Nikesh Arora, chairman and chief executive officer (CEO) of Palo Alto Networks, thinks “it’s India’s moment”. John Chambers, former chairman and CEO of Cisco Systems, says India, the world’s fastest-growing major economy, offers global businesses “a trusted partnership” at a time when China is losing out. Shantanu Narayen, chairman and CEO of Adobe, asserts the country is a “very big part” of the software giant’s scheme of things.
As Indian policy-makers go all out to woo foreign businesses, some of the corporate honchos in the Silicon Valley have vouched for the country’s possible emergence as a major investment destination in the coming years.
At the end of a series of one-to-one and group meetings with commerce and industry minister Piyush Goyal here late on Monday, they backed the minister’s call to global businesses to “invest in India now”. They also did make a raft of suggestions on how to take the India story forward.
After his meeting with Goyal here, Arora said: “I think it’s India’s moment. We have a demographic opportunity, lots of young people, right population dynamics, phenomenal GDP growth. If you look at the global landscape, India offers stability and resources and capability, which will allow a lot of companies to succeed in the country.”
Chambers, who is also the chairman of the US India Strategic Partnership Forum (USISPF), said India is going to remain the world’s fastest-growing economy in the next decade and its GDP is “well within the reach of $5 trillion”. “And India offers a trusted partnership at a very important time, because China is losing that trust,” he said. “So, everything, from start-ups to investment in manufacturing to semi-conductors, this offers an opportunity for India to lead and I think India can and will lead,” Chambers added.
Adobe’s Narayen said his company is expanding in Bengaluru and Noida. “India continues to be a massive area of importance for us and we continue with expansion,” he added.
Elevated foreign investments partly made up for the near-absence of domestic private capex in recent years. The renewed pitch for foreign investments comes at a time when the US and the EU are facing recession, Covid-hit China is witnessing a sharp growth slowdown and the Ukraine war has altered the course of global supply chains. These factors will weigh on the flows of foreign direct investment globally and only those economies that have weathered the external storm better than most stand to gain. India, with a decent economic expansion, can capitalise on this adversity if it puts in place right policies.
The International Monetary Fund has forecast a 7.4% growth rate for India in FY22, way above its 3.3% projection for China.
India’s gross FDI inflows in FY22 hit a record $83.6 billion, but the year-on-year rise slowed down to just 2% from 10% in the previous year, partly due to an unfavourable base. However, FDI (equity) inflows into manufacturing surged 76% last fiscal to $21.3 billion.
There were suggestions as well. Narayen said the country has a lot of potential to further develop two “areas of importance”— the film industry and the animation industry. “The minister outlined some of the things that are happening in India like digital commerce. We touched on what has to happen to continue to engage people digitally so that you can automate inefficient, paper-based processes,” he said.
During a separate group meeting with some of the Indian and American corporate honchos at an event organised by the USISPF, Goyal asserted that the time to invest in India is now, given the immense opportunities it presents.
Goyal said there the production-linked incentive (PLI) schemes and the $10-billion semiconductor incentive programme have been well received by investors. “There was a lot of interest about knowing potential locations for the semiconductor industry to locate in India and some very interesting offers and ideas came to the table,” he said.
“The government is open to ideas. We are already exploring a few more sectors which could be brought under the scheme,” he added.
Speaking on some of the suggestions he received, Goyal said one of the points raised by a company looking to invest in India was direct selling rules in the Consumer Protection Act. “So, I have assured him I will look at that and we will try to resolve that very soon,” the minister said. Some of the investors made suggestions on how to “handhold and navigate investors through the journey in India”.