India Inc's FDI to increase by 15 pc in 5 yrs

NEW DELHI: India Inc is set to increase its overseas investments by 15 per cent over the next five years with a majority of domestic firms having big international expansion plans, a study said on Tuesday.

The study - Global Outbound FDI Potential of Indian Companies 2007, conducted by global FDI tracking research firm Oxford Intelligence, shows that the country's share of global outward investment (FDI, mergers and acquisitions) has trebled over four years and outbound activity in 2006 alone increased by 26 per cent.

The report forecasts continued growth averaging 15 per cent over the next five years and in 2007 Indian companies expect growth of 19 per cent as against the previous year.

About 95 per cent of the Indian companies surveyed had firm international expansion plans for 2007 and 2008 and North America is expected to emerge as a 'hot spot' for Indian outward investment, Oxford Intelligence said.

"Although discussion about India today tends to focus on the growing tide of foreign companies looking to establish operations in the country, Indian companies are becoming an increasingly important source of outbound investment," Oxford Intelligence research director and report's author Michel Lemagnen said.

After the removal of key restrictions in 2005 on corporate ability to expand internationally, top Indian firms are in healthy position in terms of cash, profitability and financing capacity and their potential M&As and FDI in the next few years is extremely favourable, Lemagnen said.