News / Asia

    India Primed to Invest Abroad

    This picture shows the Tata Steel France Rail plant in the French northeastern town of Hayange, during the inauguration day of this rail facility on September 29, 2011.
    This picture shows the Tata Steel France Rail plant in the French northeastern town of Hayange, during the inauguration day of this rail facility on September 29, 2011.

    Multimedia

    Audio
    Anjana Pasricha

    Investments by Indian companies in foreign countries have risen sharply as they look for newer markets and resources to fuel a growing economy.

    For nearly 150 years, Harrisons Malayalam has grown rubber and tea on massive plantations in the southern Indian states of Tamil Nadu and Kerala.  But Managing Director Pankaj Kapoor says that despite the growing demand for both commodities, the company cannot develop new land in India.

    "To get land, say 10,000 hectares of land at one place, whichever be the state, is next to impossible, it's not available," noted Kapoor.

    The company now plans to invest millions of dollars to develop rubber plantations in Africa.  

    Kapoor says they have scouted for land in countries like Ethiopia and Ghana.   

    "It's good to get the land in African countries, because the governments are very keen to get the investors overseas, they have large land, unutilized," Kapoor added.  "We can bring in the technology and we can bring in the money."

    Harrisons Malayalam is just one of scores of Indian companies which are pushing overseas in search of resources such as land and coal, newer markets, or technology.

    Between April 2010 and March 2011 Indian companies invested nearly $44 billion overseas, more than double the previous year.

    They have gone to Africa, Asia, Europe and Australia in sectors ranging from farming, pharmaceuticals and energy, to telecommunications and infrastructure. D.K. Joshi, chief economist at the Crisil consulting firm in Mumbai, says the growing investments are driven by several factors.

    "Indian corporates have been cash rich and on top of that the foreign exchange regulations were liberalized so that allowed Indians to go out," Joshi noted. "The valuations of foreign companies after the global financial crisis, they were pretty good, so it made sense to go out and acquire companies to expand the global footprint."

    The overseas investors include some of India's biggest groups, including: Reliance Industries, the Tata conglomerate, the Essar Group and Bharti Airtel. The Tata conglomerate now earns more than half its revenues overseas.  

    Chandrajit Banerjee, who heads the Confederation of Indian Industry, says Indian companies have become increasingly confident as they have grown in scale and size since India liberalized its economy two decades ago.

    "They became ambitious, their aspiration levels went up, and therefore they started looking offshore," said Banerjee. "Indian industry has today become much more competitive and therefore they are being able to acquire, they are able to match technology, they are able to export, they are able to invest."

    Economists also say that as decision-making slows down in India in the wake of high profile corruption scandals, many businesses prefer to invest in what they call more "predictable" markets. A survey by the Federation of Indian Chambers of Commerce and Industry suggests that business confidence in India has plunged due to high interest rates, frustration with governance and problems with issues such as land acquisition.   

    However, economist Joshi warns that the pace of overseas investments may slow down in the coming months due to concerns of another recession in Western countries.

    "I think the companies will try to preserve cash, because their margins are already coming under pressure, and I think there is also a fear that if the global economy crashes again, then I think there will be a credit freeze and you will require money," Joshi added.  "So everybody is in a cautious mode right now, so they are likely to go a bit slow in their global acquisitions unless the dust settles on the global environment once again."   

    Meanwhile, the government says it wants to speed up the pace of economic reforms in such areas as labor laws and land acquisition to encourage Indian companies to invest more money at home.

    You May Like

    Russia Sees Brexit Impact Widespread but Temporary

    Officials, citizens react to Britain’s vote to exit European Union with mix of pleasure, understanding and concern

    Obama Encourages Entrepreneurs to Seek Global Interconnection

    President tells entrepreneurs at global summit at Stanford University to find mentors, push ahead with new ideas on day after Britain voters decide to exit EU

    Video Some US Gun Owners Support Gun Control

    Defying the stereotype, Dave Makings says he'd give up his assault rifle for a comprehensive program to reduce gun violence

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Brexit Vote Plunges Global Markets Into Unchartered Territoryi
    X
    June 24, 2016 9:38 PM
    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Brexit Vote Plunges Global Markets Into Unchartered Territory

    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.
    Video

    Video Tunisian Fishing Town Searches for Jobs, Local Development Solutions

    As the European Union tries to come to grips with its migrant crisis, some newcomers are leaving voluntarily. But those returning to their home countries face an uncertain future.  Five years after Tunisia's revolution, the tiny North African country is struggling with unrest, soaring unemployment and plummeting growth. From the southern Tunisian fishing town of Zarzis, Lisa Bryant takes a look for VOA at a search for local solutions.
    Video

    Video 'American Troops' in Russia Despite Tensions

    Historic battle re-enactment is a niche hobby with a fair number of adherents in Russia where past military victories are played-up by the Kremlin as a show of national strength. But, one group of World War II re-enactors in Moscow has the rare distinction of choosing to play western ally troops. VOA's Daniel Schearf explains.
    Video

    Video Experts: Very Few Killed in US Gun Violence Are Victims of Mass Shootings

    The deadly shooting at a Florida nightclub has reignited the debate in the U.S. over gun control. Although Congress doesn't provide government health agencies funds to study gun violence, public health experts say private research has helped them learn some things about the issue. VOA's Carol Pearson reports.
    Video

    Video Trump Unleashes Broadside Against Clinton to Try to Ease GOP Doubts

    Recent public opinion polls show Republican Donald Trump slipping behind Democrat Hillary Clinton in the presidential election matchup for November. Trump trails her both in fundraising and campaign organization, but he's intensifying his attacks on the former secretary of state. VOA National Correspondent Jim Malone reports.
    Video

    Video Muslim American Mayor Calls for Tolerance

    Syrian-born Mohamed Khairullah describes himself as "an American mayor who happens to be Muslim." As the three-term mayor of Prospect Park, New Jersey, he believes his town of 6,000 is an example of how ethnicity and religious beliefs should not determine a community's leadership. Ramon Taylor has this report from Prospect Park.
    Video

    Video Internal Rifts Over Syria Policy Could Be Headache for Next US President

    With the Obama administration showing little outward enthusiasm for adopting a more robust Syria policy, there is a strong likelihood that the internal discontent expressed by State Department employees will roll over to the next administration. VOA State Department correspondent Pam Dockins reports.
    Video

    Video Senegal to Park Colorful ‘Cars Rapide’ Permanently

    Brightly painted cars rapide are a hallmark of Dakar, offering residents a cheap way to get around the capital city since 1976. But the privately owned minibuses are scheduled to be parked for good in late 2018, as Ricci Shryock reports for VOA.
    Video

    Video Florida Gets $1 Million in Emergency Government Funding for Orlando

    The U.S. government has granted $1 million in emergency funding to the state of Florida to cover the costs linked to the June 12 massacre in Orlando. U.S. Attorney General Loretta Lynch announced the grant Tuesday in Orlando, where she met with survivors of the shooting attack that killed 49 people. Zlatica Hoke reports.
    Video

    Video How to Print Impossible Shapes with Metal

    3-D printing with metals is rapidly becoming more advanced. As printers become more affordable, the industry is partnering with universities to refine processes for manufacturing previously impossible things. A new 3-D printing lab aims to bring the new technology closer to everyday use. VOA's George Putic reports.
    Video

    Video Big Somali Community in Minnesota Observes Muslim Religious Feast

    Ramadan is widely observed in the north central US state of Minnesota, which a large Muslim community calls home. VOA Somali service reporter Mohmud Masadde files this report from Minneapolis, the state's biggest city.

    Special Report

    Adrift The Invisible African Diaspora