labels: economy - general, m&a
FDI outgo to exceed inflows in 2007news
24 October 2006

The urge to merge and acquire companies overseas by Indian IT, pharma, and other big-ticket M&As like the Tata Group''s bid for the Anglo-Dutch Corus Group with a $9.5-billion offer, could lead to higher outflows in of foreign direct investments (FDI) from India than inflows in to the country this year.

Till date acquisitions of foreign businesses by Indian companies this year alone have amounted to around $10 billion and by the end of FY 2007 outflows could end up exceeding the total foreign inflows into the country.

As Indian companies compete aggressively in the global markets, they have been trying to locate operations where the least-cost mix of labour and raw materials and marketing advantages present themselves.

Increased Indian investments overseas reflect the need of operating in a globalised market place.

Major overseas investments have been made by Tata Tea, Indian Hotels Company, M&M Bharat Forge, Wipro, Nicholas Piramal, Videocon, Wockhardt, Sterling Biotech, Geometric Software and a host of mid rung IT and pharmaceutical companies.

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FDI outgo to exceed inflows in 2007