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Business Exclusive Headlines News

Foreign cos in India on quit mode

New Delhi, June 9  () : The latest company that is quitting India is Germany’s Fraport, the world’s No. 2 airport operator. Weak rupee, slowdown and many roadblocks to policy implementation have made foreign companies pack their bags.

Fraport came in 2006 since the country was to build small airports in smaller cities in the private sector. Six years later they realised that all these schemes were only on paper.The telecom companies who came in seeing the potential were rudely hit when the spectrum sale scandal popped up leading to court battles. After getting licences and paying heavy amounts they now find themselves back to square one with Court ordering the cancellation and calling for fresh auction.

Etisalat ETEL.AD of Abu Dhabi and Bahrain Telecommunications Co BTEL.BH, whose licences were ordered cancelled by the Supreme Court have quit. The governments of these countries have been miffed with India.

Norway’s state-owned Telenor (TEL.OL), invested roughly $2.5 billion in India and now its licences ordered cancelled, has threatened to pull out, Norway through diplomatic channels is trying one last shot to get favourable rules and lower price for airwaves to be auctioned.

Multinationals pulled $10.7 billion out of the country in 2011, an increase from $7.2 billion in 2010 and $3.1 billion in 2009. In 2012 March, the data shows that an 88% increase in foreign investment was seen with two billion dollar energy deals to a record $36.5 billion.

With India’s economy slump to 5.3 percent in the March quarter, the lowest in nine years and way below the 9 percent pace which attracted foreign investment before the euro zone financial crisis has made India not so lucrative. The news in business cirles about India’s biggest foreign investor,the UK mobile phone giant Vodafone (VOD.L) fighting a multi-billion-dollar tax demand has not gone well to those coming to India or to those already set up shop.

New York Life NYLIN.UL and U.S. mutual fund giant Fidelity Worldwide Investment and Augere, which owns 4G broadband have downed the shutters due to regulations that keep changing. Insurance and mutual fund companies from abroad are facing losses and might quit if reforms do not come in and markets start improving.