Indian companies investing in Europe on rise

By SiliconIndia   |   Wednesday, 27 August 2008, 07:00 Hrs
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London: India ranks among the first five largest investors in British companies and equities. It is headed by the Tatas, who made ambitious purchase of Jaguar and Land Rover auto brands.

Many Indian companies are on serious lookout to acquire strategically placed British companies, including stock broking and financial firms in London, which is the heart of the European commerce and industry.

Indian companies going to Europe prefer to operate from London, as the city is seen as the correct gateway to oil-rich Middle East and commodities-rich African markets. In African markets, some Indian companies benefit from the presence of well-established Indian business communities, particularly in Nigeria, East, Central and South Africa.

At the same time, India, according to Geneva-based UNCTAD, has emerged as a favourite spot for European companies busy shifting service operations abroad to escape from high administrative and management costs.
An Indian banker based in London states that since March this year borrowing abroad has been made easier by the Reserve Bank of India and Indian companies can now borrow up to $50 million each for spending in rupees equivalent.

Indian companies incorporated in the European Union countries find it convenient to borrow from European banking institutions, at much lower rate of interest and extended repayment schedules, reported BusinessLine.

Indian manufacturing and trading companies feel confident that with advent of more intimate globalisation, Indian companies have opportunities to spread overseas. For Indian manufacturing companies, it is essential to have a physical presence in key European metropolitan trading areas.

The Indian business community has enviable management and administrative skills, and European companies at the middle and lower levels are finding it hard to cope with rising capital and administrative costs. This enables Indian companies to move on.

The latest Infosys deal to buy Axon Group is another chapter in the saga of Indian companies on a buying spree.

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