India's businesses invest in high risk countries for high rewards

By Marc Castro

Oct 12, 2013 11:11 PM EDT

India's diplomatic efforts in Mozambique continued especially after large carbon energy resources were recently discovered in the African country. The support had included lines of credit and even high level diplomatic visits have been done by India towards the former Portuguese colony.

The private sector too have been saving up for their eventual entry into the Mozambique market, with possible businesses in coal and natural gas and other natural resource management endeavors, Indian firms such as Jindal Steel,ONGC Videsh Ltd and Oil India Ltd have bought stakes and interests in the country running up to the billions of rupees. 

One of the main drawbacks though is the inherent volatilty and political instability of Mozambique and other African countries like it. Aside from Africa, Indian businesses have also expanded their reach to other conflict ridden countries such as Afghanistan, Libya and Syria. 

According to Department of Public Enterprises Secretary OP Rawat, "So Indian energy companies have no other option but to hunt for cheaper assets in risky nations." This is fueled by the high risk, high reward opportiunities in these countries at relatively low levels of investment.

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