...corporates facing tougher trading times in their traditional US and European markets, India's burgeoning consumer society and its cheaper production costs are attracting international players in their multitudes. The 8m new cellular contracts signed per month in India explain Vodafone's US$10.9bn appetite for a 67% stake in Hutchison Essar.

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Private equity funds and corporates alike are queuing up for exposure to India.

"A meaningful proportion of our clients have an interest in making acquisitions or entering into joint ventures in India. They are all waiting to be shown opportunities," says Daniel Confino, head of cross-border M&A at UK Investment bank Noble & Company Ltd, who principally advises mid-market clients.

Ian Gomes, chairman of KPMG's new and emerging markets practice for KPMG in the UK agrees, saying: "Every Fortune 500 company has an emerging markets strategy, of which India is more often than not a central part."

Recent research supports the growing prominence of India as a top destination for international cash. In an April-published survey entitled M&A Beyond Boarders published by Marsh Mercer Kroll, six in 10 of the 670 multinational executives questioned said that India, China and South East Asia would figure significantly, or very significantly, in their companies M&A strategies.

Research by India Advisory Partners demonstrates the huge inflow of international capital into India (see table). In 2007, international companies invested a total of US$29bn in Indian deals, compared with US$3.3bn five years earlier and US$13.6bn the previous year. Last year's figures were somewhat skewed by the Vodafone-Hutchison Essar deal. The total number of deals also rose, albeit at a lesser rate. In 2002, some 279 deals were completed by non-Indian corporates compared with 340 last year.

The slower growth rate of the number of deals done in India is indicative of the bottleneck situation...

NOTE: All illustrations and photos have been removed from this article.



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