China’s most aggressive cross-border investor has now signed up to be the biggest foreign player in India, after Dalian Wanda reached preliminary agreement with the Indian government for a $10 billion industrial zone.
The plan for Wanda Industrial New City in India’s Harayana state would cover more than 13 square kilometres in its first phase and, according to some estimates, would be the largest foreign investment in India to date.
The deal comes after Wanda boss Wang Jianlin met with India Prime Minister Narenda Modi last year, and is the latest in a flurry of mega-deals involving Wanda this that commit the company to more than $15 billion in new projects.
Developing a Home for Chinese Companies in India?
Construction on the first phase of the development project may begin this year, according to a report in Bloomberg. Wanda expects the industrial zone to houses companies making everything from automobile to software, as well as biomedical products.
While this latest agreement has been given extensive coverage in the Indian media, it is actually the second time that Wanda has signed a preliminary deal to develop industrial zones in India. In late 2012 the company had signed a memorandum of understanding with Indian tycoon Anil Ambani’s Reliance Group to set up a joint venture for creating integrated township projects including commercial buildings and residential apartments, hotels and retail space in Navi Mumbai and Hyderabad.
No developments were actually built under that MOU.
The interest in creating factory-centred projects may, however, fit with India’s rapidly developing economy. In China, industrial zones have been a key part of the country’s development since it opened up its economy and typically include commercial and residential real estate development, as well as clusters of factories and workshops in industrial parks.
While not referred to explicitly by Wanda or the Indian government, “Wanda Industrial New City” coincides with a push by the Modi government to attract Chinese investment to India and is likely targetted as a corporate home for Chinese companies.
Already last year Chinese smart-phone maker Xiaomi began assembling its low-cost handsets in India, and mainland construction equipment maker Sany Group promised to invest up to $5 billion in the country.
Wanda itself has plans beyond just building workshops in India, with the company indicating that a theme park and residential development may be included in the project.
Wanda Continues to Ramp Up Overseas Deals
The industrial zone agreement is the latest multi-billion mega-deal for Wanda as the Chinese conglomerate invests in everything from movie studios to hospitals, in addition to factories.
Already this month Wanda agreed to buy US movie-maker Legendary Entertainment for $3.5 billion, and signed a joint venture deal with a UK hospital operator to build $2.3 billion in healthcare facilities in China.
Those January blockbusters followed soon after Wanda opened five new mainland malls in December, as well as an office tower and a five star hotel. While a major acquisition by most standards, when Wanda’s AMC theatre chain acquired a Texas cinema operator and its 33 theatres last month for $170 million, the news struggled to make headlines beyond trade publications.
Following the record $3.7 billion Hong Kong IPO of its commercial property wing in December 2014, Wanda