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Coca Cola asks other global firms to invest in India

business Updated: Jun 26, 2012 20:29 IST

Beverages giant Coca Cola on Tuesday gave India a thumbs up as it asked fellow multinationals to put their money here, at a time when some global rating agencies have raised questions over investment climate in the country citing lack of policy reforms.

The Atlanta-based firm which on Tuesday announced investments of $5 billion by 2020 along with its partners in India, said irrespective of policies, the country has "a wonderful great future".

"...I think we didn't expect any policy changes (in India) when we announced the investment," Coca Cola Co chairman and CEO Muhtar Kent told reporters here in reply to a query.

Asking other multinationals to judge India on its potential, he said: "I invite all large businesses in the world to come and invest in India because it has a wonderful great future".

He said the company recognised India's potential considering its demographic, economic and social trends, which are all huge drivers of growth.

"We see a very great bright future for India and for the Indian business and I think we believe that there are many others which will follow like us and see that there is potential here and come here," Kent said.

His statement is contrary to the sentiments expressed by ratings agency Standard & Poor's which had earlier this month threatened to downgrade the country's credit rating to 'speculative grade' saying there were roadblocks to reforms.

"Slowing GDP growth and political roadblocks to economic policy making could put India at risk of losing its investment grade rating," S&P said in its report --`Will India Be The First BRIC Fallen Angel?'

S&P had lowered India's rating outlook to 'negative' from 'stable' in April.

Similarly, another rating agency Fitch had lowered India's credit rating outlook to negative, citing corruption, inadequate reforms, high inflation and slow growth.

Kent further said Coca Cola would not have committed to invest so much in India if it was not confident of the growth potential of the country.

Coca Cola's $5 billion investment announcement comes close on the heels of Swedish furniture retailer Ikea seeking government approval to invest 1.5 billion euro in India over the coming years.

Likewise, another US-based multinational GE has also said it would invest $200 million to set up a new plant in Pune for developing products for the energy sector.