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Indian Investments Abroad

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Indian Investments Abroad

August, 2012

Brief Overview

Signalling an increase in global participation and competence, India is profoundly becoming a source of foreign investment for rest of the world. As per the ongoing trend, wherein emerging market economies (EMEs) are under transition, a number of private players, along with state-owned entities, are increasingly expanding their footprints in foreign lands through direct investments with a view to achieve regional and global reach.

Indian economy's integration with the rest of the world has given domestic corporate sector access to global networks and markets, transfer of technologies and skills and has also facilitated research and development (R&D) for value addition. India Inc's foreign investments have primarily been driven by either resource seeking or market seeking or technology seeking motives. Talking about the recent times, Indian companies are increasingly investing overseas for resource acquisitions, especially to buy energy resources in Australia, Indonesia and Africa.

Key Statistics

Overseas direct investments by India Inc stood at US$ 1.24 billion for July 2012, according to data released by the Reserve Bank of India (RBI). The equity investment rose to US$ 436.14 million while the total loan amount increased to US$ 341.12 million through as many as 459 deals. Major investors like JSW Steel, Bharti Airtel, Tata Steel, Global Green Company, Religare Capital Markets, Reliance Industries, Spice Invest and Finance Advisors were involved in the reported outbound deals.

A jump in outbound deals led to an increase in total merger and acquisition (M&A) and private equity (PE) combined deal value to US$ 2 billion in July 2012.

Recent Developments & Investments

India is being looked upon as a major strategic partner for foreign countries. International Governments and administrations are welcoming and promoting Indian investments in a big way.

For instance, Venezuela has urged investments from India in the petroleum sector while Indonesia (the second largest rubber producer in the world) has invited Indian rubber industry to invest in that country. Similarly, Mr Carlos Duarte, Ambassador of Brazil to India, has encouraged Indian business houses to invest in the Latin American country across sectors like pharmaceuticals, sugar and ethanol manufacturing.