Further discouragement has come from a slew of stalled projects, including South Korean steelmaker POSCO’s plans to build a US$12-billion steel mill — first announced in 2005 and trumpeted as India’s biggest foreign investment deal.
Late last month, an Indian tribunal suspended environmental clearance for the plant, keeping the project in limbo.
However, many global companies have little choice but to enter the increasingly affluent country of 1.2 billion people if they want to boost revenues in light of the slowdown in developed economies, Mutton said.
“You cannot afford not to be in India as a marketplace when you look at the huge population,” says Mutton, whose India advisory business has tripled in size over the past few years.
“In boardrooms around the world, people are saying if we are going to deliver growth, where do we go? India inevitably comes up. They may know it will be a pain in the backside, but they have to make the best of the situation,” he said.