It took Danish wind power major Vestas just 14 months and three days from the day its board approved setting up a new plant in India to come out with the first blade made at this facility. For Vestas— which manufactures blades at facilities across several continents—this was the shortest time it took to go from board approval to the final product. And handholding them through the entire journey in India was Invest India, the national investment promotion and facilitation agency.
Government bodies aren’t generally known to be lean, young, and dynamic. But, at Invest India, the average age of employees is 30 and it is acknowledged as a great place to work.
“Invest India is actually a startup of the Government of India. Effectively, we went live in 2016, so we are just about five-odd years old,” says Deepak Bagla, managing director and chief executive officer, Invest India.
Just like a startup, the agency takes quick decisions. For example, in the early days of the lockdown, Invest India set up a business immunity platform—within 22 hours—to “handhold businesses on a 24x7 basis”. The agency addressed queries with a resolution rate of over 90%. Right through the lockdown, it helped companies pivot their business models to make PPEs and ventilators. This led to it being declared the winner of the 2020 United Nations Investment Promotion Award by the United Nations Conference on Trade and Development (UNCTAD), out of 180 global investment promotion agencies.
Invest India is probably the only platform in the country where the stateand central governments together are equity holders. The entity—which Bagla says is the execution arm of Startup India—comes under the aegis of the Union Ministry of Commerce and Industry. Connected to this is another interesting feature, which Bagla calls “cooperative competitive federalism”. “When we were setting up the policies for the startups for each of the states, we had some of the states which were ahead partner with some of them which were not,” he says, adding that the states which were ahead went out of their way to help their partner states to come up the curve.
Attracting and enabling foreign direct investment (FDI) and investors from overseas is Invest India’s primary focus area. To attract FDI, says Akshay Mathur, director of Observer Research Foundation, Mumbai and head of the think tank’s geoeconomics studies programme, the government’s policies need to support Indian multinationals, and should be directed at making good international companies. “Ultimately, companies play a very big role in attracting FDI. And so the bigger the company, the more strong they are, they’re able to attract [FDI],” he says.
In fact, India’s recent FDI story has been good. The country attracted a record $73.5 billion in foreign direct investment in 2019- 20, according to provisional data from the ministry of commerce and industry.
However, according to Mathur, there does exist ground for further improvement. For example, he feels that a lot of the FDI is going into services, so the flow needs to be balanced. “And even in services, it goes to a very, very narrow set of sectors, such as IT,” he says.
But Bagla disagrees. He says that FDI is coming in across sectors and, like Vestas, Invest India is also facilitating other companies. According to him, as of mid-February, the agency was facilitating 691 companies with a total indicated investment of $163 billion, of which $31 billion had already come in. And in the past 60 months or so, the agency had handled about 260,000 business requests, across 109 countries, and across 47 sectors.
Despite that, Mathur says the country needs to have a larger pool of investable projects to absorb all the capital that is coming, as he feels India is sometimes unable to utilise all the capital available. And that “can only happen when our small enterprises become medium enterprises and medium enterprises become large enterprises.”
“Our medium enterprises have to scale, and we have to find ways that they can leverage and grow, so that once they grow only then will we be able to shape global supply chains [and] attract FDI,” adds Mathur.
Bagla concurs that MSMEs are indeed key to India’s growth story. And during the pandemic, “they have shown their resilience, their strength, their ability to pivot their business models, and strengthen frugal innovation—all elements which are now required for success in the new world”.
To make it easy for investors to invest in the country, Invest India will soon launch a single window, which will cut down the time needed in getting government approvals. Digitally powered, the investor would be able to put in a request for approval, and know its status—all on one portal.
One thing is clear: Functioning exactly like a startup, Invest India doesn’t get stuck at problems, but actively looks for solutions, in a timebound manner. This fact distinguishes it from all its other peers.
(This story originally appeared in Fortune India's May 2021 issue).