India Attracts Big IT Investors
India Attracts Big IT Investors
(04/07/99, 12:21 p.m. ET)
By Uday Lal Lekshman Pai, TechWeb
The world's technology leaders are lining up to establish operations in India, bringing millions of dollars of investment into the country.
Big names such as IBM, Hewlett-Packard, Computer Associates, LG Electronics (formerly Goldstar), Nortel Networks, and 3Com have all put in proposals for fresh foreign direct investment (FDI) in India.
Chicago-based Tellabs has received Foreign Investment Promotion Board (FIPB) clearance, and country manager C.S. Rao said it planned to start manufacturing by early next year. The company would invest more than $25 million through a wholly owned subsidiary.
Round Rock, Texas-based Dell is also setting up a subsidiary in India. Ron Goh, Asia vice president, said formalities would be completed by the end of the year, and the initial investment would be $8 million to $10 million.
Meanwhile, Computer Associates International is location-hunting for its second development facility in India after Calcutta. "We plan to have three or more development facilities in the five-year period for which we have ear-marked $100 million," said CA India president and chief operating officer Sanjay Kumar.
Nortel Networks sources said the Canadian networking giant was also planning to make substantial investments in India. However, they declined to give figures.
Santa Clara, Calif., networking pioneer 3Com will set up a wholly owned subsidiary within the next two months and make India a logistics hub for its operations in the neighbouring countries, bringing in substantial investments, according to the India country manager of 3Com Asia, Atul Kunwar. There are also plans for a joint venture with an Indian IT company to make India a development hub.
Schaumberg, Ill.-based Motorola is evaluating the possibility of manufacturing WAN and LAN products in India. According to Motorola's Asia-Pacific general manager, Benny Young, setting up a manufacturing facility here would give the company an edge in terms of bringing down the time to market.
Major players such as IBM, HP, and Samsung have put in proposals for FDI under the government's proposed soft-bonded information technology units (S-BIT) scheme.
The companies, which also included Acer, Nokia, and Motorola, have sent proposals to the Prime Minister's national IT task force to invest under the scheme that is expected to provide a duty-free area and what the industry considers as the right environment for incentivized manufacturing.
The task force has received firm proposals from IT and electronics companies for FDI of more than $100 million.
"If we manage to create the manufacturing environment as recommended in the task force report, it would open the floodgates for an investment of at least $1 billion within a year or two. More important, it would make India as much an IT superpower in hardware as it is in software," according to task force member-convenor S. Seshagiri.
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