Indian companies are increasingly buying up companies abroad as strategic acquisition, indicating the growing competitiveness of the Indian corporate sector. India retained its position as the second highest foreign employer in the UK, after the US, according to the 2009 UK inward foreign direct investments (FDI) official data released in June 2009. In 2008-09, Indian investors created 4,149 new jobs, with 108 new projects, up 44 per cent from 2007-08.
According to the data published in the Reserve Bank of India (RBI) Bulletin, the direction of investment proposals during April-December 2009 indicated Singapore, Mauritius, the US, British Virgin Islands and Netherlands together accounted for 71 per cent of India's outward FDI proposals (US$ 5 million and above). During April- December 2009, the shares of Singapore, Sudan, Mauritius, the British Virgin Islands and the UAE in India's outward FDI have increased while those of the US, the Netherlands and the UK have declined. Singapore continues to be the leader with investment worth US$ 5,162 million during April-December 2009, comprising nearly 37 per cent of the total outward FDI. The actual outward FDI in joint ventures (JVs) and wholly-owned subsidiaries (WOSs) stood at US$ 8.4 billion during the period April-December 2009. Of the total amount of investments, 70 per cent was in the form of equity, and most of the remaining amount comprised of loans, while a small amount under invoked guarantees.
India has been witnessing a surge in outward investment with the number of approved projects on the rise.
During the first three quarters of 2009- 10 (April-December 2009), 2,984 proposals amounting to US$ 14.3 billion were cleared for investments abroad in JVs and WOSs. The number of proposals recorded an increase of 5.5 per cent over the corresponding period last year.
Equity accounted for 49 per cent of the proposals for investment, followed by guarantees (28.6 per cent) and loans (22.4 per cent). During the corresponding period of the previous year (April-December 2008), equity constituted 67.2 per cent of the proposals for investment, while loans and guarantees formed 18.7 per cent and 14.1 per cent, respectively. The overall investment proposals during April-December 2009 indicated that about 94 per cent of the amount was for investments of US$ 5 million and above. Sector-wise, 42 per cent of the amount of proposals was in manufacturing, followed by non-financial services (9 per cent), trading (5 per cent), financial services (1 per cent) and the balance was 'others'.
The pattern of investment proposals during April-December 2009 revealed that financial services and non-financial services maintained their shares in the total amount of proposals.