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MNCs stepping up investments in India
By agencies
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Tuesday, 21 February 2006, 20:30 IST
MUMBAI: After moving slow for long, multinational companies (MNCs) led by Siemens, MICO, ABB, Wartsila India, Denso Corporation are stepping up investments in India, buoyed by increased infrastructure spending and higher consumption from the rural sector.
Most of these MNCs were pumping fresh investment for long, however have now changed course to announce big investments, seeing the immense potential, says analysts.
HDFC Securities Head of Retail Research, Deepak Jasani said, Thanks to the buoyant economy and huge potential in the infrastructure and engineering sector, there is a renewed interest in India by the MNCs.
Some of the recent announcements made by few company were, $409.09 billion by Bosch Groups Indian arm Motor India Company Ltd (MICO), while Siemens Ltd has acquired Hyderabad-based Elpro International's isolator (used in transmission and distribution lines) business and 50 percent stake in Kharagpur-based Flender Ltd.
Besides this, Siemens has also announced the setting up of an industrial steam turbine factory at Vadodara, Gujarat. Engine maker Cummins India (where Cummins Inc of the U.S. holds 51 percent) is setting up an additional manufacturing facility in Pune with an investment of $3.40 billion, while auto parts maker Bosch Chasis Systems (formerly Kalyani Brakes) has formed a joint venture with Brembo SpA of Italy for two-wheeler brakes.
Moving on the same lines, Ciba Specialty Chemicals has announced a $11.36 billion manufacturing plant in Goa and $15.90 billion investment in Gujarat through its fully-owned subsidiary Diamond Dye-Chem Ltd. Wartsila India, promoted by Wartsila Corporation of Finland, has also announced fresh investments in India.
On the FMCG front, Nestle India's new factory at Pantnagar is expected to be operational during the second half of 2006. Hindustan Lever Ltd (HLL), meanwhile, is increasing its rural focus further. Procter & Gamble is also expanding in the country, though all the fresh investments are being done through its wholly owned arm P&G Home Products.
Commenting on this, Jasani said that many new MNC players have made fresh investments in the Indian market and have done well, while the existing MNC players were found wanting as they postponed making g commitments in terms of investments and exposure. "Things have begun to change in recent times," he added.