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Mauritius top destination for Indians investing abroad; Germany loses attraction

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By: Rajnish Tiwari

According to a recent report appearing the Hindu Busines Line (6th Sept. 2011) Mauritius has emerged as the top desitination for Indian foregin direct investments. The official data suggest that Indian FDI outflows to Germany have gone down by as much two-thirds…

„Mauritius has again emerged as the hot destination for Indian corporates investing abroad. The US and Singapore seem to be loosing their attraction.

„The Finance Minister Mr Pranab Mukherjee, in a written reply in the Rajya Sabha on Tuesday, said that Mauritius, the US and Singapore have regained the top three places in attracting Indian capital but with one difference. Mauritius has registered very healthy growth, but investment in the US and Singapore has come down in comparison to the previous year. United Arab Emirates (UAE) has also registered positive growth, but investment in the Netherlands has come down to half while to Germany it is down to nearly one third.“ […]

(Read the complete report on the Hindu Business Line)

It must, however, be noted that a significant portion of outward FDI projects of Indian firms takes place by roping in subsidiaries already located aborad so that those investments are not necessarily captured by official data. Moreover, it is not improbable that a significant portion of the FDI to Mauritius is actually routed further to other countires in order to take advantage of favourable taxtaion treaties. Nevertheless, we cannot deny that Indian investments to Germany have, in recent past, neither kept pace with the overall development of Indian outward FDI nor with the growth level of the Indo-German bilateral trade relations. Nonetheless, the investment activity has remained encouraging, the offical figures not withstanding.

On the issue of recent developments and challenges in Indian outward FDI to Germany also see:

Tiwari, R. (2011): Investment Destination Germany: Chances & Challenges for Indian Firms, in: Business Guide Germany India 2011/2012, pp. 96-97, Berlin: Wegweiser.

REpower Invests in German Production Sites

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Source: Company press release, dated 13.09.2011

Hamburg, 13 September 2011. REpower Systems SE (WKN 617703) is realigning its German production sites for wind turbines. Today, Tuesday, 13 September, the company is holding the topping-out ceremony for the expansion of nacelle and hub production in Bremerhaven. Starting in 2012/13 financial year, it will be possible there to assemble wind turbines each year with an output of 900 megawatts (MW). Up to now, the annual production capacity was 600 MW.

At the same time, the assembly hall at the Trampe/Eberswalde (Brandenburg) location is being converted to enable production of REpower’s 3.XM three-megawatt series in four assembly areas in future. The company is investing a total of some EUR 10 million in expanding the two production locations.

“REpower leads the way for multi-megawatt offshore turbines and our 3.XM series, which was launched in 2008, is also in great demand on the market”, commented Gregor Gnädig, Chief Operating Officer (COO) of REpower Systems SE. “We have to re-position our three German plants and expand capacities in good time. The European offshore business will also increase significantly over the next few years”.

At present, REpower only assembles MM-type turbines with 2-megawatt nominal power at Trampe. To convert to the new platform, the electrical test facilities in particular have to be adapted. “The capacities for producing the international ‘REpower bestseller’, the MM series, are to be relocated to Husum and the locations in Portugal and Padubidri”, explained Gnädig.

The first 3.XM nacelles and hubs will be produced in Trampe by the end of the year.

Editor’s note: REpower Systems is a subsidiary of India’s Suzlon Energy Ltd.

Media Reports: Suzuki dissolves partnership with Volkswagen

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12.09.2011. Media reports suggest that Suzuki has decided to dissolve its partnership with German carmaker Volkswagen (VW). There was apparently discontentment because of Suzuki’s decision to source diesel motors from Fiat. The partnership was especially interesting as it was meant to enable VW a strategic leverage for its India operations. Suzuki’s Indian subsidiary Maruti Suzuki is a dominant automobile player in India especially in the segment of small cars.

See:

For some news reports in German media click here.

Israel asks India to help in reducing poverty in Middle East

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From: The Economic Times, 8th Sept. 2011:

JERUSALEM: Acknowledging India’s growing status as a regional economic power, Israel’s President Shimon Peres has asked New Delhi to use its strength in solving the problem of poverty in the Middle East.

Israeli President also asked India to „help the Arab states in addressing their developmental challenges“, sources here told PTI.

Continue reading the article at the Economic Times….

Infosys reportedly gave up China investment plans for IPR fears on clients‘ side

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According to a news item appearing the Economic Times (7th Sept. 2011) Indian IT major Infosys gave up its plans for increasing foreign direct investment (FDI) in China as its major customers in Europe and the USA had apprehessions about their data procession and/or software-related work being done in China owing to fears about the protection of intellectual property rights.

The report cites as source a US diplomatic cable which has been released by WikiLeaks. It also narrates an incidence, which N.R. Narayana Murthy, Co-founder of Infosys reportedly told US diplomats:

Murthy said he understood the misgivings of his clients and narrated his experience in China to show how rampant piracy was. Stepping out of his central Beijing hotel to go for a stroll with Peter Bonfield, then CEO of British Telecom, they encountered a sidewalk vendor selling pirated Microsoft and Windows products.

Bonfield jokingly asked the vendor if he had Finacle (an Infosys banking software product) and the vendor replied: „I can get it for you tomorrow.“

Murthy, was at the same time quite clear about China’s potential, its qualities, and HR problems that it faces, as is clear from the next section:

Murthy, however, was optimistic about the long-term potential of China. As per the cable, he stated: „There is nobody better than the Chinese at solving a problem once they are serious about it.“ Murthy said it would take four to five years for the Chinese to overcome that reluctance.

There were other concerns for Infosys to expand in China. Murthy told the diplomats that though qualified graduates were available, those with sufficient English skills commanded a high premium. He said retention was more difficult in China than in India, as Chinese professionals are more willing to leave for a higher salary where Indian ones value institutions a bit more.

The whole report is available at: The Economic Times (11.09.2011)