Established by John Stith Pemberton in 1886, the Coca-Cola Company has been around us for a very long time. It is one of the largest soft-drinks companies in the world and has been integral to the growth of consumer capitalism owing to its greater reach across the globe.
Coca-Cola entered the Indian market in the 1950s, at a time when capitalism was spreading around the world. However, India was striving to establish a socialist republic, following the socialist sentiments of the Indian national movement.
Coca-Cola has been known as one of the largest capitalist conglomerates and has been criticized for its exploitative nature. In fact, in 2001, the Coca-Cola plant in Kerala was accused of leaving farmlands poisoned and parched due to its huge water demand.
How did Coca-Cola manage to establish itself in India?
Coca-Cola has been an integral part of the Indian economy. However, one can also interestingly locate it as a checkpoint in identifying how the political and economical inclination of India has changed post-independence.
Coca-Cola Comes To India (Socialism)
Coca-Cola established its first company in New Delhi in 1956. Since India did not have a Foreign Exchange Act at that time, it operated under 100% equity. The freedom struggle had communist influences and undertones of socialist reforms. This meant that local businesses would get more importance and the market would be centralised.
However, Jawaharlal Nehru proposed a mixed economy in the Industrial Policy Resolution of 1948. In fact, the first five-year plan centralised industrial development, as India’s world income percentage had dropped to 3.2% in 1951 by the time Britishers left.
The Bombay Plan, proposed by a panel including JRD Tata, was soon incorporated into Nehruvian democracy, which emphasised protecting indigenous industries while also paving way for a government-controlled public sector that put away the fear of socialism’s distaste for private property.
This permitted companies such as Coca-Cola to come to India. Far-left groups have criticized these plans for being covertly capitalistic. However, the growth of MNCs in India only increased after the second five-year plan as it emphasised heavy industrialisation.
When Indira Gandhi Became The Prime Minister (Fall Of Democracy)
Indian democracy witnessed swift changes under her leadership. Coca-Cola had become entrenched in Indian society at the time.
However, after the wars with China and Pakistan along with the state of Emergency, the new socialist government was forced to make certain changes.
Indira Gandhi had been bitter about first-world countries at the time. She enacted the Foreign Exchange Act that necessitated foreign companies to invest 40% of its equity stake in India.
The Janata Party, along with her, gave them a referendum, including that they would have to share the recipe with other companies, which they refused. As a result, Coca-Cola was kicked out of India in 1977.
Local Indian industries thrived at that time. They quickly got into the competition, and the end of Emergency was marked by the establishment of a state-run cola company called Double Seven.
The Liberalisation Of The Economy 1991 (Capitalism)
It intended to reduce government intervention in business and open up India to the global economy. India was farther away from Nehruvian legacy.
Coca-Cola came back again, acquiring almost other small soda companies – in 1999, it bought Parle along with Limca, Thumbs Up and Gold Spot. Its only other competition is Pepsi. It now has around 200 plants in India today and the trust of a million Indians.
India’s small indigenous drinks companies disappeared slowly, and today, we live in a treasure trove of MNCs while we share hashtags such as #supportlocalbusinesses.
Coca-Cola has managed to keep a friendly brand image, making it part of our everyday lifestyle and culture – sipping on coke while watching movies, relieving your thirst on a hot day and pampering your sweet tooth.
However, it is also important to keep in mind that it is just another company profiting off our consumer greed.
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