The world makes a beeline to growing India

By Shailendra Bhatnagar and Doug Young

HONG KONG (Reuters) - Americans, Europeans, Koreans, Japanese and even Chinese are making a beeline toward India either to buy stakes in local firms or to raise capital through its booming stock market to fund expansion.

The main areas that are targets of overseas investment in Asia's third-largest economy are the booming tech sector that depends on the growing tribe of low-cost, English speaking workforce and the galloping telecoms industry.

Several global firms at the Reuters Global Technology, Media and Telecoms Summit, held simultaneously in Hong Kong, Paris and New York, said they were keen to take a slice of the $700 billion economy, forecast to grow at a sizzling 8.1 percent this fiscal year.

"India is very exciting. IT developments are a national pride. I think that we are doing extremely well (there), but a consolidation would help us," Paul Hermelien, chief executive at Capgemini (CAPP.PA: Quote, Profile, Research, Stock Buzz), told Reuters in Paris.

"We are talking to several Indian companies."

Capgemini, Europe's largest computer consultancy, employs about 4,000 people in India.

Smaller European rival Atos Origin (ATOS.PA: Quote, Profile, Research, Stock Buzz) is also planning acquisitions in India's globally feted technology sector to boost growth. It is in talks with several companies.

Atos plans to increase its staff in India to 2,500 by the end of the year from 1,500 now. This 67 percent jump excludes any potential buyout of an outsourcing firm.

Computer services provider Electronic Data Systems Corp. EDS.N is eyeing medium-sized Indian technology companies that could deepen its offerings to customers.

"We see off-shoring as a major offensive weapon," EDS co-chief operating officer Steve Schuckenbrock said in New York.

Global firms such as General Electric (GE.N: Quote, Profile, Research, Stock Buzz) have long made India's $17.2 billion software sector a base of outsourcing IT services.

BEATS CHINA

India's red-hot wireless services market, which has overtaken China in terms of net monthly additions, has become both a source of capital and a magnet for investment.

Ports-to-telecoms powerhouse Hutchison Whampoa Ltd. (0013.HK: Quote, Profile, Research, Stock Buzz) plans to list its Indian mobile services operations this year to fund expansion in the world's fastest growing wireless market.

"It's an early-stage market," Managing Director Canning Fok said. "We're bullish."  Continued...