[...] Of the various TNCs operating in India, IBM was singled out [...] 'abuse' of a bureaucratic loophole had allowed it to exert a stranglehold on the market while importing outdated, second-hand and overpriced computers for resale in India. Morever, its operations were seen as leading to a net export of foreign exchange. Dilution of the IBM subsidiary as a means of obtaining control over its activities was therefore most apposite. Control would not only curb many of IBM's economically damaging activities, it would also facilitate the country's computerisation as well as support a more favourable balance of payments.

In the end, IBM refused to dilute its stake in its subsidiary [...] IBM made a number of alternative offers - including a high export commitment from domestic production. These offers were all turned down by the Indian government. IBM - at the time the largest corporation in the world - was forced to close down its Indian operations in 1977.

However, the absence of IBM in the Indian market prompted another computer firm - Britain's International Computers Limited (ICL) - to engage in a joint venture. ICL deemed the potential commercial gain through enhanced market share as outweighing any costs attached to sharing managerial control. [...]