Tata stands by $26bn India investment

The Tata group, India’s powerful salt-to-steel conglomerate, has reiterated plans to invest $26bn in the country over the next five years, in a bid to dispel a belief that it is turning away from its home market.

Kishor Chaukar, managing director of the group’s strategic arm Tata Industries, said the Tata group intended to invest heavily in India’s power, steel and automotive sectors, as it seeks to double group revenues to about $150bn in the next five years.

The planned $26bn investments are predominantly for projects that have been previously announced and are already in the pipeline. They include a $3.7bn, 4,000-megawatt power plant under way in the western state of Gujarat, and a $4.4bn integrated steel plant that has been bogged down by difficulties in acquiring land in the state of Chhattisgarh, a hotbed of Maoist insurgency.

However, Mr Chaukar’s emphasis of Tata’s commitment to the domestic market came just a week after he told the Financial Times that the company was responding to an “alarming” deterioration in India’s business climate by encouraging group firms to look for investment options overseas to reduce “one-country” risk.

In a Sunday interview with the semi-official Press Trust of India, in which he outlined Tata’s ambitious plans for the country, Mr Chaukar downplayed the Tata group’s appetite for additional overseas acquisitions.

Ratan Tata, its chairman, has been open in expressing his dissatisfaction with the country’s governance, after being caught up in a high-profile telecommunications scandal.

Mr Tata was outraged when recordings of his private telephone conversations with his powerful corporate lobbyist, Niira Radia, were leaked to media organisations, which made them available on their websites.

For a company that prides itself on its image of probity, the public scrutiny of Mr Tata discussing behind-the-scenes manoeuvring to secure prized telecom spectrum with a close aide was an embarrassment, although neither Mr Tata nor any Tata group company has been charged with any wrongdoing.

Last week, Mr Chaukar warned that public frustration over the telecom scandal threatened to lead to nationwide protests against a political system seen as tainted by corruption.