Washington, Sep 27 (UNI) Finance Minister P Chidambaram today highlighted the rapid strides made by India Inc, saying that their soaring balance sheets have given them financial muscle to take on new global challenges.
''The reforms of the Indian financial markets have led to efficiency gains in financial intermediation and leading business houses are able to borrow cheaply in the Indian market,'' Mr Chidambram said delivering a lecture at Wharton School, University of Pennsylvania.
The Finance Minister was speaking on the theme: 'Indian business from local to global." "Valuations have soared, enabling companies to raise large amounts of equity capital", he said.
The corporates have been allowed to borrow from abroad, and there is a rush to raise funds through the External Commercial Borrowing route.
''The acquisition urge has seized both big and small Indian companies. Not only manufacturing companies and service providers, but also smaller firms doing contract research have coveted overseas opportunities in areas such as clinical research, bio-equivalence and data management,'' Mr Chidambaram said.
The policy changes have also ushered in a process of reforms, especially in the infrastructure sector, capital markets, the financial sector and taxation.
''One of the consequences of a fiercely competitive market economy is the need to remain close to the market and to retain market share,'' Mr Chidambaram said.
Growing the market share and remaining close to the market are the principal factors driving Indian business to go from local to global, he said, adding that other factors encouraging Indian businesses to go global are the need to procure natural resources like minerals and ores, ensuring energy security, access to new technology, seeking patents, leveraging research and development capabilities, obtaining new product mix, finding strategic partners, building complementary businesses, establish forward and backward linkages, and raising cheaper global capital.
Indian companies are racing to the top in sectors such as pharmaceuticals, castings and forgings, paints, digital-recording devices and wind energy equipment.
Indian companies with a mix of smart management, low-cost and increasingly, aspirations has helped the young entrepreneurs join the elite ranks of multinationals.