The Second Wave of Indian Investments Abroad

This article makes an assessment of the recent international expansion of Indian companies by contrasting it to the earlier – much more modest – wave of investments abroad. It also traces the evolution of the Indian government's policy towards outwards investments and makes the claim that an important reason for the rise of investments abroad is the gradual relaxation of the Indian government's restrictions on capital outflow after the economic reforms of the 1990s. The new Indian investments abroad are characterised by being dispersed over a very large number of countries and economic sectors and – most remarkable – Indian companies are now also targeting the markets in Europe and the USA through acquisitions of local companies. At the same time, Indian companies have continued to expand their presence in other developing countries, where their activities may contribute to both economic progress and a reduction of economic dependence on relations with developed countries.