India's overseas investment to exceed inward capital flow

New Delhi -- Overseas investments by Indian companies may exceed the inward flow of foreign direct investment in the current fiscal as the quest for globalisation has taken root among home grown companies, says a new study.

"For the first time outbound foreign direct investment (FDI) is going to exceed inward flow of foreign investment," D.S. Brar, chairman of GVK Biosciences, told a seminar on globalisation of Indian companies here Friday, quoting the study.

India is expected to get between $7-8 billion in FDI during the current fiscal.

"There is certainly a new dynamism in Indian companies because of globalisation and competition," said Subir V. Gokarn, chief economist and executive director, Credit Rating Information and Services Ltd (CRISL), which conducted the study.

"A lot of attention has been paid to foreign investment coming to India," Brar said. "But what is not so well known is how active Indian been in the past few years in making investments outside their home base."

Officials at the Confederation of Indian Industry (CII), which commissioned the study, said while no comprehensive data was available on the amount of investments made by Indian companies abroad, the trends indicated that they were growing fast.

Giving some examples, the study said Tata Tea alone has made an investment of $677 million in the US in the current fiscal, while state-run Oil and Natural Gas Corp (ONGC) has invested $410 million in Brazil for an energy stake.

Other major investments include the ones by Aban Loyd in the energy sector of Norway worth $445 million, Matrix Labs' $319 million in the pharma sector of Belgoum and Ballarpur's $261 million in the Malaysian paper industry.

The study also points out that the US was the largest recipient of investments from India during 2005-06 worth $1.05 billion, followed by Britain with $815 million and Belgium with $799.9 million.

The top investor during the year was the government-owned State Bank of India with an overseas investment of $1.18 billion, followed by Dr. Reddy's Labs with $777 million and Sulzon Energy with $565 million.