Call them the 3Cs of corporate India's investment plans if you will -- China, commodity, and capacity.

Chinese demand for steel, and a sharp surge in commodity prices -- since just July 2003, global prices of steel scrap have risen 20 per cent -- is fuelling a billion dollar investment cycle across the country's steel manufacturers.

And a combination of robust domestic demand and the need to cater to the export market is seeing a host of auto majors drawing up plans to invest another $500-700 million in the four-wheeler passenger segment alone.

While cement demand is also picking up at a robust pace thanks to the rapid increase in housing stock as well as the PM's roadways programme, the industry is riddled with excess capacity, and so not too much investment is expected here, except for upgrading quality.

With work for the 2008 Beijing Olympics picking up steam, China is devouring steel like there's no tomorrow.

While there is a quota of 1.2 million tonnes for exports from India at the moment, Chinese demand today accounts for 29 per cent of Tata Steel's exports, 35-40 per cent of SAIL's and 35 per cent of Essar Steel's exports.

Not surprisingly, in the year's first quarter, India's steel exports rose 40 per cent in comparison with last year -- SAIL had, for instance, projected a million tonnes of exports for the full year, and did a third of this in the first quarter alone, traditionally a lean period.

With domestic demand also expected to do well (the steel ministry's looking at a 7 per cent demand hike), the country is expected to run out of capacity by 2005-06.

So, Tisco is planning a million tonne expansion, which will take its production up to 5 million tonnes by March 2006, at a cost of Rs 2,000 crore (another Rs 250 crore may be invested in a ferro chrome project in South Africa).

In Delhi, Rajan Jindal of Jindal Stainless Limited is planning a greenfield integrated stainless steel project of 1.2 million tonne capacity in Orissa (that'll make him one of the top stainless steel producers in the world), and work has already begun on the Rs 600 crore (Rs 6 billion) phase one of the project. The total project will cost Rs 1,200 crore (Rs 12 billion).

Stemcor of the UK is planning a Rs 250 crore (Rs 2.5 billion) cold rolling mill, and Maharashtra Seamless of the DP Jindal group, is examining the possibility of backward integration, to have its own facilities for billets at a cost of Rs 1,000 crore (Rs 10 billion).

In the auto sector, similarly, large external demand is also fuelling an investment drive. While auto majors in the passenger car segment have managed to satisfy demand with just marginal investments over the last couple of years, the capacity constraint is now beginning to bite.

Hyundai plans to invest $200 million to increase capacity from 150,000 cars by the end of the year to 250,000 by the end of next year, primarily due to the fact that exports of the Santro Xing are expected to go up to 70,000 units next year, from 9,000 last year.

Toyota Motors, similarly, is finalising plans for capacity expansion of another 75,000 units (Rs 200-300 crore), and another Rs 400 crore (Rs 4 billion) for an export oriented transmission plant.

Honda is exploring a Rs 1,000 crore (R 10 billion) investment in passenger cars according to Honda Siel managing director H Yamada, but the plans are still fluid.

Ford India's vice-president Vinay Piparsania points out that while the mid-sized segment is going to grow very fast, the company's product lines are flexible and no huge investments will be required to expand them.

General Motors has a Rs 600 crore (Rs 6-billion) plan to expand capacity at Halol in Gujarat for new projects like the Panther MUV.

Though cement demand is growing by over 8 per cent a year, the industry still has too much capacity -- while demand this year is expected to be around 120 million tonnes, current capacity is over 145 million tonnes.