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PepsiCo chairperson Indra Nooyi’s announcement of a Rs33,000 crore investment in India over the next seven years is expected to provide a massive psychological boost to the government that is desperately trying to kickstart investment activity to revive the economy.
Pinakiranjan Mishra, partner at consultancy firm Ernst & Young, said Pepsi was taking a long-term view of the country.
“The consumer markets are not very regulated and are relatively free in India so you could expect similar announcements (from other consumer goods companies),” he said.
Nooyi exuded confidence about India’s long-term economic growth potential as she detailed the finer contours of PepsiCo’s investment plans.
Pepsi, which remains one of the country’s top advertisers, had last year bagged the Rs400-crore title sponsorship for India’s domestic cricket league .
“You’ve got to invest in the long-term fundamentals of the country,” Nooyi said. “We believe that fundamental India story is still strong... I think our investment shows confidence in India.”
“If you look at the middle class, which is going to be added over the next decade, it is such a staggering number, bigger than the populations of US and France combined or some thing,” she said.
Last year, Pepsi’s rival Coca-Cola had announced a $5-billion investment plan for India to be implemented from 2012 to 2020.
“Our hope is that whosoever is in power, manages this country consistently for all the potential the country has,” Nooyi said when asked about the current political climate in the country.
“Psychologically this (announcement) may create a positive sentiment in the country,” said E&Y’s Mishra.