Read the following passage and answer questions that follow.
Clamouring to enter India's red-hot retail sector, the world's largest chains, including Walmart stores, Carrefour and Tesco, are seeking the best way to enter the country, despite a government ban on foreign direct investment in the market. Recent large investments by major Indian businesses, like Reliance Industries and Bharti Airtel, have increased the sense of urgency for foreign retailers....Last week, Bharti Airtel indicated that it was in talks with Wal-Mart, Carrefour and Tesco to set up a retailing joint venture....India's retail sector is attractive not only because of its fast growth, but because family-run street corner stores have 97% of the nation's business. But this industry trait is precisely why the government makes it hard for foreigners to enter the market. Politicians frequently argue that global retailers would destroy thousands of small local players and fledging domestic chains.
Parle drinks being bought by Coca Cola is an example of:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Acquisition
Note: The given answer is as per the official NTA Answer Key. However, Option (1) can also be considered correct, as explained below.
Option (1) Liberalization — Can also be considered correct. Since the 1990s the government has followed a policy of liberalisation: private and foreign firms are encouraged to invest in sectors earlier reserved for the government, licences are no longer needed to open industries, and foreign products are easily available. The Parle–Coca Cola deal is given under this policy: as a result of liberalisation, many Indian companies have been bought over by multinationals, and the purchase of Parle drinks is the instance given of it. So the example can also be read as illustrating liberalisation. Still, liberalisation is the policy that made such takeovers possible; the purchase of one company by another is the event itself.
Option (2) Demonetisation — Incorrect. Demonetisation means withdrawing certain currency notes from use as legal money. It concerns the currency, not one company buying another.
Option (3) Globalization — Incorrect. Globalisation is the growing interdependence between people, regions and countries as economic relationships stretch world-wide. A multinational entering India is part of this wider process, but the question asks for the name of the particular event.
Option (4) Acquisition — Correct as per NTA. An acquisition is the purchase of one company by another, which then controls it. As a result of liberalisation, many Indian companies have been bought over by multinationals, and the instance given is when Parle drinks was bought by Coca Cola. Parle’s annual turnover was ₹ 250 crores, while Coca Cola’s advertising budget alone was ₹ 400 crores.
NCERT (2025-26): “Globalisation, Liberalisation and Changes in Indian Industry … Since the 1990s, the government has followed a policy of liberalisation. Private companies, especially foreign firms, are encouraged to invest in sectors earlier reserved for the government, including telecom, civil aviation, power, etc. Licenses are no longer required to open industries. Foreign products are now easily available in Indian shops. As a result of liberalisation, many Indian companies— small and large, have been bought over by multinationals. At the same time some Indian companies are becoming multinational companies. An instance of the first is when, Parle drinks was bought by Coca Cola.…” |