New Delhi: With the government setting the tone for a capital subsidy of 25 per cent on investments for setting up semi-conductor and nano-technology manufacturing units, the forthcoming Union Budget for 2007-08 held the promise to help cross-border mergers and acquisitions in these sunrise sectors.

In a new report IndusView Advisors Private Limited said the entry of global technology leaders in to India was symbolic of the need to bridge the digital divide between developed and developing economies, the benefits of which would eventually percolate down to the citizens.

The report notes that the current initiatives would open the Indian electronic design automation (EDA) industry to more merger and acquisitions in a bid to attain the $43 billion dollars size by 2015, from the current levels of $3 billion.

According to Bundeep Singh Rangar, chairman, IndusView Advisors, the benefit extended to the semiconductor industry was expected to attract investments of up to $10 billion in the next four to five years from global chip manufacturers like Intel Corp, Advanced Micro Devices Inc, Texas Instruments, who had earlier shied away from India.

Rangar says the heightened M&A deals would provide companies with a competitive advantage of cost and engineering skill sets in the country.

The report also notes that the retail sector in India, which has seen the interest of global retail giants like Wal-Mart, Tesco, Metro AG would witness revamping as traditional shops would make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores.

Accordingly easing regulations would attract more investments in the retail sector taking the benefits of organised retail to customers, the report said.

According to Rangar, it was only a matter of time before Tesco and Boots set up shop in India.
The report also focused on the infrastructure sector, which offers $150-billion investment opportunity in the next few years. Infrastructure assumes importance as the development of the corresponding real-estate sector depends on IT, it added.

The real estate market is expected to be worth $50 billion by 2010, from the $14 billion this year. This growth in the real estate sector would come from housing requirement of 80 million units over the next 15 years and 200 million square feet in office space required over the next five years by the country''s IT and BPO industries, the report added.