Indian Companies Boost Global Presence With 17% Surge In Overseas Investments

In a clear signal that Indian companies are increasingly looking to expand their global reach, outward foreign direct investment (OFDI) surged by nearly 17% to $37.68 billion in 2024, according to data from the Reserve Bank of India (RBI). This marks a significant increase from the $32.29 billion invested overseas in 2023.

Madan Sabnavis, Chief Economist at Bank of Baroda, highlighted the trend as a positive sign of India’s growing global footprint. “This reflects that Indian companies are not just focusing on domestic investments, but are also targeting opportunities abroad, diversifying their growth models,” Sabnavis said.

OFDI refers to the investment made by Indian companies in foreign entities, either through equity capital in unlisted firms, a stake of 10% or more in listed foreign companies, or through investments where Indian firms hold less than 10% equity but maintain control.

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The data reveals a marked shift like OFDI. Equity investment, for instance, jumped by 40%, reaching $12.69 billion in 2024, compared to $9.08 billion in the previous year. In contrast, loans extended by Indian companies abroad increased substantially to $8.7 billion from $4.76 billion in 2023. However, guarantees issued by domestic firms declined, falling to $16.29 billion from $18.44 billion the previous year.

Indian companies have shown interest in a wide range of sectors for overseas investments, including hotels, construction, manufacturing, agriculture, mining, and services. Countries like Singapore, the US, the UK, UAE, Saudi Arabia, Oman, and Malaysia have attracted a significant portion of this foreign investment.

Sabnavis pointed out that the growing investment by Indian firms in their subsidiaries abroad indicates an increasing trend of international expansion. “This also reflects a higher level of collaboration with foreign companies, especially in joint ventures,” he added.

Joint ventures (JVs) and wholly owned subsidiaries (WOS) have become vital avenues for Indian businesses aiming to boost their global presence. JVs are seen as a key mode of economic cooperation between India and other nations, providing access to technology transfer, research and development benefits, new markets, and enhanced brand image. These investments also promote employment generation and facilitate the use of raw materials available both in India and the host country.

Moreover, such overseas ventures contribute significantly to India’s foreign trade by boosting exports of goods and services, machinery, and plants. Additionally, they serve as important sources of foreign exchange earnings through dividends, royalties, and technical know-how fees.

As Indian companies continue to broaden their international reach, their increased investments in joint ventures and subsidiaries are not only helping them expand globally but are also fostering deeper economic ties between India and other nations.