Foreign direct investment outflow from India to Bangladesh increased 161pc, from $26 mn to $68 mn between 2011 and 2014, says KPMG, according to report bt Indian Business Standard.
Some of the major investments proposals from Indian companies include Reliance Power's $3 billion plan to set up a 3,000 mw power unit, based on imported liquefied natural gas, and Gujarat-based Adani Group plan to invest $2.5 bn in building a 1,600 Mw coal-fired power plant in Bangladesh.
The government there has also offered to establish two Special Economic Zones for Indian companies, beside allowing Life Insurance Corporation to start operations, says KPMG.
Over the past six-odd years, a number of Indian companies have started operations in Bangladesh, one reason for the high outward remittance from here.
Notably, the definition of outward remittance by the World Bank is wide, including those by workers, compensation of employees and migrants' transfers. Thus, remuneration of Bangladeshi employees by Indian companies in Bangladesh is counted as remittance.
"In recent years, there have been a number of acquisitions by Indian companies in Bangladesh. This apart, there have been a number of joint ventures and alliances by Indian companies; many Indian companies have (also) opened subsidiaries in Bangladesh," notes Ambarish Dasgupta, head of management consulting and eastern region at KPMG in India.-Asfar