Globalizing India Inc.
Indian companies are becoming major players in the world economy. Outbound investments from India in 2012 were in the tune of around USD 14 billion. With the globalization trend poised to become stronger each year, we have launched a new series: Globalizing India Inc. As part of this series, we will keep you updated on the latest legal and tax developments from around the world that impact Indian companies including Indian financial institutions, mutual funds, private equity funds, banks and high net-worth individuals going outbound.
You may also access our M&A Lab where we provide case studies in which we dissect and analyze some of the big-ticket deals by Indian companies, such as the Warburg – Future Capital Deal, the Bharti Airtel Limited – MTN Group Limited Deal, the HCL Technologies Limited – Axon Group PLC Deal and more.
The trend of outbound investments from India gained momentum especially in the last decade and more particularly the later part of it. This trend was largely driven by the need for companies to grow organically as well as inorganically across geographies which, along with easy availability of financing in the pre-global financial crisis era, made it all the more easy for companies to make investments across borders.
The key strategic reasons for globalization have been search for new markets, access to new technologies, access to natural resources, product and market diversification, availability of low cost assets and finance and vertical integration. The gradual opening up of India’s regulatory and exchange control framework has added further momentum to the globalization wave.
While developing the strategy for outbound acquisitions, it is necessary to integrate a number of intrinsic and extrinsic factors, most of which vary depending on the industry and business model. Globalization requires reconciliation of elements such as legal and tax systems of multiple jurisdictions, geography, infrastructure, time zone, political conditions, safety of investments, economic certainty, language, culture and value systems.
In our primer on outbound investments by Indian companies, we have discussed various trends that have motivated Indian companies to globalize. We have also discussed the key regulatory and tax compliances that have to be considered in any outbound investment from India.
As part of our series on Globalizing India Inc, our globalization experts also provide insights on legal and tax developments from around the world that impact or may be of interest to Indian companies looking outbound. They will be happy to provide further insights should you desire.
We hope you will enjoy this series.