Reforms push too late coming, foreign firms shut shop in India
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The government's renewed enthusiasm for reforms may have come a bit too late for a bevy of foreign firms that have already exited the country since the beginning of this year, blaming inclement policy environment and lack of investment avenues.
While the US insurance major New York Life and American mutual fund major Fidelity Worldwide Investment sold off their operations in India earlier this year, Motorola has announced plans to axe about 20 per cent of its global workforce and shut shop in several markets, including India. Germany's Fraport, the world's second biggest airport operator, had said in June it was shutting its development office in the country.
Abu Dhabi-based telecom firm Etisalat and Manama-based Bahrain Telecommunications Co (Batelco), whose licences were among those cancelled by the Supreme Court in February, have already marked an exit. In the power sector, AES India, an arm of the one of the earliest global entrants into India, US electricity major AES, too has announced an exit from a majority of its India operations, industry players said.
"With policy inaction, corruption and adverse judicial verdicts battering the overall investment sentiment, big names in key sectors making an exit does not augur well for the country's growth story. India, as a macro call, is clearly losing its sheen," an investment analyst said.
Among the big names, Google-acquired Motorola is reportedly shutting down its operations across much of the Asia Pacific, coming close on the heels of Motorola Mobility CEO Dennis Woodside's comments that the company would be letting go of 20 per cent of its workforce and cutting down on its India operations. Email sent by The Indian Express to Motorola media incharge for Asia Pacific Will Moss on August 30, 2012, remained unanswered. Google had acquired Motorola Mobility for $12.5 billion in May this year.