Mar. 19 – Besides the traditional research and development powerhouses of the United States, Germany and Japan, India too is proving to be the destination of choice for global technology, pharmaceutical and engineering companies. Large multinational corporations like GM, IBM, Cisco, Motorola, Huawei and GE have already set up large R&D centers in India and many small and medium companies are actively considering establishing R&D facilities in India.
Some of the best academic institutions in India churn out a highly talented, English speaking workforce who delivers results at a less expensive rate than in the west making R&D work in India affordable and efficient. Additionally, India’s high growth rate and strict Intellectual Property protection regulations make setting up an R&D facility in India and added bonus.
In a recent survey by Cambridge University, covering 500 of the largest companies worldwide, India stood seventh in housing R&D after the United States, Germany, Japan, UK, China and France. It ranked fifth in attracting more R&D centers.
Mar. 18 – India has just announced the purchase of eight Boeing P-81 maritime patrol aircrafts, worth US$2.1 billion. The deal, just approved by the Obama administration, is the largest U.S. arms sale to India to date, and comes as the United States approved the sale “having factored in political, military, economic, human rights and arms-control considerations.” The Indian Navy is the first recipient of the aircraft; known for their long distance surveillance capabilities. The deal comes at a time when China’s development of its “string of pearls” strategy is in the ascendancy.
The first aircraft is due for delivery in 2013, with the full order to be completed two years later. The aircraft, which is designed around the Boeing 737 airframe, can perform anti-submarine warfare, search and rescue, maritime intervention, long range surveillance, target acquisition and reconnaissance. The US$2.2 billion contract comes at a time when India and the United States are increasingly concerned about losing influence within the Indian Ocean. The deal also includes maintenance, training, supporting equipment and logistical support.
Mar. 18 – The Indian government is mulling a Rs 100 billion (US$2 billion) package to help shipping companies buy new vessels as Indian and foreign banks tighten credit lines.
"Foreign banks are not lending now. Traditionally they’ve been the lenders for shipping acquisitions. This is some sort of financing for acquisition of new ships by Shipping Corporation of India and also by other Indian private shipping companies," APVN Sarma, secretary, ministry of shipping told Reuters.
The largest state run shipping company – the shipping corporation of India has planned a capital expenditure of Rs 150 billion (US$3 billion) during the eleventh five year plan. The SCI has an order pipeline for 29 new ships.
While the ministry of Shipping has forwarded their demand to the government, no action is expected until after the national elections are completed in May.
Mar. 12 – The Government is considering proposals to scrap the cap mechanism by which foreign institutional investors are restricted in certain industries from investing in Initial public offerings, according to the Economic Times. The proposal, put forward by the Dept. of Industrial Policy & Promotion will be studied by various secretariats before being presented to parliament.
The move would lift the uncertainty over whether FDI applications in sectors such as retail, auto, aviation and telecoms will require permission from the Foreign Investment Promotion Board (FIPB). Currently, both the Reserve Bank of India, which manages foreign exchange and investment through the Foreign Exchange Management Act (FEMA) and regulations concerning FDI into India conflict over the requirement. Common practice is that applications to FIPB are required. It frees up uncertainty over the routes via which investments can be made, provided they remain within the pertinent capped FDI ceiling.
Mar. 6 – India’s foreign investment promotion board on Wednesday gave the green signal to allow 29 FDI proposals worth Rs 6.16 billion (US$119 million) to be passed. Due to the gloomy global economic scenario, the government has eased FDI entry regulations allowing many more companies entry into the vast Indian market than before.
The largest deal to be passed on Wednesday was hospitality group AAPC Singapore Pte. Ltd.’s proposal of Rs 3.65 billion (US$70.5 million). AAPC plans to set up a wholly owned venture to construct, develop, own and manage low-budget hotels in India. Other sectors that were given FDI clearance included cargo – bulk handling, telecom and retail clothing sectors.
Mar. 3 – The all-share merger between Reliance Industries India's largest private sector firm with its subsidiary Reliance Petroleum which created the world's sixth-biggest refiner also marks the country’s 10th largest M&A deal ever.
While 2005-2008 saw large, M&A deals, the past few months have seen a significant plunge in M&A deals in India, even as valuations of Indian companies have become extremely attractive. So far 2009 saw M&A deals worth US$4 billion, less compared to 2008’s M&A deals worth US$30 billion.
Not only has M&A activity fallen, but deal values have also plummeted. During 2005-08, listed Indian companies have been involved in 54 M&A activities worth US$45 billion, but the current mark-to-market value of such M&A’s is down to US$20.96 billion, indicating a loss of 53 per cent, SMC Capital said in a report.
Feb. 27 – India’s commerce and Industry minister Kamal Nath has set an export target of US$200 billion during the fiscal year 2009-10. Due to poor economic conditions the government has also lowered this fiscal year’s export target from US$200 billion to US$175 billion. India’s export sector grew 30 percent from January 2008 to September, however in January this year the sector was down 16 percent from the year earlier. Experts estimate the slowdown in exports to continue until March this year.
By way of offering exporters 26 additional sops on Thursday, including interest rate subsidies on export loans, enhanced reimbursement of duties, and a longer period to fulfill export obligations etc. the government hopes to decrease the burden on exporters. Nath also said that the most affected industries leather and textile would get a special package of Rs 325 crore (US$64 million) and the threshold limit for recognition as premier trading house would be lowered from Rs 10,000 crore (US$1.9 trillion) to Rs 7,500 crore (US$1.5 trillion).
Feb. 24 – On Monday, the Indian government finally gave their nod to Japan’s NTT DoCoMo buying a 27.3 percent stake in Tata Teleservices Ltd the country’s sixth-largest mobile operator for 129.24 billion rupees (US$2.6 billion). The deal will also allow NTT DoCoMo to acquire 20.25 percent in Tata Tele's listed unit Tata Teleservices (Maharashtra) Ltd, for 9.45 billion rupees (US$188 million) the government said. The twin investments make this one of the largest foreign direct investments to flow into India in the past year and NTT DoCoMO's largest overseas invetsment in eight years.
This marks the Tata Group’s third major international deal. In 2007, Tata Steel bought the Corus Group Plc for US$13 billion marking India’s largest takeover. Last year the conglomerate’s automobile arm Tata Motors bought Jaguar and Land Rover for US$2.3 billion.