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.

16 thoughts on “History of Coca-Cola in India

  1. indeed it was the correct and meaningful input for those who really understand the the SWOT and PEST which made the Coca-Cola a successful one in the beverage industry but still a lot has to be done to make it much better in all aspect.

  2. I actually wanted to develop a simple message in order to appreciate you for all the superb tricks you are giving on this website. My considerable internet lookup has at the end been compensated with extremely good suggestions to exchange with my family and friends. I would assume that we website visitors actually are quite fortunate to exist in a really good place with many special individuals with very beneficial tactics. I feel very much blessed to have seen your entire site and look forward to plenty of more fabulous moments reading here. Thanks a lot once more for a lot of things.

  3. I have a photograph of late Prime Minister, Jawaharlal Nehru. The photograph was taken in hot sun when Panditji was seeping a cold drink holding a bottle in his hand. (I do not know which drink the the bottle contained) The picture was taken on August 18, 1956 when he visited the construction site of the New Major Port at Kandla.

    If Coca was in India in those days, the bottle could be of Coca Cola.

    If this information is of any use to you, kindly contact me.

    I have the original B & W Negative.

  4. above information has very good and we can get the glimpse of coca cola company how it has changed its policy and their interest to capture Indian market because of vast population and IFE policy was get modified

  5. The photograph was taken in hot sun when Panditji was seeping a cold drink holding a bottle in his hand

    I think Mr.Panditji was ambassador of coco cola…in 1956. 🙂

  6. This really help me in my project and give all necessary information about the coca cola company…. Thanks

  7. Can u suggest me some links about the company in mail… I am doing a research project on company from nit

  8. Pingback: AM905001 the company was affected a lot and - English Essays for Children and Students

  9. Coca Cola was started in India in the year 1950 and not 1956 as mentioned, please verify and correct.

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