Green channel for investments

Green channel for investments
Green channel for investments

Invest India, the country′s new investment promotion agency is making life easier for both foreign and domestic investors by cutting through the red tape. Want to know how Read on Nikunj Parashar and his wife Shilpa were worried. They had quit lucrative jobs abroad, he as General Manager of Maersk Group and she at Credit Suisse, to return home to India to set up their own business. He had developed the technology for radio-controlled high speed target boats required for the Indian Navy and was confident that his boat could compete with the Israeli, US and French boats the navy currently used. What's more, his boats would cost only Rs 6 crore compared to Rs 25 crore per imported boat.

But developing a great product was one thing; getting the powers that be to look at it and consider it for acquisition was quite another. After repeated failures to get through to the authorities, he Parashar gloomily told his wife: “Perhaps we didn't do the right thing by returning home.” Purely by chance, a few days later, he heard Prime Minister Narendra Modi announce the launch of his ambitious flagship scheme, Make in India, to encourage Indian and foreign industry to manufacture hitherto imported items in this country for both the domestic as well as the international markets. The husband and wife duo wrote an email to the Make in India program without really expecting an answer. The very next morning, they received a reply: “How can we help you ” That email changed their lives. Not only did the Make in India program handhold them through the selection process of their technology but also helped them set up Sagar Defence Engineering Pvt Ltd in Mumbai to supply state of the art boats to the navy. Besides the defence sector, these boats also have applications in flood relief operations, river monitoring and cleaning and in oceanography. This is just one of dozens of examples of both foreign and domestic investors being surprised by the highly professional and very efficient services provided to enable them to bring their proposals to fruition.

“Till recently, all the arms of the government were involved in investment promotion. But no one was doing investment facilitation. That's where we came in,” said Deepak Bagla, CEO of India Invest, India's new but surprisingly low profile investment promotion agency (IPA). The Chinese boom, fuelled mainly by FDI, was engineered largely its investment promotion agency. Singapore's IPA, too, is famous for aggressively facilitating investments in the city state. But India had no established mechanism to hand hold foreign and domestic investors and guide them from conceptualisation to cash flow. In 2009, therefore, a Cabinet note mooted the idea of an IPA. The government created Indian Brand Equity Foundation as a trust to promote and create international awareness of the Made in India label and to disseminate knowledge of Indian products and services abroad. But this, too, fell short of an IPA. Then Narendra Modi stormed to power in 2014 and launched his ambitious Make in India program, leading to a flood of queries about opportunities in this country. That was when the DIPP and the Federation of Indian Chambers of Commerce and Industry got together to set up India Invest. To start with, India Invest studied the investment promotion model of Gujarat, which had been very successful in attracting investments under Modi. The plan for the IPA was radical by the standards of the tradition-bound world of Indian bureaucracy, It was to be an organisation completely funded by the government; yet it would have to stay at an arm's length from the government. Then, it had to be created and run in the manner of a private sector firm. And finally, it had to be designed to keep the private sector investor - both foreign and domestic - at the centre of its existence instead of the government. So, it had to be the independent voice of the investor within the system. The challenge was to get everyone to accept the idea. It wasn't always easy. But the Prime Minister's vision was crystal clear: “The country can progress only if we end red-tapism. No red tape, only red carpet, is my policy towards investors,” Modi had said on more than once occasion. CEO Deepak Bagla was drafted in from the private sector in March 2015. Between then and September, Bagla and a small team focused on creating an organisational template that was extremely nimble and flexible. “India was already famous the world over for frugal engineering. We wanted to adapt that same philosophy to India Invest. Our goal was clear: we wanted to be the world's No. 1 IPA at the least possible budget,” said Bagla. That goal was achieved this year in Nairobi, where Unctad rated it the No. 1 IPA in the world for its Best Practices. Bagla generously gives all the credit for Invest India's success to his young team. “These youngsters are full of passion. Why else would they have given up often eye-popping dollar salaries at bluest of blue chip global investment banks and consultancies to work in a government-run body at a fraction of what they were earning ” he asks. Being young and passionate, Bagla's team has developed expertise at taking care of investor grievances. Their domain knowledge and problem solving skills have also earned them the respect of both foreign investors as well as the babus with whom they interact on a daily basis. “Some bureaucrats are more open than others to the idea of us youngsters pestering them cut through the red tape, but everyone cooperates because they know the Prime Minister is backing this venture,” said a young India Invest executive. Initially, India Invest looked for recruits at other trade organisations and embassies but finally decided to give the mandate for recruitment to head hunting firm ABC Consultants. Early on, India Invest got a batch of interns from an Ivy League university. One of them decided to stay back. It was a leap of faith. India Invest was an unknown organisation, it had little money and some people doubted its longevity. But heeding the Prime Minister's call to help rebuild the nation, more and more qualified youth took the leap of faith. ABC Consultants reported that suddenly, people were willing to take pay cuts and give up blossoming careers to heed the Prime Minister's appeal. To be entirely honest, not everyone has jumped into the fray out of altruism. “India Invest gives young people exposure and the opportunity to build relationships and networks that only people at very senior levels get. Where else could a twenty-something be able to walk into the room of a secretary in the Government of India or have a state chief minister return his/her phone call ” said a partner at a large head hunting firm on condition of anonymity. Also, where else would people in their late twenties and early thirties get to interact with global CXOs and handle investment proposals worth thousands of crores These kids will carry these experiences and relationships with them when they move on. In their cases, three four years at India Invest will be the equivalent of 10-12 years at the firms from which they came,” he added. Bagla created a matrix organisation where everyone would handle one industry as his/her primary responsibility and another one as his/her secondary focus. Then, that person would also specialise in handling investors from one country and investments into one state. This helped create a flat organisation structure in which roles could be swapped, thus, creating a system where institutional knowledge would be retained by the organisation even if someone moved on. The enthusiasm of his young team is visible and infectious. Within minutes of stepping into Bagla's office, it becomes evident that these youngsters don't stand for protocol. They stream in and out of their CEO's cabin without even knocking to discuss some problem or breakthrough with him. It is this can-do spirit that enables this young team to cut through the red tape that has defeated even seasoned warriors. “I often have to tell these kids to wind down and chill. I remember once, when I was abroad, I had sent an email to a young colleague asking for some information and presto, it was there in my inbox within the hour. I realised it was 4 am in Delhi. When I returned I told him this wasn't on and that he would burn out if he didn't learn to temper this enthusiasm,” a half-bemused Bagla recalled. India Invest's efforts are also helping reduce corruption in the system. For one, its services are completely free. So, there is no reason for any investor to seek the assistance of any private sector facilitator or consultant or break any law when all his grievances can be addressed legally and at no cost. Then, being a government organisation, foreign investors can rest assured that any advice they receive will be above board and in keeping with the law of the land. The results are already showing. Foreign direct inflows touched an all-time high of $55.46 billion in 2015-16, up 23 per cent compared to $45.15 billion in the previous year, according to provisional figures put out by the Department for Industrial Policy & Promotion. Though it is still too early to credit this entirely to the efforts of India Invest, even its most trenchant critic - though there aren't too many - will accept that it has begun to make a difference. These are early days yet. As the economy improves and growth rates rise, India Invest and its young team will doubtless find their hands more full. And that can only be good for India.

Arnab Mitra is Consulting editor, India Inc. He writes on business and politics.

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