Indian companies' dream of turning global by going on an unprecedented acquisition spree in the UK this year seems to have soured after they were severely hit by the global financial crisis and steep fall in steel and auto demand.
The Indian acquisition trend, as the take-overs are labelled by the British stock market, was pioneered by the Tata's take over of British-based global companies Corus Steel and prestigious Jaguar and Land Rover.
It sparked off a serious look out by other companies to acquire strategically placed British firms as India emerged among the first five largest investors in British companies and equities.
The Indian companies' global interest in the British market ranged from auto, steel to companies involved in stock brokering and financial firms, according to Geneva based United Nations Conference on Trade and Development (UNCTAD).
But, the global meltdown and the November 26 terror attacks on Mumbai, the financial capital of India, had a chilling effect on the steady growth of trade and joint ventures between UK and India in 2008.
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The global meltdown has forced the Tata group to seek a billion-pound bailout loan from the British government, just nine months after they bought the luxury car marque.
The plea by the group came as a surprise to the British authorities, who expected the Tata group to have deep pockets to ride over the financial crisis.
Tata paid $2.3 billion for JLR and financed the acquisition with a $3 billion bridging loan. Since then sales of new cars have plunged which has caused big problems with the cash flow needed to service debt payments.
It came at a time when Tata — one of India's most successful companies — also faced financial crunch in their other ventures. It paid $11 billion 22 months ago for steelmaker Corus and since then the metal price has collapsed.
Added to that is the terrorists attack on the Taj Mahal Hotel which could have a long-term impact.
Things are turning tight for Tatas is evident from the fact that the British authorities are dithering over the loan and now according to British media, Tatas are injecting "tens of millions of pounds" into the British car company to prevent an immediate cash flow crisis.
The meltdown and the recession in most of the West European countries has put a temporary stop on moves by other Indian companies to enter the British market.
But, Britain still remains the most favoured choice of the Indian investors for foreign acquisition, as British and European companies are busy shifting service operations abroad to escape high administrative and management costs.
But, a silver lining in the Indo-UK relations emerged with a surprise year-end visit by Prime Minister Gordon Brown, aftermath the Mumbai terror strikes where he made it clear that London would stand by New Delhi in this hour of crisis and trade relations between the two countries would not be allowed to be impeded.