The government is advising India Inc to expand its international presence in a big way with the aim of giving a push to the creation of Indian multinationals.
Top government sources said the idea being shared with members of industry is that Indian companies should look beyond participating in and winning just global tenders abroad and then setting up project offices in those countries to complete their orders. “Instead, we are telling them to establish permanent establishments, and are ready to help them out in this regard through our missions in those nations,” the sources said leading Indian groups must look beyond a “camp office” approach.
Govt support through missions abroad
To aid their expansion and provide governmental help in tiding over regulatory hurdles, the Ministry of External Affairs has created three permanent desks in all Indian embassies in major countries. These desks are exclusively to help companies in creating permanent establishments in the countries where they see opportunities.
Officials said that the government’s advice as well as push to India Inc is to hedge risks, tap global talent, and integrate into international value chains. While it has already started happening, the time has come to give the process a further momentum.
In some ways, the trend is getting reflected in the numbers. India’s outbound investments jumped 75% to $29.2 billion in FY25, while foreign firms repatriated a massive $51 billion from the country. However, gross foreign direct investment (FDI) in the last fiscal saw a growth of 14% to $81 billion, including equity inflows exceeding $50 billion. So, while there were robust flows in either direction, the net inflow remained negligible.
Officials said that the government is not worried about Indian companies not investing much in the country but looking for overseas opportunities. “This is part of our strategy… to push these companies to invest overseas. When companies invest overseas, they keep some buffer, as a result of which their domestic investments are bound to remain stagnant for a while,” sources said.
Indian companies scaling up global bets
Explaining the rationale behind the idea, officials said that companies investing abroad would see returns coming by the 2030s.
“That’s when they will start getting dividends from their overseas investments, just like global multinationals get dividends and royalties from their investments in India done decades back,” sources said. “So, be it mines, minerals, telecom services, steel, metals, power, name any sector, we are pushing them to invest abroad with the aim of creating permanent establishments,” sources added.
Giving examples, officials said that companies like Bharti Airtel have already established a robust international presence, operating in 17 countries across South Asia, Africa, and the Channel Islands, serving approximately 590.8 million customers, with around 166.1 million in Africa alone. In August 2024, it acquired a 24.5% stake in the UK’s BT Group for $4 billion to expand telecom influence in Europe. Similarly, Reliance Jio, which predominantly has India-centric operations, is now aggressively building international connectivity through sub-sea cables and partnerships to support its global ambitions. “The idea is that more and more companies take such routes to global expansion,” officials said.
Around 419 Indian firms announced greenfield projects abroad in 2024. These basically focus on sectors like IT, fintech, manufacturing, energy, and hospitality, with key destinations including Singapore, Mauritius (for routing benefits), the US, UK, UAE, Saudi Arabia, and Europe. Companies are pursuing acquisitions, joint ventures, and new facilities to access technology, markets, and resources.
For instance, Larsen & Toubro invested $2.4 billion in its Saudi Arabia subsidiary to support hydrocarbon projects.
Oyo bought US-based Motel 6 for $525 million to expand hospitality footprints. In energy, the Adani Group formed a JV with Japan’s Kowa for green hydrogen production starting in 2027. Infosys acquired Germany’s In-Tech in April 2024 to enhance automotive R&D and on August 13 acquired a 75% stake in Versent Group, a wholly owned subsidiary of Australia’s Telstra Group, for over Rs 1,300 crore. The Aditya Birla Group has invested $50 million in a Texas epoxy resin facility.