Industrial policy of India Why Economic Policy 1991

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Industrial policy of India

Industrial policy of India

Why Economic Policy 1991 ? �The Indian currency, the rupee, was inconvertible and high

Why Economic Policy 1991 ? �The Indian currency, the rupee, was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market. � India also operated a system of central planing for the economy, in which firms required licenses to invest and develop.

Why Economic Policy 1991 • Restriction on Private Investment • Socialism • Mixed Economy

Why Economic Policy 1991 • Restriction on Private Investment • Socialism • Mixed Economy Internal debt liability increased to 53% of GDP.

Features of the policy �Integration with world economy with. dismantling of tariff wall. �Protection

Features of the policy �Integration with world economy with. dismantling of tariff wall. �Protection of foreign direct investment. �upgrading the technology of production. �Financial stability. �Outward looking policies. �Deregulation of domestic market.

Features of the policy �Correcting the disequilibrium in foreign exchange market through demand reduction.

Features of the policy �Correcting the disequilibrium in foreign exchange market through demand reduction. �Reform in trade policy �Reduction in fiscal deficit �Dismantling of barrier to free flow of capital. �Depreciation of exchange rate.

Components of Economic policy Exchange rate. Trade and industrial policy. Policies concerning the public

Components of Economic policy Exchange rate. Trade and industrial policy. Policies concerning the public sector. financial sector. Capital market.

Outcome of Economic policy �Liberalization �Privatization �Globalization

Outcome of Economic policy �Liberalization �Privatization �Globalization

Effect of economic policy (positive) � Increase in GDP growth rate �Increase in foreign

Effect of economic policy (positive) � Increase in GDP growth rate �Increase in foreign direct investment �Increase in foreign exchange � Fulfilled a long-felt demand of the corporate sector for declaring in very clear terms that licensing was abolished for all industries except 18 industries which included coal, petroleum, sugar, motor cars, cigarettes, hazardous, chemicals, pharmaceuticals and some luxury items

Effect of economic policy (positive) �Increase in per capita income �Increase in foreign trade.

Effect of economic policy (positive) �Increase in per capita income �Increase in foreign trade. (Import, Export, FDI, FII, Merger ) �Increase mobility of factor of production �Outsourcing

Effect of economic policy (negative) �Growing unemployment �Neglect of agriculture �Growing personal disparities �Infrastructural

Effect of economic policy (negative) �Growing unemployment �Neglect of agriculture �Growing personal disparities �Infrastructural inadequacies �Wide spread poverty.

Effect of economic policy (negative) �Demonstration effect (luxury goods) �Indian small scale industries badly

Effect of economic policy (negative) �Demonstration effect (luxury goods) �Indian small scale industries badly affected �Failure of MRTP to break the monopolistic or Oligopolistic character of the Indian market

MEANING: INDUSTRIAL POLICY Industrial policy means rules, regulations , principles , policies , and

MEANING: INDUSTRIAL POLICY Industrial policy means rules, regulations , principles , policies , and procedures laid down by government for regulating , developing and controlling industrial undertakings in the country. It prescribes the respective roles of the public, private joint and cooperative sectors for the development of industries. It also indicates the role of the large , medium , and small sector . It incorporates fiscal and monetary policies, tariff policy , labour policy and the government attitude towards foreign capital, and role to be played by multinational corporations in the development of the industrial sector.

�The spread of industrialization to backward areas of the country will be actively promoted

�The spread of industrialization to backward areas of the country will be actively promoted through appropriate incentives, institutions and infrastructure investments. �Foreign investment and technology collaboration will be welcomed to obtain higher technology, to increase exports and to expand the production base. �Abolish monopoly �Workers’ participation in management will be promoted

MEANING �Rules, regulations, procedures, laid down by government for regulating , developing and controlling

MEANING �Rules, regulations, procedures, laid down by government for regulating , developing and controlling industrial undertakings in the country. �It incorporates fiscal & monetary policies, tariff policy, labour policy & Govt attitudes towards foreign capital & also the role to be played by multinational corporations in the development of the industrial sector.

OBJECTIVES

OBJECTIVES

OBJECTIVES OF NEW INDUSTRIAL POLICY Attainment of international competitiveness. Revival of weak units. Development

OBJECTIVES OF NEW INDUSTRIAL POLICY Attainment of international competitiveness. Revival of weak units. Development of backward areas. Full utilization of plant capacities to generate employment. Encouraging competition within Indian industry. Efficient use of productive resources.

INDUSTRIAL POLICY 1991 � Govt. recognizes the need for �social and economic justice, to

INDUSTRIAL POLICY 1991 � Govt. recognizes the need for �social and economic justice, to end poverty and unemployment and to build a modern, democratic, socialist, prosperous and forward-looking India �India to grow as part of the world economy and not in isolation �Greater emphasis placed on building up ability to pay for imports through our own foreign exchange earnings � development and utilization of indigenous capabilities in technology and manufacturing as well as its up gradation to world standards.

INDUSTRIAL POLICY 1991 �Sound policy framework encompassing encouragement of entrepreneurship, development of indigenous technology

INDUSTRIAL POLICY 1991 �Sound policy framework encompassing encouragement of entrepreneurship, development of indigenous technology through investment in research and development, bringing in new technology, dismantling of the regulatory system, development of the capital markets and increasing competitiveness for the benefit of the common man.

INDUSTRIAL POLICY 1991 �The spread of industrialization to backward areas of the country will

INDUSTRIAL POLICY 1991 �The spread of industrialization to backward areas of the country will be actively promoted through appropriate incentives, institutions and infrastructure investments. �Government will provide enhanced support to the small-scale sector so that it flourishes in an environment of economic efficiency and continuous technological up gradation

INDUSTRIAL POLICY 1991 �Foreign investment and technology collaboration will be welcomed to obtain higher

INDUSTRIAL POLICY 1991 �Foreign investment and technology collaboration will be welcomed to obtain higher technology, to increase exports and to expand the production base. Government will endeavor to abolish the monopoly of any sector or any individual enterprise in any field of manufacture, except on strategic or military considerations and open all manufacturing activity to competition.

INDUSTRIAL POLICY 1991 �The Government will ensure that the public sector plays its rightful

INDUSTRIAL POLICY 1991 �The Government will ensure that the public sector plays its rightful role in the evolving socioeconomic scenario of the country. Government will ensure that the public sector is run on business lines as envisaged in the Industrial Policy Resolution of 1956 and would continue to innovate and lead in strategic areas of national importance.

INDUSTRIAL POLICY 1991 �Government will fully protect the interests of labour, enhance their welfare

INDUSTRIAL POLICY 1991 �Government will fully protect the interests of labour, enhance their welfare and equip them in all respects to deal with the inevitability of technological change Labour will be made an equal partner in �progress and prosperity �Workers’ participation in management will be promoted

INDUSTRIAL POLICY 1991 �Workers cooperatives will be encouraged to participate in packages designed to

INDUSTRIAL POLICY 1991 �Workers cooperatives will be encouraged to participate in packages designed to turn around sick companies. �The major objectives of the new industrial policy package will be to build on the gains already made, correct the distortions or weaknesses that may have crept in, maintain a sustained growth in productivity and gainful employment and attain international competitiveness.

INDUSTRIAL POLICY 1991 �Need to preserve the environment and ensure the efficient use of

INDUSTRIAL POLICY 1991 �Need to preserve the environment and ensure the efficient use of available resources. �Government’s policy will be continuity with change

FEATURES OF NIP � De-reservation of Public Sector: The number of industries reserved for

FEATURES OF NIP � De-reservation of Public Sector: The number of industries reserved for public sector was reduced to 8 industries. At present, there are only three industries reserved for public sector which include. (A) Atomic energy (b) Railways, and (c) specified Minerals. � De-licensing: -The most important features of NIP, 1991 was the abolition of industrial licensing of all industries except six industries. The six industries are of social and strategic concern. The six industries are 1. Hazardous Chemicals. 2. Alcohol 3. Cigarettes 4. Industrial Explosives 5. Defense Products, and 6. Drugs. � Disinvestment of public sector: -The NIP 1991 permitted disinvestment of public sector units. Disinvestment is a process of selling government equity in PSUs in favour of private parties. Disinvestments aim at certain objectives. (1) To provide better customer Service. (2) To make effective use of disinvestment funds. (3) To overcome the problem of political interference. (4) To enable the government to concentrate on social development.

FEATURES OF NIP, 1991 (cont…. . ) � Foreign Technology Agreements: Automatic permission will

FEATURES OF NIP, 1991 (cont…. . ) � Foreign Technology Agreements: Automatic permission will be given foreign technology agreements in high priority industries up to a lump sum payment of Rs. 1 crore, 5% royalty for domestic sales and 8% for exports, subject to total payment of 8% of sales over a 10 year period from date of agreement or 7 years from commencement of production. No permission will be necessary for hiring of foreign technicians, foreign testing of indigenously developed technologies. � MRTP Act: Emphasis will be placed on controlling and regulating monopolistic, restrictive and unfair trade practices. Simultaneously, the newly empowered MRTP Commission will be authorized to initiative investigations on complaints received from individual consumers or classes of consumers in regard to monopolistic, restrictive and unfair trade practices.

FEATURES OF NIP, 1991 (cont…. . ) � Public Sector Policy : The priority

FEATURES OF NIP, 1991 (cont…. . ) � Public Sector Policy : The priority areas for growth of public enterprises in the future will be the following: Ø Essential infrastructure goods and services. Ø Exploration and exploitation of oil and mineral resources. Ø Technology development and building of manufacturing capabilities in areas which are crucial in the long term development of the economy and where private sector investment is inadequate. Ø Manufacture of products where strategic considerations predominate such as defense equipment.

FEATURES OF NIP, 1991 (cont…. . ) �Promoting small scale industries: the new industries

FEATURES OF NIP, 1991 (cont…. . ) �Promoting small scale industries: the new industries policy for the small sector industries was announced on 6 th august, 1991. the most important features are: Ø the new policy provides for the supply of raw materials and marketing facilities to the ssi units. as for marketing , the policy envisages market promotion of their products be undertaken by co-opratives, public sector institutions and other professional agencies Ø Widening and deepening the complementarity in the production programmes of large, medium and small sectors. This will be ensured through production of parts , components, etc. which are required by the large public and private industries.

FEATURES OF NIP, 1991 (cont…. . ) Ø The investment limit in any plant

FEATURES OF NIP, 1991 (cont…. . ) Ø The investment limit in any plant or industry in a unit has been raised from rs. 5 lakh to rs. 25 lakh to provide for the increase in the prices of capital goods Ø special measures have been taken for handloom, handicrafts, khadi and village industries.

INDUSTRIAL POLICY 1991 A. B. C. D. E. In pursuit of the above objectives,

INDUSTRIAL POLICY 1991 A. B. C. D. E. In pursuit of the above objectives, Government have decided to take a series of initiatives in respect of the policies relating to the following areas: Industrial Licensing. Foreign Investment. Foreign Technology Agreements. Public Sector Policy. MRTP Act.

A. Industrial Licensing: q Industrial licensing abolished for all projects except a short list

A. Industrial Licensing: q Industrial licensing abolished for all projects except a short list of 18 industries related to security and strategic concerns, social reasons, hazardous chemicals etc. q Areas where security & strategic concerns predominate, reserved for public sector. q In projects where imported capital goods are required, automatic clearance given. q In locations other than cities of more than 1 million population, no requirement of obtaining industrial approvals from Central Government. q Incentives & investments in infrastructural development, to promote dispersal to rural and backward areas. q Existing units enabled to produce any article without additional investment.

Comprehensive list for which industrial licensing is compulsory: Coal and Lignite Petroleum (other than

Comprehensive list for which industrial licensing is compulsory: Coal and Lignite Petroleum (other than crude) and its distillation products. Distillation and brewing of alcoholic drinks Sugar Animal fats and oils, partly or wholly hydrogenated Cigars and cigarettes of tobacco and manufactured tobacco substitutes Asbestos and asbestos-based products Plywood, decorative veneers, and other wood-based products such as particle board, medium density fiber board, and black-board Raw hides and skins, leather chamois and patent leather

Tanned or dressed fur skins Motor cars Paper and Newsprint except baggase -based units

Tanned or dressed fur skins Motor cars Paper and Newsprint except baggase -based units (i. e. except units based on minimum 75% pulp from agricultural residues, bagasse and other non conventional raw materials) Electronic aerospace and defence equipment: all types Explosives including detonating fuses, safety fuses, gunpowder, nitrocellulose and matches Hazardous chemicals Drugs and Pharmaceuticals (according to Drug Policy) Entertainment electronics (VCR's, color TV's, CD players, tape recorders) White goods (domestic refrigerators, domestic dishwashing machines, programmable domestic washing machines, microwave ovens, air conditioners)

INDUSTRIAL POLICY 1991 B. Foreign Investment: q Approval upto 51 percent foreign equity in

INDUSTRIAL POLICY 1991 B. Foreign Investment: q Approval upto 51 percent foreign equity in high priority industries q Imports governed by general policy applicable to other domestic units, payment of dividends monitored by RBI to ensure that outflows on account of dividends are balanced by export earnings. q Other foreign equity proposals, not covered above, need prior clearance. q A special Empowered Board- to negotiate with a number of large international firms & get FDIs approved.

INDUSTRIAL POLICY 1991 C. Foreign Technology Agreements: q Automatic permissions foreign technology agreements in

INDUSTRIAL POLICY 1991 C. Foreign Technology Agreements: q Automatic permissions foreign technology agreements in high priority industries up to a lump sum payment of Rs. 1 crore. q For industries other than those in automatic permissions if no foreign exchange is required for payment q All other proposals need specific approval q No permission foreign technicians, foreign testing of indigenously developed technologies.

INDUSTRIAL POLICY 1991 D. Public Sector Policy: q Portfolio of public sector investments reviewed

INDUSTRIAL POLICY 1991 D. Public Sector Policy: q Portfolio of public sector investments reviewed with a view to focus public sector on strategic, high tech & essential infrastructure. q Chronically sick public enterprises, referred to Board of Industrial & Financial Reconstruction (BIFR). q A part of government’s shareholding in public sector offered to mutual funds, financial institutions, public & workers. q Boards of public sector companies- more professional & powerful. q MOU system- managements would be granted greater autonomy & held accountable.

INDUSTRIAL POLICY 1991 E. MRTP Act: (Monopolistic Restrictive Trade Practices): q Removal of threshold

INDUSTRIAL POLICY 1991 E. MRTP Act: (Monopolistic Restrictive Trade Practices): q Removal of threshold limits of assets in respect of MRTP Companies & dominant undertakings. q Elimination of need of prior approval of Central Government for establishment, expanding, merger, amalgamation & takeover. q Emphasis on controlling & regulating monopolistic, restrictive & unfair trade practices. q Enabling the MRTP Commission to exercise punitive & compensatory powers.

POSITIVES & WATCH-OUTS Watch-outs: �The bureaucracy has a tendency to attempt to defeat measures

POSITIVES & WATCH-OUTS Watch-outs: �The bureaucracy has a tendency to attempt to defeat measures aimed at deregulations. �Foreign investors still regard the policy and procedural system in India still confusing. Rather many feel that the policy & development of china environment is superior to India. �Distortion of Industrial pattern occured due to slow pace of investment in few basic and strategic industries. �Absence of mechanism slow down the development of backward areas.

POST 90 s-THE REFORM PHASE Major reforms took place in 2002 -2007 q Reforms

POST 90 s-THE REFORM PHASE Major reforms took place in 2002 -2007 q Reforms in International Competition: Removal of quantitative restrictions in imports. q Decline in role of Public Sector : Disinvestment process converted many of the existing public sector enterprises into non governmental enterprises.

RECENT DEVELOPMENTS � Allowed 51% FDI in Multi Brand Retail and 100 FDI in

RECENT DEVELOPMENTS � Allowed 51% FDI in Multi Brand Retail and 100 FDI in Single Brand retail. � It has relaxed rules to allow foreign airlines to invest up to 49% in Indian carriers. Till now any foreign company except an airline could buy stake upto 49 per cent in an Indian airline. This move expected to help bring muchneeded cash flow to India's bleeding private airlines. � The Cabinet Committee on Economic Affairs also hiked the cap on foreign investment in the broadcast sector to 74 per cent. Earlier, 49 per cent FDI was allowed in cable TV and direct-to-home segments, and 74 per cent in head-end in the Sky (HITS).

RECENT DEVELOP…(cont’d) � The government also approved sale of its minority stakes in four

RECENT DEVELOP…(cont’d) � The government also approved sale of its minority stakes in four public sector firms -- Hindustan Copper, Oil India, MMTC and Nalco-- to raise up to Rs. 15, 000 crore.

Critical evaluation of new industrial policy 1991 �Positive effects on the economy: Ø increase

Critical evaluation of new industrial policy 1991 �Positive effects on the economy: Ø increase production: foreign investment and foreign technology agreements are designed to attract capital, technology and managerial expertise from abroad. This inflow of foreign investment and better technology will help to raise production . These resources will be more effectively allocated so that industrial production will increase. Ø Increase competition: easy entry of multinational companies , removal of asset limit on mrtp companies, liberal licensing will increase competition in our economy. Competition will result in more efficiency , better quality of products and lower prices.

Critical evaluation of new industrial policy 1991 [cont…. . ] Ø Increase efficiency of

Critical evaluation of new industrial policy 1991 [cont…. . ] Ø Increase efficiency of public sector: the reduction in number of industries reserved for public sector from 17 to 3 and that threat of closure of sick public sector enterprises would result and raise in their efficiency. Measures like professional management and greater autonomy are expected to improve performance of public sector enterprises. Ø Increase exports: in the nip 1991, export-oriented units are given various concessions like liberal loans , setting up of special economic zone, liberal import of capital goods , raw materials, technology, etc. all this will help to achieve balanced regional development.

Critical evaluation of new industrial policy 1991 [cont…. . ] Ø Reduce economic burden

Critical evaluation of new industrial policy 1991 [cont…. . ] Ø Reduce economic burden on government: area of public sector has been reduced drastically. now only 3 areas are reserved for public sector. All other areas have been opened for private sector. Sick units are either closed or open to private sectors. All of this has reduced the economic burden on the government. Ø Bring balanced regional development: in nip 1991, special provisions have been made to set up big industries in backward regions. Industries located in backward regions are given various incentives. All this will help to achieve balanced regional development.

Critical evaluation of new industrial policy 1991 [cont…. . ] Ø Give more significance

Critical evaluation of new industrial policy 1991 [cont…. . ] Ø Give more significance to small scale industries: the new industrial policy provided for the first time a separate strategy for the growth of small -scale and cottage industries. This strategy incorporates several measures for promoting and strengthening small, tiny, village enterprises. Nip 1991, will provide enhanced support to the small scale sectors so that they flourish in an environment of economic efficiency and continuous technological up gradation.

Critical evaluation of new industrial policy 1991 [cont…. . ] �Main points of criticism

Critical evaluation of new industrial policy 1991 [cont…. . ] �Main points of criticism of nip 1991: Ø Leads to more concentration of economic power: the amendment of the mrtp act to remove threshold limit f assets in respect of mrtp companies and confining only to the malpractices of the business houses means no concern for the size of the companies. this provision is counter Ø Lead to less regional balance: the objectives of reducing inequalities in the industrial development of different regions or states will remain a distant dream. This is obvious from the fact that while liberalizing of licensing procedures gives the freedom to set up any industry and the locational policy shows concern about the big cities (over 1 million population) and rural and backward areas; it is without least regard for the regional balances. As such, the nip goes against the objectives of ensuring regional balance.

Critical evaluation of new industrial policy 1991 [cont…. . ] �Lead to excessive competition

Critical evaluation of new industrial policy 1991 [cont…. . ] �Lead to excessive competition for small sector: in nip, , the market forces fostered by DE licensing unrestricted growth of monopolies, easy entry of foreign direct investment and technology etc. , is very likely to affect adversely. The small sector. The large sector, by turning small units, may corner most of the benefits. �Increase unemployment: rather than increasing employment, the nip may actually worsen it. foreign investment along with foreign technologies that the nip allows freely, can do little to raise employment because these are capital- intensive in nature

Critical evaluation of new industrial policy 1991 [cont…. . ] �Raise threat from foreign

Critical evaluation of new industrial policy 1991 [cont…. . ] �Raise threat from foreign companies: in the new liberalized scenario that has emerged in the post-1991 reform phase, Indian businessman are facing unequal competition from mnc’s. unequal competition is due to number of reasons : a) Indian companies suffers from ‘size disadvantages’ as they are very small in comparison of mnc’s. b) The cost of capital to indian business is much higher than the mnc. c) The indian enterprises are very weak financially in comparison with mnc

Critical evaluation of new industrial policy 1991 [cont…. . ] �LEAD TO LITTLE RESEARCH

Critical evaluation of new industrial policy 1991 [cont…. . ] �LEAD TO LITTLE RESEARCH AND DEVELOPMENT: VARIOUS POLICY PRONOUNCEMENTS OF THE GOVERNMENT IN RECENT YEARS INDICATE THAT IT EXPECTS FOREIGN INVESTMENT TO HELP TECHNOLOGICAL UPGRADATION OF THE INDUSTRIAL SECTOR AND PUSH UP EXPORT EARNING. HOWEVER , THIS FAITH IN FOREIGN INVESTMENT IS MISPLACED. AS POINTED BY H. K. PARANJAPE , NONE OF THE MNC OPERATING IN THIS COUNTRY HAVE ATTEMPTED TO DEVELOP INDIA AS AN IMPORTANT BSE FOR A ISGNIFICANT PART OF ITS WORLD-WIDE RESEARCH AND DEVELOPMENT WORK.

INDUSTRIAL POLICIES Industrial policy resolution of 1991 Industrial policy resolution of 1948 Industrial policy

INDUSTRIAL POLICIES Industrial policy resolution of 1991 Industrial policy resolution of 1948 Industrial policy resolution of 1980 Industrial policy resolution of 1956 Industrial policy resolution of 1977 Industrial policy resolution of 1973

SUMMARY: o MAJOR FEATURES OF NIP 1991: 1. INDUSTRIAL LICENCING: IT IS NOW COMPULSARY

SUMMARY: o MAJOR FEATURES OF NIP 1991: 1. INDUSTRIAL LICENCING: IT IS NOW COMPULSARY IN ONLY 5 INDUSTRIES- ALCHOHOL, CIGRETTES, HAZARDOUS CHEMICALS, ELECTRONICS, AEROSCAPE AND DEFENCE EQUIPMENTS. 2. PUBLIC SECTOR POLICY: NOW ONLY 3 INDUSTRIES ARE RESERVED FOR PUBLIC SECTOR-ATOMIC ENERGY, MINERALS SPECIFIED IN THE SCHEDULE OF THE ATOMIC ENERGY (CONTROL OF PRODUCTION AND USE) ORDER 1953, AND RAIL TRANSPORT. 3. MRTP: LIMIT HAS BEEN ABOLISHED. 4. MANY STEPS HAS BEEN ANNOUNCED TO PROMOTE FOREIGN INVESTMENT AND TECHNOLOGY. 100 PERCENT FOREIGN INVESTMENT IS NOW ALLOWED. FDI IS PROHIBITED ONLY IN THE FOLLOWING 0 SECTORS: (1). RETAIL SECTOR(EXCEPT SINGLE BRAND PRODUCT RETAILING); (2) ATOMIC ENERGY; (#) LOTTERY BUSINESSAND ($) GAMBLING AND BETTING.

SUMMARY: 5. SMALL SCALE SECTOR HAS BEEN PROMOTED. o CRITICAL EVALUATION OF NIP[ 1991

SUMMARY: 5. SMALL SCALE SECTOR HAS BEEN PROMOTED. o CRITICAL EVALUATION OF NIP[ 1991 Ø SOME MERITS OF NIP 1991 ARE: 1. 2. 3. 4. 5. 6. 7. INCREASE IN PRODUCTION INCREASE IN COMPETITION INCREASE IN EFFICIENCY OF PUBLIC SECTOR INCREASE IN EXPORTS REDUCTION IN ECONOMIC BURDUN ON GOVERNMENT BALANCED REGIONAL DEVELOPMENT MORE SIGNIFICANCE GIVEN TO SMALL SCALE INDUSTRIES

SUMMARY: Ø SOME CRITICISM OF NIP 1991 ARE: 1. IT WILL LEADS TO MORE

SUMMARY: Ø SOME CRITICISM OF NIP 1991 ARE: 1. IT WILL LEADS TO MORE CONCERNTRATION OF ECONOMIC POWER 2. IT WILL LEAD TO LESS REGIONAL BALANCE 3. IT WILL LEAD TO EXCESSIVE COMPETITION FOR SMALL SECTOR 4. IT WILL INCREASE UNEMPLOYMENT 5. IT WILL THREAT FROM FOREIGN COMPANIES 6. IT WILL LEAD TO LITTLE RESEARCH AND DEVELOPMENT.