New Indian Union Budget Keystones: Infrastructure and Tax Cuts

BETHESDA, MD, Jul 07 (MARKET WIRE) --
India Globalization Capital, Inc. (NYSE Amex: IGC), a leading
infrastructure and materials company competing in the rapidly growing
infrastructure industry in India, comments on India's new budget and its
importance for India Globalization Capital.

Yesterday the new Union budget was released, the keystones of which
directly benefit India Globalization Capital. While Indian market
investors decried parts of yesterday's budget as not having enough
structural policy changes and too many deficit increases, the budget is a
strong statement about the will of Indian policy makers to increase the
competitive horsepower of the country's economic engines. Through a series
of well planned and well funded programs, the new budget keeps India in a
leadership position among the BRIC countries. "Keystones to the new budget
exist and will causally affect our Company: 1) infrastructure spending, 2)
tax cuts," stated Ram Mukunda, Chief Executive Officer of India
Globalization Capital. The Times of India reported yesterday that with
government spending of $21 Billion in 2009, an increase of 36%
year-over-year, Finance Minister Pranab Mukherjee believes India's growth
rate will be back to 9% "as soon as possible" and that the growth rate in
2009 should reach 6.7%.

"The planned increases in infrastructure spending within the new budget
are: 1) an increase of 23% for highway improvements and build-outs, 2) an
increase of 87% for the National Urban Renewal program, and, 3) an
increase of 45% for the Bharat Niram Infrastructure Project, a time-bound
project designed to build 146,185 kilometers of roads and highways in
2009, and provide for housing, irrigation, electrifications, and
teleconnectivity build-outs throughout India," stated Mr. Mukunda.
"Additionally, the Indian government extended all incentives to
infrastructure projects planned through March 2010, extending another
layer of pro-business policy for our industry in general," Mr. Mukunda
continued.

The tax benefits and extensions passed in the new budget are expansive.
Notably, the tax provisions that will positively affect India
Globalization Capital are: 1) personal income tax reductions, 2)
abolishment of the Fringe Benefit Tax on businesses that stifled business
in recent years and that will allow for greater reinvestment, 3) a tax
holiday on natural gas and other energy sources. Each tax benefit bears
directly on businesses in India by helping to pave the way for
reinvestment in India's badly needed infrastructure programs, as well as
allowing companies more flexibility to expand worker benefits.

About:

India Globalization Capital is a construction and materials company
operating in India, which builds roads, bridges and highways, and provides
materials to the infrastructure industry in India and China.

The company has offices in Maryland, Mauritius, Nagpur, Cochin, Delhi, and
Bangalore. Copies of the Form S-3 and India Globalization Capital's other
filings with the SEC containing information about India Globalization
Capital, our Indian operations and other relevant documents, are available
at no charge on the SEC's website (http://www.sec.gov).

For more information about India Globalization Capital, visit the
company's web site at: www.indiaglobalcap.com.

Forward-Looking Statements:

This press release may contain forward-looking statements. These
statements reflect management's current views and are subject to risks and
uncertainties that could cause actual results to differ materially from
those projected, expressed or implied in these statements. Factors that
could cause actual results to differ, relate to: (i) ability of the
parties to successfully execute on contracts and business plans, (ii)
ability to raise capital and the structure of such capital including the
exercise of warrants, and (iii) exchange rate changes between the U.S.
dollar and the Indian Rupee. We undertake no obligation to publicly
update any forward-looking statements, whether as a result of new
information, future events, or otherwise. Other factors and risks that
could cause or contribute to actual results differing materially from such
forward-looking statements have been discussed in greater detail in the
company's definitive proxy statement and supplement filed with the SEC and
incorporated by reference into the Form S-3.

Contact:

John Selvaraj
India Globalization Capital, Inc.
+1-301-983-0998
Email Contact
http://www.indiaglobalcap.com

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