Indian firms are acquiring firms abroad to leverage comparative advantage of foreign locations, to acquire appropriate technologies and to have a marketing and distribution base with the ultimate objective of attaining economies of scale and productivity gains. As noted earlier, India’s direct investment overseas amounted to US $ 2.7 billion during the year (Chart 23).
The value of acquisitions is, however, much higher since these data only capture the cross-border remittance of outward FDI from India. The number of Indian companies listed on stock exchanges abroad has seen a consistent increase. The growing integration of the Indian corporate sector is also visible from the trends in their exports and imports.