In 1977, amid the echoes of a turbulent Emergency and the rise of an assertively nationalist economic agenda, four global giants, Coca-Cola, IBM, Kodak and Mobil, were shown the exit door from India. Their forced departures were not merely business decisions but symbolic flashpoints in a broader ideological battle: the desire to protect sovereignty versus the need to stay connected with global capital. What followed was not just their absence, but the birth of local competitors, a shift in consumer tastes, and eventually, a strategic recalibration that would see each of them return, transformed and more attuned to India’s evolving economic story.
A regulation that triggered an exodus
The trigger came in the form of the Foreign Exchange Regulation Act (FERA) of 1973. It mandated that foreign companies dilute their equity to 40% and, in certain sectors, reveal proprietary technologies and trade secrets. Enforced with new vigour under the Janata Party government, the law became a litmus test for how far foreign firms would go to stay in India.
Coca-Cola, asked to share its secret formula, chose instead to pack up. IBM was unwilling to cede control of its technology and exited. Kodak and Mobil found the regulatory and ownership constraints too stifling and followed suit. By 1978, over 50 multinationals had either left or announced plans to leave the Indian market.
The great Cola void and its aftertaste
Coca-Cola’s exit left a gaping hole in the Indian carbonated drinks market. But far from creating chaos, it unlocked opportunity. Parle Products seized the moment, launching Thums Up, positioned as a “strong cola” for “grown-ups”, with a distinctly Indian flavour profile. Pure Drinks, the former bottler for Coca-Cola, introduced Campa Cola with the patriotic tagline “The Great Indian Taste”. Even the government tried to ride the nationalist wave with “Double Seven”, a state-manufactured cola meant to capture the spirit of the Janata Party’s year of electoral victory. By the time Coca-Cola returned in 1993, the market had shifted. Instead of starting from scratch, it acquired Thums Up and Limca for $60 million, recognising that to compete in India, one had to buy into India.
IBM: From exit to IT giant
IBM’s departure was more low-key but equally consequential. At the time, its Indian business was modest, and its global strategy depended on tight control over proprietary software and systems. Its refusal to dilute equity or disclose source code led to its exit. What it left behind, however, was a vacuum in computing services, one that Indian firms began to fill. When IBM re-entered India in 1987 via a joint venture with Tata, it did so with a different playbook. Post-liberalisation, the company rapidly expanded in the IT services space. Today, India houses one of IBM’s largest global workforces.
Kodak: From film to reinvention
Kodak’s retreat from India was quieter, driven by the same constraints of foreign equity and reduced autonomy. Unlike Coca-Cola or IBM, Kodak did not return to reclaim its former stronghold in photography. Instead, its re-entry, years later, mirrored the company’s global pivot. Post-bankruptcy in the US, Kodak India now focuses on commercial printing and advanced materials, far from its original consumer-facing legacy.
Mobil: Exit during Nationalisation, return amid reforms
For Mobil, the pressure was twofold: FERA’s equity restrictions and the broader nationalisation of India’s oil sector. By 1977, most private oil refineries had been brought under government control, and Mobil exited.
Its return, decades later as part of ExxonMobil, has been in step with India’s new economic priorities. Today, it supplies liquefied natural gas (LNG), manufactures lubricants, and is setting up a greenfield plant in Maharashtra. Its Indian operations support global energy transitions, with growing local sourcing and employment.
Today, Coca-Cola’s Thums Up is a billion-dollar brand. IBM is one of the largest private employers in the country. ExxonMobil is investing in India’s energy future. Kodak has transformed from film rolls to print systems. For India, the lesson from 1977 is not that foreign firms should be kept out, but that when they come in, they must adapt, and so must the rules.