India's US investment exceeds $2 bn
Monday, 18 June 2007, 19:30 IST
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New Delhi: Indian companies invested over $2 billion in the US in 2006-07 and completed a total of 48 deals with the firms there, says a report. The IT and ITES (IT-enabled services) industries have accounted for 48 percent of the 48 deals, including mega deals taking place in other sectors such as pharma, hospitality, agro products and automotive industry among others, according to a study jointly done by the Federation of Indian Chambers of Commerce and Industry (FICCI) and global professional services firm Ernst & Young. Indian outbound deals crossed $15 billion in 2006 and it is expected that by 2007 the value could surpass $35 billion. Also, during the first nine months of 2006, Indian companies have announced 115 foreign acquisitions worth $7.4 billion, a seven-fold increase since 2000. According to the report, the companies that have clinched the top five deals during the period are Tata Tea, ONGC Videsh, Tata Coffee, Indian Hotels and HOV Services. "Over the last decade, Indian companies belonging to diverse industries have been gradually gearing up to become emerging multinationals. Leveraging the nation's comparative advantage of knowledge, Indian companies have grown through acquisitions, built best-in-class competency and become large-scale players," the report says. It also stresses on the fact that Indian investments abroad are not always done by large business conglomerates but are largely driven by several of Indian small and medium enterprises. One of the main factors that have acted as a catalyst for such enormous deals is the growing confidence among Indian companies coupled with the willingness to take risk. Also, India Inc is now well-equipped to acquire overseas companies because of the regulatory development that has taken place due to the government's liberal measures and various monetary relaxations provided by the Reserve Bank of India (RBI) with the growth of foreign exchange. In the BPO (business process outsourcing) space, the report said, Indian companies are now increasingly opening up units in the US providing opportunities of large-scale employment there, giving rise to a 'reverse outsourcing' trend.
Source: IANS
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