It's not a target but it remains an aspiration. Given the trajectory of the Indian economy, there's every reason to be optimistic that this ambitious goal is within reach. It is not an official target and no one in the government will speak about it on record. But in private, off-the-record conversations, they will admit that receiving $100 billion in annual foreign direct investment (FDI) inflows is an aspiration the Indian government is not giving up on. That figure isn't quite a mare's nest. China consistently crossed that mark during the heady period when it was growing at 9-10 per cent per annum. And, to put things in perspective, India isn't too far away from that mark. Achievable 'target'. In 2016-17, India received FDI of a little more than $60 billion in retained earnings, though the growth rate fell to 9 per cent from the average of more than about 25 per cent over the preceding three years. It is still a very impressive performance, especially when seen in the context of the 13 per cent fall in global FDI flows last year. A simple back of the envelope calculation shows that India will hit the $100-billion FDI inflow mark within three years if it can maintain the growth rate of the previous three years. How In the last two-and-a-half years, FDI inflows into India have cumulatively grown 62 per cent. A similar strike rate over the next two-and-a-half to three years will take the figure comfortably over the $100-billion mark. But FDI inflows do not always follow the laws of mathematical progression. Hence, India has been actively chasing foreign investors to come and invest in the country. The need for investment facilitation “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,” Deepak Bagla, CEO of India Invest, India's new but surprisingly low profile investment promotion agency (IPA), had told 'IIJ' a few months ago. 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 programme, 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 Invest India. Diversification of FDI basket As the numbers above show, FDi inflows have grown by leaps and bounds since Invest India was set up. But that tells only part of the story. The content and quality of FDI have also changed significantly over the last couple of years. For example, if one compares the FDI basket during the 2000-2014 period with FDI inflows in 2015 and 2016, the difference in the composition of industries will be clear. Hotels, hospitals & tourism, electrical equipment, all large job creators, did not feature anywhere in the list prior to 2014 but have, since, emerged as important components of FDI. This indicates that more foreign investors from more diverse industries are buying into the India story and are investing their money in this country. Manufacturing in focus Another interesting diversification, a welcome change from the past, is that the manufacturing sector is attracting increasingly higher amounts of FDI. This is important as the government has set a target of increasing the share of industry in the country's GDP from 18 per cent at present to 25 per cent - sine qua non for providing jobs to the army of 10-12 million youth who join the workforce every year. In 2015-16, for instance, FDI inflows in the manufacturing sector amounted to $20 billion, third of the total and almost half if retained earnings, non-equity capital and some other heads are nit. South Korea's Kia Motors recently announced a $1-billion project to build cars in Andhra Pradesh in peninsular India. Apple's outsourced manufacturing partners have already begun assembling the iconic US companies phones (though not the iPhone) in India. And China's Dalian Wanda Group is setting up a $10-billion residential-commercial-industrial city in the northern state of Haryana. In the retail sector, which is another large job creator, Amazon is spending billions on upgrading its back and front ends in India and Ikea is also betting big on India. They joins other global giants such as Airbus, ThyssenKrupp Electrical Steel and Fiat Chrysler that have belatedly woken up to India's potential and are now rushing to make up for lost time. Chasing growth India has been the world's fastest growing economy for three years and the top recipient of FDI for four - with good reason. And that is why investment dollars are flowing in. "The Indian government has taken some bold decisions such as passing the GST Bill and making a massive push towards a digital economy, which will accelerate India's transformation in the mid-to-long term. Besides paving the way for greater transparency in policy frameworks, such initiatives have the potential to improve India's ranking on the (World Banks's) Ease of Doing Business index,” said Dr Mukesh Aghi, President, United States India Business Council (USIBC). The World Bank, the International Monetary Fund and the ADB are unanimous that India is and will remain the brightest spot in the global economy for years to come. The IMF, in its World Economic Outlook 2016 had projected that India would become the world's third largest economy by 2030 with a GDP of about $10 trillion in nominal terms. Most industrialists and investors agree with this sentiment. "India stands at the cusp of one of the greatest phases of growth in its history. It is a beacon of hope for the rest of the world given the sheer growth potential that still lies ahead of it, the democratic system that gives it stability, the internal market demand that will allow India to grow healthily for decades and the sheer grit of its citizens to back democratically elected governments to do the right thing. If you take a long-term view there is no way you can go wrong with investing in India," said billionaire Gautam Adani, Chairman of the Adani Group. Why FDI is important India needs FDI as much as the foreign investors need India's low cost manufacturing bases to make their products and the country's vast domestic market to sell their goods in. A major roadblock to faster growth rates - a necessary pre-condition for generating jobs, spreading prosperity and lifting millions out of poverty - is India's creaking and outdated infrastructure. Finance Minister Arun Jaitley has said India needs approximately $646 billion over the next five years to fix the country's infrastructure. That's about $129 billion every year for five years. Jaitley has taken the lead by allocating $90 billion on infrastructure creation and renewal in this year's Budget. With private sector investments remaining tepid and banks unable to lend because of the NPA overhang, FDI remains the only route to make up the deficit. Doing the heavy lifting Invest India handles about 40 per cent of all FDI that flows into India. It is a matrix organisation, comprising mostly young professionals recruited from top consulting firms, investment banking companies and law firms, all of whom gave up lucrative jobs in response to the Prime Minister's call to help build a new India. Its track record so far has been impressive. That's because of the systems that CEO Bagla and his colleagues both in the government and in Invest India have put in place. For example, it has a process in place for attracting FDI. It compiles extensive lists of companies worldwide and regularly updates news reports of their interest in investing in foreign countries. These companies are then targeted with the help and support of the Indian embassy in their native countries. Then, Invest India also receives enquiries on its portal. In other cases, leads are generated and forwarded by the central and state governments or from formal and informal connections at global expos and events. “Our goal is to make ourselves redundant,” said Shankar Ranganathan, Vice President, Invest India, adding that he had never before worked for an organisation with such a goal. He explained that the idea was to streamline and ease foreign investment processes to such an extent that the country will no longer need an IPA to facilitate such inflows. Small beginning Such thoughts were nowhere on the minds of the government when Invest India began its journey. To start with, it studied the investment promotion model of Gujarat, which had been very successful in attracting investments under Narendra Modi, who was chief minister of the state before he moved to Delhi as Prime Minister in May 2014. The plan for the IPA was radical in the tradition-bound world of the Indian bureaucracy. It was planned as 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 has said on more than one occasion. “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. Best in the world That goal was achieved last 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. “Invest India is a wonderful concept. New and existing investors are finding it a very useful,” said Haier India's Somesh Aggarwal. Easier FDI rules The drive to attract higher FDI inflows, obviously, has to start at the top. Here, the Modi government has been proactive and prompt in reforming bureaucratic procedures, removing red tape and easing norms for foreign investors. In 2015, it eased FDI rules governing investments in 15 key sectors such as defence, real estate, aviation, banking and single brand retail. And most importantly, it abolished the Foreign Investment Promotion Board, which had, till it was scrapped, the official gatekeeper for foreign investments. In the defence sector, in which the government had earlier allowed up to 49 per cent foreign investment, the rules were eased further to allow this investment through the automatic route. And investments up to 100 per cent were also allowed in cases dealing with modern technology. Commenting on the measures taken to ease foreign investment norms, Ramesh Abhishek, Secretary, Department of Industrial Policy and Promotion, had told India Investment Journal in an earlier interview: “... We are actively engaging with foreign investors, reaching out to them and convincing and persuading them to invest in India. We are offering fast track solutions by devising a dynamic and proactive mechanism aimed at problem mitigation and solution.” The road to $100 billion How realistic and feasible is the aspiration of attracting $100 billion in FDI annually Several experts that 'India Investment Journal' spoke to were confident that the country will hit that mark within three to four years. Their logic: The implementation of GST, the new Bankruptcy Code, the digitisation wave sweeping across India and the slew of fresh reforms that are in the works will push India's growth trajectory to 8 per cent and beyond very soon (subject, of course, to a normal monsoon this year). Digitisation, in particular, will have a multiplier effect whose impact will be immense. “The government's Digital India initiative, complemented with collaborative private participation, will catalyse India's transition into a digitally empowered society and a knowledge economy. A digitized India will impact industries, enterprises and individuals, making way for futuristic technologies that will lead to never-before-seen transformation at professional and personal levels. There's no better time than now to do business in India!,” said Amit Midha, President, Asia Pacific & Japan, Dell Computers. Niti Aayog has committed to removing more than 1,000 archaic laws that have traditionally impeded India's growth, Dr Aghi of the USIBC said. Rejuvenating the Indian economy, taking it to higher growth trajectories and attracting higher levels of FDI remain a work in progress. The path, so far, has not been linear. There have been hurdles that have slowed down progress and without a doubt there will be roadblocks that will emerge on the road ahead. The government, and its agencies such as Invest India, will have to find ways of overcoming them. Only then, will the goal of $100-bn FDI flowing in annually be achieved. Can they do it There is every reason to be optimistic.