all the documents and support he could. He was first Government officer I had ever met who was really interested talking to people, may be he was interested in talking to a foreigner.