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NEW DELHIThe Tata Group plans to invest more than 450 billion rupees ($8.3 billion) in India during the next two years and broaden the conglomerate's global expansion efforts, especially in the emerging markets of Asia, Africa and Latin America, new Chairman Cyrus Mistry said.
The investment will add to the 500 billion rupees spent by Tata companies in India during the past three years, Mr. Mistry said.
The plan comes as a stamp of approval for local and foreign investors regarding the attractiveness of India as an investment destination, despite an economic slowdown and weak consumer sentiment.
It also heralds a sign of optimism after the previous chairman, Ratan Tata, cautioned last week in his farewell message to the Indian group's employees that the difficult economic environment will likely continue for most of 2013 and prompt the conglomerate to cut costs.
India's economic activity, which remained weak for most of 2012, is showing signs of a turnaround. Investor sentiment toward the country has also improved after a raft of pro-business measures from the government since mid-September, including increasing the limit of foreign investment in sectors such as retail, civil aviation and broadcasting.
Manufacturing activity has rebounded in recent months. Government data showed an 8.2% increase in October industrial output, the strongest pace in 16 months, and an HSBC HSBA.LN -0.48% survey indicated a sharp expansion in manufacturing activity in November and December.
The government has promised more policy steps and the central bank has indicated that it could reduce interest rates starting this quarter to speed up economic activity.
"The recent emphasis on policy clarity and a renewed thrust to economic reforms by the Government of India is encouraging," Mr. Mistry said. "With a sustained focus on policy stability and implementation, I believe that India would continue to be an attractive investment destination."
Mr. Mistry, 44 years old, took over from Mr. Tata last week as the chairman of the Tata Group, which owns more than 100 companies world-wide, including luxury-car maker Jaguar Land Rover PLC.
The group is credited with developing the world's least-expensive car, the Nano. It expanded globally during Mr. Tata's tenure, acquiring companies such as Anglo-Dutch steelmaker Corus Group PLC, NatSteel of Singapore and Jaguar Land Rover and Tetley Tea of the U.K.
Tata Group's interests also are spread across sectors such as chemicals, hospitality, real estate, salt and software, and it derived 58% of its $100.09 billion in revenue from foreign operations in the financial year ended March 31, 2012. It has operations in more than 80 countries and employs more than 450,000 people world-wide.
Mr. Mistry is the son of a construction baron who is the largest shareholder in Tata Sons, the Tata Group's holding company.
The investment plan was part of Mr. Mistry's first letter to Tata employees as the group's chairman. The Wall Street Journal has seen a copy of the letter.
"Apart from India, we will be required to work to both deepen and widen our global engagement with an emphasis on emerging markets in Asia, Africa and parts of Latin America, adding to our existing presence in Europe and America," Mr. Mistry wrote in the letter.
"Of course, each company's path to globalization will be different, with differing approaches to the spreading of risk, acquisition of technology, access to talent, and investment in long-term growth markets," he said.
The investment will add to the 500 billion rupees spent by Tata companies in India during the past three years, Mr. Mistry said.
The plan comes as a stamp of approval for local and foreign investors regarding the attractiveness of India as an investment destination, despite an economic slowdown and weak consumer sentiment.
It also heralds a sign of optimism after the previous chairman, Ratan Tata, cautioned last week in his farewell message to the Indian group's employees that the difficult economic environment will likely continue for most of 2013 and prompt the conglomerate to cut costs.
India's economic activity, which remained weak for most of 2012, is showing signs of a turnaround. Investor sentiment toward the country has also improved after a raft of pro-business measures from the government since mid-September, including increasing the limit of foreign investment in sectors such as retail, civil aviation and broadcasting.
Manufacturing activity has rebounded in recent months. Government data showed an 8.2% increase in October industrial output, the strongest pace in 16 months, and an HSBC HSBA.LN -0.48% survey indicated a sharp expansion in manufacturing activity in November and December.
The government has promised more policy steps and the central bank has indicated that it could reduce interest rates starting this quarter to speed up economic activity.
"The recent emphasis on policy clarity and a renewed thrust to economic reforms by the Government of India is encouraging," Mr. Mistry said. "With a sustained focus on policy stability and implementation, I believe that India would continue to be an attractive investment destination."
Mr. Mistry, 44 years old, took over from Mr. Tata last week as the chairman of the Tata Group, which owns more than 100 companies world-wide, including luxury-car maker Jaguar Land Rover PLC.
The group is credited with developing the world's least-expensive car, the Nano. It expanded globally during Mr. Tata's tenure, acquiring companies such as Anglo-Dutch steelmaker Corus Group PLC, NatSteel of Singapore and Jaguar Land Rover and Tetley Tea of the U.K.
Tata Group's interests also are spread across sectors such as chemicals, hospitality, real estate, salt and software, and it derived 58% of its $100.09 billion in revenue from foreign operations in the financial year ended March 31, 2012. It has operations in more than 80 countries and employs more than 450,000 people world-wide.
Mr. Mistry is the son of a construction baron who is the largest shareholder in Tata Sons, the Tata Group's holding company.
The investment plan was part of Mr. Mistry's first letter to Tata employees as the group's chairman. The Wall Street Journal has seen a copy of the letter.
"Apart from India, we will be required to work to both deepen and widen our global engagement with an emphasis on emerging markets in Asia, Africa and parts of Latin America, adding to our existing presence in Europe and America," Mr. Mistry wrote in the letter.
"Of course, each company's path to globalization will be different, with differing approaches to the spreading of risk, acquisition of technology, access to talent, and investment in long-term growth markets," he said.
