Indian firms still invest overseas

Indian companies still seem to be voting with their feet against PM Narendra Modi’s policies whilst placing hopes on him bringing in change. Their investments were even more than during the Manmohan Singh’s government in September last year.

An Assocham study “India’s Capital Exports”, released earlier this month said, “The tentative global recovery notwithstanding, Indian companies continue to look abroad for greener pastures investing as much $17.6 billion in April-September 2014 while outward investment in the whole of fiscal 2013-14 was $36.9 billion.”

Outbound investment by Indian firms was nearly $17.2 billion in 2008-09 but touched a peak of $43.9 billion in 2010-11. In 2013-14, outbound investments touched around $36.9 billion as against $26.8 billion in 2012-13.

The study says about 5,028 Indian companies have invested in foreign locations during April 2009 to September 2014. The top hundred companies that have recorded significant foreign investment acco-unt for 76.01 per cent share in total foreign investment by Indian companies.

“What is adding to their quest for going abroad is the attractive valuations of assets abroad, given the fact that some of the markets like the European Union are facing slowdown with several of the home companies seeking to exit”, said D. S. Rawat, secretary general, Assocham.

Opportunities for investment in United States due to attractive valuations are good and Indian firms are making fresh investment in their existing facilities including in manufacturing.

The Indian companies have been investing largely in the manufacturing sector and transport and storage and communication sectors.