With the GDP growth stabilizing at over 9 per cent, the world has woken up to the Indian success story and we are ruling the international investment market.
Reflecting the robustness of the economy, the value of mergers and acquisitions of corporate India has crossed $48 billion for the first eight months of this year with outbound acquisitions surpassing the inbound deals in terms of both value and number. There were 164 acquisitions made by Indian companies abroad, more than double the number of acquisitions made by international companies in the country (inbound deals at 73). Europe contributed 53 %, UK 40 % and the US 33 % among outbound deal value.
Major acquisitions made by Indian companies abroad till August are - the Tata Steel's acquisition of Corus for $12.2 billion, Hindalco's acquisition of Novelis Inc for $6 billion, Suzlon Energy's deal with RE Power for $1.7 billion.
The US invested 5.5 billion dollars in India between 1991 and 2006; a period of 15 years, but India invested 2 billion in just a year (2006-07) and is likely to cross 10 billion dollars by 2010. Indian investment abroad is spread across industries ranging from pharmaceuticals to telecom, automobiles and ancillaries to IT, paints and paper. Global financiers are willing to fund Indian acquisition over global whales.
Our economic past, characterized by scarcity, has been the driver for today's success. It forced us to be more efficient and do more with less. Not only did we get free lessons in optimizing our resources, but it also challenged us to find creative solutions, and then test these in a tough operating environment. It was virtually like getting a free MBA! Now, 'Made in India' has become the benchmark for software and services in the 21st century, just like 'Made in Japan' was the success story in manufacturing, automobiles and consumer electronics in the late 20th century. It is now a brand that epitomizes efficiency and innovation. Indian manufacturing & agriculture sector can ride on this wave to capture world business space.
If Indian IT learnt to walk in the West, it is now learning to run in India. Technology is helping bridge the rich-poor divide; distance education, telemedicine and micro-finance are helping achieve this. Less surprising, perhaps, is that India is creating innovative products aimed at the bottom of the economic pyramid. So products like a Rs 10,000 PC, a refrigerator built to survive voltage fluctuations and, of course, the Rs 100,000 car are all unique, indigenous, cost-effective solutions that could be exported. We are also deploying technology to ensure that citizens can avail of government services remotely without having to deal with India's mammoth bureaucracy. Innovation in technology is helping India. It boasts of the cheapest mobile phones and call rates of just Re 1 a minute and public transportation that runs on non-polluting gas. To top it all, it has a young population bursting with energy and aspirations - probably the only big market where first-time telephone users are cellular phone users that have bypassed landlines.
The fact that our multinational competitors are setting up shop in India is proof of India's competitiveness and the success of our business model. Innovative & creative products developed in India, supported by well-managed skill pool and open business policies are indicating that India is shaping a shining future for itself.
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