Abhijit Joshi of Mumbai law firm AZB & Partners said that M&A in India has been growing fast thanks to "a relaxation of Indian foreign direct investment norms in various sectors, which has provided a boost in M&A deals."
"In the 1990s India did not allow foreign investment in almost any sector, and it has now opened it to all but four sectors," he continued.
"Inbound deals in India have grown from $5.1 billion in 2005 to $15.5 billion in 2007," Apurva S. Diwanji of Mumbai law firm Desai & Diwanji added. "The growth trajectory of [the economy] is 9%," Diwanji said. "We're not sure what 2008 is going to look like. There's been a slowdown this year. ... But the liberation [of M&A] is going to continue. We don't expect any change there."
Joshi pointed out that India does face some hurdles to further M&A activity, including:
- availability of liquidity
- valuations of Indian companies
- rising oil prices
- the global economic slowdown
- Indian national elections are less than nine months away
Nevertheless, looking at the potential upside for M&A and economic growth in 2008, Diwanji pointed out that "India is the world's largest democrary. ... We have a very young population, with about 70% of our population under 35, and we have a very high population of skilled workers." --
George White
