2. Outbound investments from India have
undergone a considerable change not
only in terms of magnitude but also in
terms of geographical spread and
sectorial composition. Analysis of the
trends in direct investments over the last
decade reveals that while investment
flows, both inward and outward, were
rather muted during the early part of the
decade, they gained momentum during
the latter half.
3. Indian firms invest in foreign shores
primarily through Mergers and
Acquisition (M&A) transactions. With
rising M&A activity, companies will
get direct access to newer and more
extensive markets, and better
technologies, which would enable
them to increase their customer base
and achieve a global reach.
4. In a recent development, UK announced
that India has become the third largest
source of FDI for them as investments
increased by 65 per cent in 2015 leading
to over 9,000 new and safeguarded jobs.
5. Intas Pharma has announced purchase of two
companies in UK and Ireland, Actavis UK Ltd
and Actavis Ireland Ltd, from Israeli pharma
major Teva Pharmacuetical Industries Ltd, for
an enterprise value of GBP 600 million (US$
754.14 million).
India’s third largest software services firm
Wipro will be spending US$ 500 million to
acquire US-based cloud services firm Appirio
6. Sun Pharmaceutical Industries Ltd, India's largest drug
maker, has entered into an agreement with Switzerland-
based Novartis AG, to acquire the latter’s branded cancer
drug Odomzo for around US$ 175 million.
Motherson Sumi Systems Ltd, an automobile components
manufacturer, has acquired Finland-based truck wire
maker PKC Group Pic for EUR 571 million (US$ 620.36
million).
7. Reliance Industrial Investments and Holdings, a
wholly-owned subsidiary of Reliance Industries
Limited (RIL), has invested Rs 108 crores (US$ 16
million) in compulsorily convertible preferred
shares of US-based technology start-up NetraDyne
Ashok Leyland Limited, India's second largest
commercial vehicle manufacturer, has announced
to expand its unit in Ras Al Khaimah (RAK) in the
United Arab Emirates (UAE) by investing US$ 10
million which will help the company nearly
double its bus production capacity at the unit.
8. The RBI also liberalised/ rationalised
guidelines for foreign investments abroad by
Indian companies. It raised the annual
overseas investment ceiling to US$ 125,000
from US$ 75,000 to establish JV and wholly
owned subsidiaries. The government's
supportive policy regime complemented by
India Inc.’s experimental outlook could lead
to an upward trend in OFDI In future.
9. The Union Cabinet has approved a proposal to provide
US$ 150 million credit from Export Import Bank of
India (EXIM Bank) for the development of Chabahar
Port in Iran, which will also help India to facilitate the
growing trade and investment with Iran and other
countries in the region.
Prime Minister Mr Narendra Modi has promised Africa
a concessional credit of US$ 10 billion over the next five
years, in order to further strengthen ties with the
African countries.
10. The major investors include
Bharti AirtelBSE 0.07 % with
$765.20 million, Tata
International at $179.22 million,
and state-run ONGC Videsh
investing $75.49 million.
11. Bharti Airtel Limited (“Airtel”), India’s no. 1
operator and the third largest mobile services
provider globally with operations in 20 countries
across Asia and Africa, today announced the
launch of a massive network transformation
program – “Project Leap”. Aimed at perceptibly
improving network quality and delivering the
best customer experience, this strategic project
will see an investment of Rs. 60,000 crore in the
next 3 years.
12. San Francisco headquartered taxi hailing service Uber
has received fresh investment from Tata Opportunities
Fund, a private equity fund advised by India’s Tata
Capital, the amount of transaction was not disclosed
however as per sources close to the matter it was
between $75 million and $100 million amount of
investment.
Uber is also planning to increase the number of rides in
the country to more than a million per day in the next six
to nine months, the company’s India president, Amit
Jain said in an email.
13. ONGC Videsh, the overseas arm of
the state-run Oil and Natural Gas
Corp, plans to invest $150 million in
exploration this fiscal year to drill
more wells in Colombia, where it just
made a commercial discovery, as well
as in Kazakhstan and Bangladesh.
14. 1. Economic Development Stimulation.
Foreign direct investment can stimulate the target
country’s economic development, creating a more
conducive environment for you as the investor and
benefits for the local industry.
2. Employment and Economic Boost.
Foreign direct investment creates new jobs, as
investors build new companies in the target country,
create new opportunities. This leads to an increase in
income and more buying power to the people, which
in turn leads to an economic boost.
15. Easy International Trade.
Commonly, a country has its own import tariff, and
this is one of the reasons why trading with it is quite
difficult. Also, there are industries that usually
require their presence in the international markets to
ensure their sales and goals will be completely met.
With FDI, all these will be made easier.
Increment in Income.
Another big advantage of foreign direct investment
is the increase of the target country’s income. With
more jobs and higher wages, the national income
normally increases. As a result, economic growth is
spurred. Take note that larger corporations would
usually offer higher salary levels than what you
would normally find in the target country, which
can lead to increment in income.
16. Risk from Political Changes.
Because political issues in other countries can instantly
change, foreign direct investment is very risky. Plus,
most of the risk factors that you are going to experience
are extremely high.
Higher Costs.
If you invest in some foreign countries, you might
notice that it is more expensive than when you export
goods. So, it is very imperative to prepare sufficient
money to set up your operations.
17. Cultural erosion:
In all the countries where the FDls have made an inroad,
there has been a cultural shock experienced by the local
people, adopting a different culture alien to the country.
The domestic culture either disappears or suffers a
setback. This is felt in the family structure, social setup
and erosion in the value system of the people.
Importance given to human relations, hither to suffers a
setback with the hi-fi style of living.
