India is considered to be a strategic player on global landscape when it comes to investments and businesses. Standing as the world’s 21st largest outward investor, the country is increasingly encouraging its companies to go out and hunt for new markets and cost-effective sources.
Indian firms invest overseas majorly through mergers and acquisition (M&A) transactions. Indian Government’s supportive policy regimen, coupled with India Inc’s experimental orientation will definitely demonstrate an upward trend in outward foreign direct investment (FDI) in the years to come.
Some of the recent developments and statistics pertaining to the same are discussed hereafter.
Government Initiatives
Indian Government is making all efforts to integrate Indian economy with rest of the world in the every possible way. India showed a consistent performance even in the toughest of the times and hence is looked upon as a strategic international player and an important source of funds for other economies.
Recently, many of the Indian and Bangladeshi companies have inked agreements for setting up projects in sectors such as limousine services, manufacturing three-wheelers and software development, stated the officials of the Confederation of Indian Industry (CII). Recently, the Indian trade and industry had expressed it to the Government that it continues to see Bangladesh as a “very, very important partner”, and it would like to initiate more of the plans for investment, trade and joint ventures (JV) between the two countries.
In March 2013, the Ministry of External Affairs had revealed that in the last six months or so 38 Indian investments had been registered with the Board of Investments in Bangladesh for about US$ 183 million; major investor being Bharti Airtel, Tata Motors, Sun Pharma, Asian Paints, Marico, Godrej, Venky’s Hatcheries, Parle Products, Forbes and Marshall.
Road Ahead
The Government, RBI, and Indian Corporate entities are constantly reviewing the policies and regulations including Home Country Measures (HCMs) to boost globalisation efforts through outward FDI without having any adverse effects on our domestic economy and its macro-economic stability.
India is expected to be the largest source of emerging market multination enterprises (MNEs) by 2024, according to a recent report by PricewaterhouseCoopers (PwC). By that time, India would be having 20 per cent more MNEs than China, and more than 2, 200 Indian firms are anticipated to invest overseas in the next fifteen years. In a nutshell, Indian MNEs are poised to carve a niche in business services and high-profile manufacturing sectors.
Exchange Rate Used: INR 1 = US$ 0.01475 as on August 29, 2013
Exchange Rate Used: EUR 1 = US$ 1.32649 as on August 29, 2013
References: Media Reports, Press Release, Reserve Bank of India website