Due diligence of transnational companies in India

Abstract

Due diligence is the minimum framework for responsibility and reparation for damages in matters of human rights that may arise during and after the production processes of companies have been carried out. In other words, an alternate strategy for encouraging businesses to voluntarily engage with the externalities that their operations may create. This paper aims to evaluate the notion of due diligence in international corporations situated in India using a qualitative case study technique. In this regard, due diligence and its guiding principles are defined to assess the transparency and management responsibility of international companies in India. Then, cases related to positive and negative aspects of due diligence in this Asian country are presented. Finally, conclusions are given. The results lead to the conclusion that even though India is a desirable destination for international investments in industries like electronics, fashion, IT, finance, and the automotive sector, foreign firms have not yet demonstrated that they have complied with due diligence requirements. The most vulnerable population continues to be subjected to cycles of poverty, slavery, and mistreatment because some of the jobs paid by large corporations represent the only means of economic subsistence.