Belfast Telegraph

Securing slice of India's economic miracle comes at a price

India's stellar economic growth, which was barely touched by the global downturn, has for some time been expected to prompt a mergers and acquisitions boom in the country. But while foreign corporations are keen to secure their slice of the cake - and to get results quickly, rather than starting from

scratch - India has always been protective of its domestic businesses, with tough regulation limiting the access of foreign buyers to many industries.

Could the country's hardening attitude towards the taxation of company takeovers be a new front in the battle against multinationals?

First Vodadone felt the hot breath of the Indian tax authorities on its neck, and now Kraft is running into a spot of bother too. In Vodafone's case, the telecoms giant is still fighting court rulings that it must pay £1.6bn of capital gains tax following its takeover of Hutchison Essar, India's biggest mobile phone company, three years ago.

Now there are calls for Kraft to face a similar charge on its purchase of Cadbury's Indian business, which it took over when it bought the confectioner last year. Politics may be part of the picture. India's coalition government, rocked by links to a series of corruption scandals, is under pressure to show the electorate it is on their side. But whatever the motivation for the increasingly aggressive approach of India's tax authorities - don't bet on that M-amp;A boom materialising just yet.