‘GOOD ECONOMICS IS AT THE CENTRE OF GOOD POLITICS’
Invest India MD & CEO Deepak Bagla on competitive federalism, start-ups and more
INVEST INDIA, THE country’s investment promotion agency, acts as a catalyst for foreign direct investment (FDI) into India. Its recent successes have led to the World Bank creating a case study on it, says Deepak Bagla, MD & CEO of Invest India. The agency also has additional responsibility of Startup India and the Prime Minister’s science and technology initiative. Bagla, who has had stints with the World Bank and Citibank and is the current President of the World Association of Investment Promotion Agencies (WAIPA), speaks on a range of issues in an interaction with BT. Edited excerpts:
What are the significant highlights of Invest India in the past few years?
The most interesting thing, and it’s ironic, is that starting up a business in India was complex for foreign investors, and yet India did not have an investment promotion agency (IPA). Every other country in the world had one, especially if you look at the top 20 FDI destinations. There are two aspects to it. One is that it provides facilitation to the investor to handle everything. More importantly, it is a message to foreign investors that the government welcomes them. And that is what you were looking at when the honourable Prime Minister said: “I want to turn the red tape into a red carpet.” This is the red carpet.
We have states vying with each other for FDI. Competitive federalism is very valid now…
In a recent election in a state in northern India about two or three years ago, there was a full-page ad that said ‘we are No. 1 in ease of doing business in northern India’. The day that happens, you realise that good economics is at the centre of good politics. That is a big change, which has been brought about by the current
leadership. And this is what Invest India personifies. We are working with state governments, showing them global best practices, then rating Indian global best practices vis-à-vis theirs, and then training them to come up the curve on those. We have also started partnering the states that are doing better with the ones that are weaker.
The other interesting element is how state governments are upgrading their industrial parks to make India a plug-and-play model. This is very important, especially for the movement of MSMEs. If I have a big mobile maker coming in, you want the entire supply chain. The supply chain is MSMEs. The first thing they want is complete facilitation, hand-holding, which is what Invest India does—from location search to showing them the opportunity to getting all approvals. The second, which is more important for them, is that they need an ecosystem within which they can work and do a plug-and-play model. That is what we are seeing developing very fast in India.
What kind of work is Invest India doing in the start-up space?
The first challenge was to create the ecosystem. Second, how do we respect failure? That was a social challenge. We work with each state government on its specific start-up policy, creating the ecosystem, creating the incentives, taking best-case examples from one and sharing with the other. The next step is to see how we can bring all the start-ups together and help them by joining the dots. So, we created the Startup India Hub, which is like a virtual incubator. In that virtual incubator, you get everything from learning how to ideate, to creating a presentation, to meeting a VC, to finding a mentor, to getting an incubator, and to getting a market. Hand-holding happens [through the] entire chain.
We also have the Prime Minister’s science and technology initiative. There are two elements to it—one is waste to wealth. We are bringing in new technologies on waste to wealth. For example, we are trying to see how the Ghazipur dump (in Delhi) can be converted into a road.
The other element is that we are bringing in the best innovations from outside the government into the government, be it agriculture, defence, etc.
How are you engaging with the domestic, large industrial houses or even the large to medium industrial houses, which also need some hand-holding?
Of the `2.4 lakh crore investment that we have already brought in, close to about `18,000-20,000 crore is domestic investment. We have created a project management group for big companies. This used to be earlier under the Cabinet Secretariat. Even the large private projects can come in. And these are being monitored at the highest level. So, in their daily meetings with either the chief secretary or the chief minister’s office of that state, or senior government officials from India, [they are asked] where is it stuck? What more can we do? We go state by state. And we have already sorted out a large number of these issues. But the big change is [that] we have made it far more vibrant.
Does WAIPA help in getting FDI?
The World Bank advises all governments on investment promotion. And they were with us from Day One. They actually created a case study on Invest India last October, which they have shared with governments across the globe to tell them how they can structure an IPA, and how a country’s leadership can create an institution of global excellence in a short period of time. So, how WAIPA helps us is it creates awareness across the world, that [India] is the place which is now really open to investment. The other very interesting thing for me is, when we are looking at India, two-thirds of my GDP is driven by domestic demand. So, you come, you create here, you create economies of scale. And then you export. For me, it is important to open other markets for these companies, so they can export from here. That’s where WAIPA comes in.