A division of AOL-Time Warner, America Online, is all set to enter India. It proposes to set up a wholly owned subsidiary with an initial investment plan estimated at about Rs 500 crore.
The US-based Internet and entertainment group which has its focus on providing easy-to-use services for the mass market, is setting up a subsidiary to develop, manufacture and provide various software products in the Indian market. India will be the 17th country where America Online will be setting up shop.
The Foreign Investment Promotion Board is slated to take a decision on the company's proposal today. Indications are that the proposal may be approved with the rider that it will have to divest 26 per cent stake to domestic investors within 3-5 years.
America Online Plans to set up the wholly owned subsidiary with an initial investment of a little over $100 million. The US software major also plans to pump in additional investments over a period — the funds will be used to expand the Indian operations.
Though the businesses of the Internet-powered media and communication company includes interactive services, publishing, music, networks and film entertainment, sources said its proposed Indian subsidiary would be undertaking mainly the software development activities and internet-related services.
America Online also plans to use the proposed Indian subsidiary for sourcing some of the software products for AOL Time Warners’ international operations.