The impact of Invest India
Set up in 2009, Invest India, the non-profit entity under the Ministry of Commerce and Industry, has emerged as the one-stop shop for investing in India
With the country ushering in an era best-suited for foreign investments, numerous multi national corporations are pleasantly surprised with the ‘New India Experience’. The investment drive has been fuelled by multiple government schemes focussing on the ease of doing business in India and the young team of individuals who are passionate about leading the transformation to a new and better India.
In addition to the widespread support from governing authorities, several organisations that boost and facilitate investments have recently been formed. Among the most prominent of these is Invest India, set up in 2009, it is a non-profit entity under the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry. Invest India is at the front of the campaign to educate potential investors from around the globe about opportunities in the country. It also comprises of a core team to focus on sustainable investments. Invest India also partners with substantial investment promotion agencies and multilateral organisations.
One such example of investment facilitation for companies in India is Hyundai Motor. Established in 1996, Hyundai Motor India is the second-largest car manufacturer in India, exporting to over 88 countries. Aided by Invest India, the company has signed an MoU with the government of Tamil Nadu to invest INR 70 billion to augment its existing facility for manufacturing Electronic vehicles. The company was also able to fast-track its land acquisition agreement with the government of Haryana by over 60 days due to Invest India’s active efforts in several Indian states to build production capacity as well as bring in global practices, best suited for investment targeting, promotion and facilitation.
Top executives of Invest India also travel extensively to various foreign countries extensively, interacting with government officials and business leaders in different countries. They are quick to react to developments taking place in India and abroad and formulate policies while interacting with global investment giants.
A typical example of the swiftness and efficiency of Invest India can be seen in its interactions with Saudi Arabian officials in Riyadh and Jeddah in April 2019. Just two months after the high-profile visit of Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud to India, senior officials from the organisation visited the Kingdom of Saudi Arabia to interact with the high-ranking executives there. Business seminars were held in the two cities, which were organised by Invest India and the Saudi Arabian General Investment Authority (SAGIA). The visiting dignitaries from India explored the synergies and avenues of partnership between industries from the two countries. They also discussed the vast opportunities that India offered to the investors in the KSA.
Besides Saudi Arabia, there were visits to Singapore, Thailand and Malaysia, where Invest India officials explored the synergies and avenues of partnership between India and the respective nations. Besides seminars on opportunities in India, they also had detailed one-on-one meetings with top bureaucrats in those countries. Deep dives were also held into focus sectors covering a wide spectrum including infrastructure, logistics, construction, Smart Cities, consumer, manufacturing and financial services along with automotive, healthcare, tourism, renewable energy and food processing. As an investment specialist of Invest India pointed out recently, “An entity that is working towards innovation, development or improvement of products or processes or services has to not only operate within existing frameworks such as the Income Tax Act and the Companies Act but also charter hitherto unregulated spaces such as drones, e-pharma, e-commerce etc.”
“India is also in midst of a tech start-up boom. The biggest reason why the country holds perpetual interest with regard to global firms is not solely because of the size of the market, but the opportunity to participate in one of the richest tech startup innovation ecosystems in the world”, says the Harvard Business Review. India’s startup ecosystem, now the world’s third largest, is maturing rapidly and is no longer dominated by copycat e-commerce companies. In fact, tech start-ups have attracted over USD 20 billion in the past three years. The wide-ranging discussions focused on the possible opportunities of joint cooperation and collaboration across sectors like energy, food processing, pharmaceuticals, infrastructure, mining, ICT and tourism.
India has seen a considerable chunk of its budget allocated to infrastructure growth. The country has been increasing its expenditure on infrastructure development such as airports, cities, hotels, ports, roads, bridges, hospitals, and power plants. During the past three years, for instance, the state of Andhra Pradesh has made massive investments in building out its infrastructure. The Indian government has planned more than $1.5 trillion investments in the infrastructure sector over the next two decades. India has expanded its solar generating capacity eightfold since 2014 and achieved the target of 20GW of capacity four years ahead of schedule. India plans to catalyze $200–$300 billion of new investment in renewable energy infrastructure over the next decade.
Interestingly, startups by their very nature are meant to disrupt; consequently, one of the key challenges faced by them is navigating regulations and policies. “It is the responsibility of the Government to have an understanding of the Startup ecosystem and ensure that the regulations are dynamic in nature. The Regulatory and Policy Proposal outreach to Startup ecosystem is a step in this direction.” Startup India has invited suggestions from all members of the Startup ecosystem, aspiring entrepreneurs, incubators, investors and mentors to submit regulatory and policy recommendations to improve the business environment. The Department for Promotion of Industry and Internal Trade (DPIIT) has been holding meetings with the Income Tax department and other regulators to ease regulations for Startups
The rising affluence in India’s middle economic region widely known as the middle class has led to a very rewarding field for some of the biggest global players. However, It’s true that India’s business environment poses challenges for all companies in the consumer economy. Nevertheless, some global consumer companies, such as Unilever, Xiaomi, Suzuki, Hyundai, Honda, LG, Samsung, and Colgate, have been able to overcome challenges and constraints to do spectacularly well in the middle of the economic pyramid. Clearly, the rapid increase in India’s economic growth has been attributed by both national and international experts to the sweeping changes that have been initiated both by the central and state governments across the country.
The most significant changes in recent times include the introduction of a unified indirect tax law system, introduction of insolvency and bankruptcy code to turn around stressed assets and improve the flow of money in the economy (primarily through banking and financial institutions), stabilisation of government’s outlook towards imposing taxes on foreign investors, and liberalisation of the framework for foreign investment.
Top minds at the Invest India have worked tirelessly in this regard and the efforts have been recognised by some of the most respectable associations across the world. It was conferred with the UNCTAD (United Nations Conference on Trade and Development Investment Promotion) Award 2018 for promoting investment in sustainable development, the UNCTAD Award 2016 for excellence in partnering for investment promotion and the Investment Award 2016 from the Indian Ocean Rim Association. With reforms continuing to be the focus of the Indian government, the various innovative initiatives of Invest India are likely to pay handsome dividends over the coming years.