Indian cos' foreign investment plans up 51% in Q3

KOLKATA: The Centre has expressed confidence in local companies planning to invest abroad even in the tough times. During the quarter ended December 2008, when the world financial order was seen crumbling following the outbreak of US sub-prime crisis, local authorities went ahead and cleared 828 proposals for investing abroad. The proposals were worth a whopping $7.4-billion.

It���s not immediately known how many of these companies have actually initiated action after receiving outward investment clearances. But what���s interesting is that the government cleared 51% more proposals during that troubled period compared with the 546-odd proposals cleared during the same period in 2007. It���s a different matter that total investment proposals during December 2007 quarter was higher at $7.9 billion, showed data published by the Reserve Bank of India (RBI) in its latest monthly bulletin.

India���s outward investment flows refer to local investment abroad in joint ventures (JVs) and wholly-owned subsidiaries (WOSs). These investments are proposed by local public and private limited companies, registered partnership firms and remittances in respect of production sharing agreements for oil exploration.

���Actual outward FDI in JVs and WOSs during the December 2008 quarter stood at $5,569 million, showing a 2% drop over $5,680 million during the corresponding period of the previous year,��� RBI said in its report. Of the total investments, 76% were in the form of equity, and the balance 24% were loans. In the December 2007 quarter, 87% of the outward investments were in the form of equity and the remaining 13% were loans.

While reviewing the sectoral break-up for the October-December 2008 period, RBI said that 73% of the proposals were in manufacturing, followed by non-financial services (7%) and trading (6%) and the balance were under the ���others��� category.

Direction of investment proposals during the period under review revealed that the Netherlands, the UK and Singapore together accounted for 73% of the amount of proposals for outward FDI. As against this, during the corresponding quarter of the previous year, Singapore, Mauritius and the US accounted for 72% of the proposals.