India set to make offshore corporate acquisitions
In complete reversal to the general direction of investment in emerging economies, India is beginning to acquire overseas companies and has targeted Australia as one location in which to execute this strategy, according to a leading Indian joint venture expert.
“That’s the next big development — that India will begin to buy companies overseas,” Applied Technology Services managing director Dr Arnand Sethi said.
He cited India’s lack of quality natural resources as the main driver for this move towards purchasing foreign-based companies.
Sethi said the demand for energy coming from its population of 1.1 billion is a prime example of India’s need for natural resources it does not necessarily possess.
“India has coal, but the grade of coal for energy producing purposes is very poor,” he explained.
To that end, the mining and resource sectors are in the sights of Indian investors.
And the process has in fact already begun, with local resource firms such as Straits Nifty, Mt Gordon Copper and Lyell Copper having been recently purchased by Indian organisations.
However, Australian companies aren’t the only ones to experience this recent move emanating from India, with UK firms Arcelor Steel and Corus Steel coming under Indian control along with Finland’s WinWind, Norway’s Sinvest and North America’s Novelis Copper.
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