Credit crunch may have gripped the economy elsewhere, but India Inc is continuing to roar onto the global arena and is all set to become net exporters of deals to the developed world, according to global audit and consultancy giant KPMG.
"With outbound deals now having outnumbered inbound deals for the each of the last three six-month periods, India seems well set to become a net 'deal exporter' in the next Emerging Markets International Acquisition Tracker in 2009," KPMG said.
Reinforcing the growing power and international presence of Indian corporates, an analysis of deals between emerging and developed economies since 2003, shows there were 322 completed deals where Indian buyers have acquired companies in the major developed economies, KPMG said.
This, compared to 340 deals completed in the opposite direction, wherein developed economy entities bought into India, it said in its EMIAT study.
"This is testament to the growing power of the Indian corporate base. At a time when everyone is talking about the credit crunch and Sovereign Wealth funds, Indian trade buyers have simply continued doing what they have been doing for several years now," said Ian Gomes, Chairman, KPMG's New and Emerging Markets practice in the UK.
India is also far ahead of other BRIC (Brazil, Russia, India and China) economies in terms of becoming a net exporter of deals. Within EMIAT, in volume terms, the country's outbound deals now equate to 95 per cent of their inbound total.
By comparison, Russia boasts a 30 per cent figure, while China and Brazil lag behind at 12 and nine per cent respectively.
"As acquirers, they are now serious players on the world scene. In sporting terms, there is strength in depth here too; this is not just about the headline acquisition of Indian titans such as Tata. This is about an ability to strike overseas deals filtering down throughout the Indian corporate scene," Gomes said.
The EMIAT figures for the first half of 2008 shows 90 emerging-to-developed (E2D) deals set against 161 developed-to-emerging (D2E) deals.
Out of these, Indian buyers accounted for 50 of the 90 E2D deals and have been a major factor in helping the emerging economies narrow the gap with the developed economies.
Gomes, however, warned that even India is not immune from the worlds economic woes. Like anywhere else, the Indian economy is being affected by inflation and high interest rates, food and fuel prices, which would hit corporate profits and so may, in turn, delay investment spending.
While the Indian numbers have steadily risen, the other emerging economies have tended to register static deal activity numbers.
The low levels of activity registered in Brazil appear unusual. In five-and-a-half years, just 28 E2D deals were registered by Brazilian buyers.
"It's hard to say exactly why this is; maybe a lack of acquisitive tendencies, insufficient access to cash or debt or simply because sufficient domestic opportunities still exist, rendering overseas forays less important. Whatever the reason is, Brazil is rather being left behind in the BRIC charge overseas," Gomes added.
