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| Indian companies toying option of acquiring more in US: Ficci |
| Lalit K Jha/PTI / Washington Jun 23, 2009, 13:50 IST |
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Several Indian multinationals are looking at acquiring US companies, despite the economic downturn which has raised the cost of overseas acquisitions.
In the past two years, Indian companies have taken over as many as 143 American companies in various sectors ranging from a small 0.7 to a whopping $1,005 million,says a Federation of Indian Chamber of Commerce and Industry (FICCI) report.
The report, "India Contributes to Employment, Capital Growth and Tax Revenue in the US: Direct Investments by Indian Companies in 2007-09", has been prepared by the prestigious
The value of the deal was disclosed in 55 cases and stood at a total of $4,432 million.
A large number of jobs in India's textile sector would be lost if GSP for India ends.
Gems and Jewellery sector along with the steel too would be badly hit.
About the general belief in the US that outsourcing has helped India, Singhania said studies have shown that it is actually the US companies who have gained the most out of the outsourcing. "In terms of value, more than 70 to 75 per cent of the benefit goes to US companies."
Both Mitra and Singhania said the FICCI delegation would be presenting the Indian case and impress on the importance of stopping protectionist tendencies.
"Then there is serious issue of taxation and outsourcing. On the one hand we are signing the civilian nuclear agreement, on the other hand there is a serious issue of dual use technology relaxation.,"
"So FICCI is going to convincingly present the case of Indian business that these kinds of measures, weather it is taxation measures for outsourcing, sun setting GSP for India is not right," Mitra said.
The report said the size of the deals was between the range of 0.8 million to $1,005 million.
Next fiscal, 2008-09, Indian companies were involved in acquisition of 49 companies. Of these, deal values were disclosed in 24 cases, which amounted to $960 million. The size of the deal ranged from 0.7 million to $172 million.
The report attributed the rise in Indian outbound investments to the US to strong economic growth, easy availability of debt finance for companies.
In the next year, it dropped by 48 per cent in volume mainly due to volatility in the global market and credit crunch.
Unfavorable exchange rate movements have further increased the cost of overseas acquisitions for Indian multinationals, the report said.
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