Foreign Multinational Companies are investing a good deal of money in India. And why not??? The way Indian economy has grown in past few years, India seems to be a very good option to invest. With low labour costs, economies of scale, low input costs and huge market India seems to be haven for the large companies to invest. Further, increased infrastructure spending and higher consumption from the rural sector is also one more reason to step up the investments in India.

Records show that the MNCs investment in India where slowed down during the period from 1996 to 2003 but in the recent years have again gone up. Analysts said that there is a “re-rating” of the share prices of MNCs happening at the moment, which will see investors willing to pay higher price for the shares of MNC firms in the stock markets.

Thanks to the buoyant economy and huge potential in the infrastructure and engineering sector, there is a renewed interest in India by the MNC. Hence we see Siemens announcing the setting up of an industrial steam turbine factory as Vadodara, Gujarat. Engine maker Cummins India (subsidiary of Cummins Inc of United States) is also setting up a manufacturing facility in Pune. Ciba Specialty is investing 50 Crores in Goa and another 70 Crores in Gujarat through its fully owned subsidiary Diamond Dye Chem. Ltd.

Wartsila India, promoted by Wartsila Corporation of Finland, has also announced fresh investments in India. On the FMCG front, Nestle India’s new factory at Pantnagar is expected to start commercial production in the second half of 2006. Hindustan Lever, meanwhile, is increasing its rural focus further. Procter & Gamble is also expanding in the country, though all the fresh investments are being done through its wholly-owned arm P&G Home Products.

MNC s are making fresh investments and the existing MNCs are wanting to invest more. With this kind of investment coming in, a lot good is expected for our country in terms of better employment opportunities, growing domestic consumption levels, development of the rural sector, better technology coming in etc.

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