The South Korean group Lotte and French automotive group Peugeot SA are currently in talks, with the two companies planning to invest around $6 billion combined into India. This would see the efforts by the country’s Prime Minister Narendra Modi’s attempts to attract foreign capital boosted. The plans to inject that much cash into Asia’s third-largest economy was revealed by a source that is close to the development.
Lotte is planning to invest around $3billion to $5 billion within the next five years, said the source who preferred to remain anonymous. The firm is looking to invest in India’s retail, chemicals, food processing and real estate. They also further plan to develop railway platforms in the country according to the source.
In a separate move, Peugeot SA, the automaker of Peugeot and Citroen cars is planning to invest 1 billion euros ($1.2 billion). The money will be used to build a car factory and an engine plant in southern India, according to the source.
The moves by the Indian PM after he launched “Make in India” has begun to yield fruits as he is encouraging foreign companies to manufacture locally by offering easier land acquisition. Further moves such as increasing the number of approvals and offering some incentives will make it easier for the companies to do business. The efforts of the PM has helped the country attain a higher position in the World Bank’s ease of doing business, with their rating in Moody’s Investors Services increasing last week.
Lotte whilst making a statement commented that, “Lotte is exploring various business opportunities in India and other countries, but there is nothing confirmed or discussed in detail as to which areas to enter and how much money to invest.” When contacted, the spokesman of Peugeot referred to journalists to their earlier statement in January where they aligned with C.K. Birla Group in India, with starting investment around 100 million euros.
Lotte has made plans to develop the urban real estate. They intend to do this by adopting railway stations and helping the country maintain them. The railway will give access to Lotte to run businesses such as restaurants, hotels, and shops added the source. The source further added that the confectionery sector of the company is concluding plans to set up a new factory in the country.