India beats Asian rivals in Middle East private capital deals since 2020 - report
06/03/2024 16:55
By Bansari Mayur Kamdar
BENGALURU, Mar 6 (Reuters) - India has emerged as a key
beneficiary of private investment from the Middle East in the
last three years as diplomatic pacts facilitated deals and
investors sought to tap into the South Asian country's growing
market potential, a report has shown.
Cross-border investment activity from the Middle East to
Asia has gained momentum, according to a report by the Global
Private Capital Association (GPCA), with total cross-regional
private capital deal values cumulatively reaching $83 billion
since 2020, compared to $14 billion between 2016 and 2019.
India accounted for more than half of all Asia deals
with Middle East investors and 58% of the capital invested in
Asia during the period, outpacing China and Southeast Asia.
The country has led Asian markets "driven by strong SWF
(Sovereign Wealth Fund) interest in leading tech and consumer
digital platforms such as Jio Platforms, Flipkart and Reliance
Retail Ventures," the report, released last week, stated.
Overall foreign direct investment flows into the country had
steadily increased till 2021-22, but dipped in the last two
years, according to data from the Department of Promotion of
Industry and Internal Trade. In the nine months ended December
2023, India attracted FDI inflows of $51.5 billion.
"India's relatively strong economic growth prospects seem to
be a key reason why the country is drawing in greater investment
from public asset owners, including those from the Middle East,"
said Nikhil Sanghani, managing director, Economic and Monetary
Policy Institute at OMFIF.
"There are longer-term structural factors that also favour
India's economy, such as its positive demographic outlook, rapid
digitalisation and financial deepening."
Abu Dhabi's sovereign wealth fund Mubadala Investment
Company and Goldman Sachs announced last week that they had
agreed to a $1 billion private credit partnership to invest in
Asia Pacific, with particular focus on India.
Mubadala also bought a minority stake in Indian private
hospital chain Manipal Hospitals in February.
Meanwhile, the Abu Dhabi Investment Authority (ADIA)
invested $598 million in Reliance Retail Ventures last October
and $500 million in India's Lenskart LENS.NS in March 2023.
Diplomatic and trade agreements between the two regions,
such as the UAE-India Comprehensive Economic Partnership and the
expansion of BRICS, paved the way for private capital
partnerships, the GPCA report said.
Global leaders also announced the India-Middle East-Europe
Economic Corridor last year, seeking to counter China's Belt and
Road push on global infrastructure.
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Cross-Border Investment in Asia and Middle East ($, billions)
https://tmsnrt.rs/3Is56k8
Asia Private Capital Deals with Middle East Investors
(2020-2023) https://tmsnrt.rs/3Pb2xHb
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(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Pooja Desai)
((BansariMayur.Kamdar@thomsonreuters.com; Follow on X:
@BansariKamdar;))