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Indian Investments Abroad

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Indian Investments Abroad

August, 2011

Brief Introduction

Liberalisation in overseas investment policy, in order to improve exports and strengthen economic linkages with foreign countries, has intensified India’s participation on the international canvas in terms of investment. Recent data released by the Reserve Bank of India (RBI) shows that overseas investments by Indian companies jumped 144 percent in 2010-11 to US$ 43.9 billion from about US$ 18 billion in 2009-10. In the first four months (April-July) of the current fiscal, there was an outward foreign direct investment (FDI) of US$ 13.26 billion.

Indian Investments Abroad - Recent Developments

To mark their presence on the global map, Indian companies are on a continuous look-out for investment destinations abroad.

For instance, home and personal care goods producers Godrej Consumer Products, Dabur India Ltd and Marico are searching for buys in the African continent.Tatas and Reliance Industries have already established themselves in foreign markets and have more than half of their revenue coming from them.

Where on one hand, the GMR Group, that built India’s best (Hyderabad) and biggest (Delhi) airports, is surveying business opportunities outside India, TVS Motors’ VenuSrinivasan is taking part of his business to China on the other. Infosys owner NR Narayana Murthy inaugurated the information technology (IT) company’s Shanghai campus in early 2011.

Overseas Investments

As per the recent RBI data, Indian companies carried out as much as 289 overseas investment transactions that resulted in outward FDI of US$ 2.69 billion during July 2011. Some of them are:

  • SanmarGroup International committed US$ 67.65 million to its Switzerland-based wholly-owned subsidiary (WoS) Sanmar Group AG. The WoS is engaged in financial, insurance, real estate and business services
  • Tata Steel infused US$ 54.63 million in its Singapore-based WoS, Tata Steel Asia Holdings Pte.
  • Crompton Greaves invested US$ 43.19 million in its WoS based in Mauritius.
  • GlenmarkPharmaceuticals committed US$ 55.47 million in its Switzerland-based manufacturing WoS, Glenmark Holdings SA in July 2011.

Apart from these players, there are many other Indian firms who are ready to venture abroad for inorganic growth.

  • Harrisons Malayalam, India’s largest rubber producer and also a major tea grower, has planned its next major investment in Africa (also the company’s first transaction overseas), of up to US$ 112 million to acquire about 10,000 acres of land
  • In May 2011, Gammon India invested US$ 1.83 billion in Campo Puma Orient in Panama
  • Agriculture and specialty chemical company United Phosphorus has acquired 51 per cent stake in Brazilian company DVA Agro Do Brasil for about US$ 150 million. The DVA Agro deal is the second acquisition made by United Phosphorus in Brazil in four months after acquiring 50 per cent stake in SipcamIsagroBrasil SA.
  • Tata Motors has opened a new plant in South Africa for the assembly of commercial vehicles in a bid to support increasing volumes in the continent. The entity has invested INR 72 crores (US$ 16.25 million) to launch the plant with an annual manufacturing capacity of 3,650 vehicles.
  • Essar Group’s global outsourcing services arm Aegis plans to make its debut in the UK and European markets, generating 600 new jobs in Manchester. Further expansion across various countries in Continental Europe is on the cards, where a number of additional customer service centres will be opened by 2013.