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Indian Investments Abroad

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Indian Investments Abroad

February, 2012

Brief Overview

India Inc's strong economic base, self-relying model and the ability to adapt are making it spread its wings to overseas markets. Indian companies are no longer shying away to look for opportunities abroad for investments or procurement or anything else. According to recent data available, there were outward foreign direct investments (FDI) from India worth US$ 25.3 billion during April-October 2011 wherein Singapore, Mauritius and the Netherlands were the favourite overseas places for investments.

Major investments, recent developments and Government measures pertaining to Indian overseas investments are discussed hereafter.

Indian Investments Abroad: Recent Developments & Investments

For the month of January 2012, overseas investments by Indian companies stood at US$ 797 million, with Tata Group, infrastructure major IL&FS and pharma major Lupin emerging as major investors.

  • Tata Steel, Tata Chemicals, L&T and Aditya Birla group flagship Hindalco has recently inked separate in-principle agreements with Kizad (Abu Dhabi government-owned industrial zone) which is establishing one of biggest industrial zones in UAE and has signed 40 deals worth US$ 10 billion. Almost half of this capital is estimated to be from Indian investors.
  • NTPC, the Government-owned power generation entity, is ready to commence its first overseas project in Bangladesh by May 2012 when the company would work on a 1,320 MW (mega watt) power plant in Khulna.
  • Indian manufacturer Jindal Steel and Power intends to spend US$ 300 million in developing new and existing mines in Africa wherein the company's subsidiary, Jindal Africa would invest US$ 250 million in developing a coalmine in Mozambique's coal-rich Moatize region and remaining funds would be used to enhance the capacity of its mine in Piet Retief. The move is part of the company's strategy to source coal assets abroad to meet raw material demand of its steel and power plants in India.
  • Ethiopia- the world's third fastest growing economy and an emerging hot-spot for Indian investments - is seeking trade tie-ups with India. The country is quite keen on investments from India in sectors such as plantation, farming, leather, textiles, steel, hospitality, food processing and education.
  • Bharti Airtel has recently launched its highly innovative mobile money platform named 'Airtel Money' in Uganda. The service, accessible to all Airtel customers in Uganda, would allow them to top up their cellphones with airtime, send and receive money, pay utility bills, access their bank accounts and even withdraw Airtel money across all inter-switch ATMs countrywide.
  • India's largest software services exporter Tata Consultancy Services (TCS) has entered into an alliance with Japan's Mitsubishi Corporation for offering full service range of IT, BPO and infrastructure services. The US$ 5 million 60:40 joint venture (JV) between TCS and Mitsubishi would lead to establishment of a near-shore delivery center in Japan.
  • Personal care and food products manufacturer Dabur India plans to invest US$ 20 million to build plants in Africa in a bid to consolidate its global presence. The company already has capacities in Nigeria and Egypt and would invest Rs 1 billion (US$ 20.3 million) over 2012-14 to build facilities in Morocco and in southern and eastern Africa.