Question

Cargill Foods, a very large American MNC, has bought over smaller Indian companies such
as Parakh Foods. Parakh Foods had built a large marketing network in various parts of India,
where its brand was well-reputed. Also, Parakh Foods had four oil refineries, whose control
has now shifted to Cargill. Cargill is now the largest producer of edible oil in India, with a
capacity to make 5 million pouches daily!
[4]
26.1 The passage above relates to which of the following option? (1)
A. Foreign Investment
B. Joint ventures
C. Foreign Institutional Investment.
D. Foreign Trade

Answer 1

Answer:

Explanation:

(i) Cargill foods is a very large American MNC. It has bought over smaller Indian companies such as Parakh Foods and expanded the range of its production of edible oils in India.  

(ii) Parakh foods had built a large marketing network in various parts of India. Where its brand was well-reputed. Also Parakh foods had four oil refineries whose control has now shifted to Cargill. It has become the largest producer of edible oils in India. It refines processes and markets various edible oils for the food industry.  

(iii) Many popular brands like Sweekar, Nature Fresh, and Gemini are part of Cargill Foods.

Answer 2

The preceding text is relevant to option A, Foreign Investment.

• A significant American multinational corporation (MNC), Cargill Foods, has bought smaller Indian businesses like Parakh Foods and now controls their marketing network and four oil refineries. Cargill is now India's top producer of edible oil thanks to this purchase.

• When a foreign corporation invests in the local market of another country, the term "foreign investment" is used. It could take the shape of mergers and acquisitions, joint ventures, or the creation of a wholly-owned subsidiary, among other things. In this instance, the Indian business Parakh Foods has been purchased by Cargill Foods.

• These kinds of foreign investments may have both favourable and unfavourable effects on the home economy. On the plus side, it may result in more competition, technological transfer, and employment prospects. On the down side, it may result in the loss of control over domestic resources and markets and may cause foreign businesses to take advantage of the domestic market.

• Overall, foreign investment is a crucial component of global trade and may have a big influence on the economy of the receiving nation.

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