The slowdown of the economy and weak consumer sentiment dominated the India’s growth story in 2013. Not surprising then that several large Indian companies such as Birla group and Maruti Suzuki have delayed their domestic capital expenditure plans. Their mantra has been to wait and watch.
But the enthusiasm of global players has not fizzled out as was evident from some big bang announcements this year. For instance, American F&B giant Pepsico which announced it would invest $ 5.5 billion (approx Rs 33,000 crore) in India by 2020. And this despite Pepsico CEO Indra Nooyi’s statement that India was not an easy place to work in. “This investment is PepsiCo’s vote of confidence in India’s future,” she added.
Then in May, Unilever increased its stake in its Indian arm to 67.26%, buoyed by the growth potential of emerging markets. The Anglo-Dutch FMCG multinational upped its stake in Hindustan Unilever by 14.78% making it the biggest buyback in the history of Indian capital market and bringing in forex inflows of close to Rs 191.74 billion. Paul Polman, Unilever CEO, who despite slowdown continues to bet on the India growth story, said,”The long heritage and great brands of Hindustan Unilever, and the significant growth potential of a country with 1.3 billion people, make India a strategic long-term priority for the business.”
On the retail front, despite India having allowed foreign direct investment (FDI) in multi-brand retail, it has failed to attract any global players.
But on the single brand front, some big names like Burger King and H&M did set up shop in India 2013. Of these, Swedish furniture retailer Ikea announced it would be investing Rs 10,500, making it the biggest-ever single-brand FDI in India.
Retailers who are already in India have decided to step up focus on the business here. British retailer Marks & Spencer, for instance, will make India its most important international market.’