On an overseas acquisition spree over the past few years, Indian companies, have suddenly become wary of making investments in foreign companies as a result of the current global economic crisis, a Columbia University report said on Monday.
The report "Indian FDI falls in global economic crisis: Indian multinationals tread cautiously" by the Columbia Law School and The Earth Institute at the Columbia University said after growing faster than other emerging markets for some time, Indian investments abroad declined in 2008 and will decline further in 2009 in an uneven pattern.
"The global economic crisis has made Indian firms wary of further expansion abroad. Consequently, actual Indian FDI outflows, which rose to a historic level of nearly USD 18 billion in 2007, fell by 6 per cent in 2008 to under USD 17 billion. This is the first absolute decline in OFDI since 1999," the report said.
Noting that the trend in the Indian overseas acquisitions in January–June 2009 compared to the corresponding period in 2008 confirms the decline, the report said between these two periods the value of such acquisitions fell by 65 per cent, from USD 8 billion to under USD 3 billion and their number fell from 140 to 28.