While, for many on the Left and on the right, multinationals remain anathema -- one wonders when they will get over the hangover of the East India Company -- many Indian companies themselves are now becoming multinationals.

Indian direct investment abroad has now gone past the $10 billion mark. And the driving forces are quite different from what they were during the licence-permit Raj.

At that time, some major Indian business houses established greenfield manufacturing joint ventures abroad, but most of them, with the exception of the AV Birla group, did not do very well. The Birla group's own ventures abroad were as much the result of business opportunity there, as of the frustration with the denial of industrial licences in India.

The situation has, of course, changed dramatically over the last decade. One can broadly classify Indian foreign direct investment under the following categories:

Backward integration: many large Indian companies in basic industry, such as steel, viscose fibre, copper and so on, have acquired upstream companies in resource-rich countries such as Canada and Australia.

Marketing: information technology and pharmaceutical sectors have also established a large number of companies outside India. While some of them are trying to develop stand-alone local operations, most act as marketing and market intelligence arms for the parent companies in India.

Energy security: some of the largest foreign investments have been made by ONGC [Get Quote]. Its subsidiary, ONGC Videsh, is now active in 15 countries in oil exploration.

Other public sector companies like Indian Oil [Get Quote] and Bharat Petroleum Corporation [Get Quote] Limited are looking at retailing in Sri Lanka, Singapore and south-east Asia, while Hindustan Petroluem Corporation Limited was looking at an investment in a refinery in Saudi Arabia.

Barring a major domestic oil find, Indian imports of oil will keep growing and, clearly, the ministry of petroleum under its energetic minister is encouraging investments abroad, including in gas pipelines, to improve India's energy security. In size, if not in number, the oil and gas sector will probably remain the largest single foreign investor for the foreseeable future.

Forward integration: Videsh Sanchar Nigam Ltd [Get Quote] and Reliance [Get Quote] have bought underground telephone cable networks at what look like attractive prices, from companies in bankruptcy, as a measure of integrating their domestic telephone networks in the international market.

Business strategy: Some Indian business groups are acquiring businesses abroad, in industrial countries as well, as a measure of conscious business strategy. The Tatas are, of course, leading the pack starting with the purchase of Tetley Tea some years back, National Steel in Singapore, Daewoo's [Get Quote] commercial vehicle unit in South Korea, and so on. The Mahindras have also bought tractor companies as a part of deliberate growth strategy. So have some in the auto-ancillary sector.

Indian banks and a few insurance companies have been operating abroad for a long time. There has not been much expansion of their activities over the last decade. It is only recently that they seem to be looking at acquiring or developing business abroad, much of which is still focused on non-resident Indians. The hotel industry also does not seem to have grown abroad fast in the last decade.

The attraction of Indian companies as employers has increased in recent years -- as witness the ability of companies like Ranbaxy [Get Quote], Jet Airways [Get Quote], and several Tata group companies to attract senior foreign nationals in top positions.

Even at lower levels, many companies in the IT or business processing outsourcing sector segment are able to attract junior or middle level personnel from Europe and the US to work for them in India. Working for an Indian company seems to be getting accepted as a respectable occupation even in the industrial countries.

Chinese multinationals: As in most other aspects of economic activity, Chinese multinationals are way ahead of their Indian counterparts (total FDI stock of $ 50 billion). To quote a few recent cases:

A Chinese company has purchased the $10 billion PC business of IBM.

The British government failed to persuade Shanghai Automobiles to buy MG Rover, a one-time British icon, which has since closed operations. SA is interested in Rover but is a savvy buyer and knows that it could pick and choose the parts of Rover to buy from the liquidator at cheaper prices, and without past liabilities.

China National Offshore Oil Corporation, the Chinese counterpart of ONGC Videsh, just failed to buy Unocal, a Californian oil company, recently sold for $18 billion. Indeed, BP, the oil major, recently acknowledged that it sees CNOOC, Sinopec, and Petro-China as "real competitors for the future".

A UNCTAD survey ranked China as the fifth-largest foreign investor over the next two years. For many countries in Africa and Latin America, China is already the second most important foreign investor, after the US.  Many such investments are aimed at feeding China's insatiable hunger for raw materials, energy and coal. Clearly, the Chinese are going places!