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The age of the Indian MNC has now dawned, with the Indian industry realising that world-wide, businesses can thrive today only by crossing new frontiers, creating new markets and building new partnerships, Shri Kamal Nath, Union Minister of Commerce & Industry, said in his address today at a luncheon meeting "Celebrating Indian Investment in the UK" in London. The very theme of the gathering symbolised the transformation of the UK-India commercial links over the years and the new economic paradigm of two-way investments, which was emerging, he said.
Pointing out that India’s two-way international trade stands at US $ 150 billion and her foreign exchange reserves are a comfortable $ 120 billion, Shri Kamal Nath indicated that "the value of overseas acquisitions by Indian firms leap-frogged in the first half of 2004, with 24 buyoffs valued at a billion dollars, or roughly double the size of all of last year’s acquisitions. Indian companies are investing heavily in different parts of the world, including Germany, the United States, Australia, China, Korea, Thailand, Singapore and many parts of Africa. The world is now their oyster. Indian investments in the UK now roughly equal British investments in India. India retained in 2003 the rank of 8th largest investor here, and the 2nd largest from Asia. There have been some big-ticket investments last year. These investments have created a number of local jobs, as well as saved jobs in some cases. Existing Indian companies in the UK, particularly in the IT sector, have also ramped up their operations significantly, and at least two of them now employ over 1000 local people each".
The government welcomes foreign direct investment (FDI) and foreign investors would find a very conducive atmosphere in India, he said. At the same time, he pointed out that "while all kinds of FDI is always welcome, our very comfortable foreign exchange reserves means that investment for mere acquisitions do not excite us. Investment in trading operations is slightly better, as it leads to economic activity. But what we really want is FDI that generates the maximum economic activity, and thereby generates employment, that creates wealth for our people. Employment generation was a central election promise of ours. We especially therefore look to FDI in manufacturing sectors and in greenfield projects".
On outsourcing, Shri Kamal Nath said that India particularly appreciated the UK government’s pragmatic and positive approach. "Global sourcing is an opportunity in a competitive and technology-driven global economy, and not a threat", he said.
The Minister also raised the issue of some irritants that Indian companies had to face from time to time such as renewal of work permits for Indian IT professionals and the procedure for intra company transfers, as also the question of recognition of degrees. "But I am confident that this will soon get sorted out", he added.
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