General Electric of the US is seeking government approval to set up
a wholly-owned subsidiary in India to function as a holding company for the
multinational''s information technology business. The subsidiary will be part of the GE
International Operations Company.
GE intends to make the subsidiary a conduit for its
investments in India. In addition, it will also serve as a coordination point for GE''s
various support service groups in India.
Evidently GE wants to invest more in India. The group has
indicated that it will bring more into its 50:50 joint venture with Tata Consultancy
Services set up recently with a nominal capital to operate in the aircraft
engineering-related area. The group has other IT-related operations in India. Its
reportedly ambitious expansion plan in this sector may convert some of the existing
operations into global sourcing points. Hence the need for a holding company.
GE''s proposal is pending with the department of
electronics, the administrative department for information technology. Once the DoE clears
the proposal, it will go to the Foreign Investments Promotion Board.
GE had recently secured an approval
from the government to set up a subsidiary for coordinating the activities of its various
sourcing centres in India. The approval is subject to the condition that it will not
undertake any trading activities.