Most overseas ventures by Indian enterprises have failed miserably

NINE years after they made the biggest ever overseas investment from India, Tata Steel - once the largest company in the country - is putting a lid on its losses in its ailing steel-making facilities in England. The Anglo-Dutch company Corus, which it spent US$12.8 billion buying up, has been a continual drain on its resources, so that the company's UK assets now have a book value of "almost zero".

The European operations of Tata Steel have a total capacity of about 13.5 million tonnes of which about seven million tonnes are in the UK. In FY2016, the company's European operations produced 10 million tonnes of steel compared with 6.8 million tonnes in India, but in Europe it incurred a Ebitda loss of 3.4 billion rupees (S$68.9 million)compared with a profit of 871 billion rupees in India.

It is thus not surprising that Tata Steel announced at the end of March that it planned to sell its UK steel business. Thus while loss of jobs - Tata employs some 15,000 in the UK - is a worry for the UK government, the company's survival is of greater concern for its directors.