'Our approach now is Invest India 2.0': How CEO Nivruti Rai is leading the charge in boosting trade, tech, and investments

Nivruti Rai, MD & CEO of Invest India, knows how India Inc. works and what investors want. Rai, 56, worked for 29 years at Intel, of which she spent seven years as Intel India Country Head. It has been a year for Rai at the helm at Invest India and she has used that time to understand how investors view India, and she has taken measures to address their concerns.

In an interview with Business Today’s Surabhi, she speaks about the PLI scheme and why it’s important to boost manufacturing, India’s semiconductor manufacturing plans, and the future of AI. Edited excerpts:

Q: It has been a year since you took over. How has the journey been? What are your priorities?

A: I call the journey that we are on Invest India 2.0. My assumption is that Invest India 1.0 was very successful in terms of marketing India. Our approach now is Invest India 2.0. I was told to run Invest India like I ran my previous company. We have a vision for the next few years, and we have six focus sectors, which we call PM 6 or Priority Mandate Six. Each of these six sectors has many sub-sectors. These six sectors are: electronics and semiconductors, automotive and EVs, renewable energy (with a focus on solar and green hydrogen), agro and food processing, textiles, and pharma and healthcare, where we are focussing on biologics and biosimilars. And infrastructure—physical and digital—remains a focus, as it binds all of us. Once I knew my focus areas, I started building value chains in terms of components and countries from where we can source them. We also looked at companies that can manufacture them, and our target markets. We built a road map for every sector and sub-sector based on this. I have a road map for companies that I want to chase, I have a policy modification road map that I want to enable. We are also doing analytics in such a way that it is logic-driven with macroeconomics, geopolitics, treaties, partnerships, JVs, manufacturing and R&D. I have brought this holistic view.

While the tailwinds for India are very strong, some companies are still on the fence. They want to know about the ease of doing business. And then some investors have also asked about our S&P rating (BBB-), which is much lower than that of, say, Malaysia (A-). This is a problem I have to address. While S&P ratings are not meant for investment by companies, investors also use them as a parameter for investment. My team and I are working on what we call a landing platform where the whole country will be mapped for the six focus sectors that we have identified for now. We will then look at clusters and get a rating done of all these clusters. When I do the clusterisation, I will work with rating agencies. By the way, we have started to show the cluster and a cluster-wise rating.

To say India is behind in hi-tech is a fallacy. We are just trying to portray the right picture. I believe that we at Invest India are best positioned to partner with nations for sovereign money, with investors for VC/PE, for institutional investors for long-term funds. I have modified my own statement that I built for Intel, for Invest India. At Intel, I would say, ‘I want to maximise Intel with maximum India,’ but I would take the second part equally that ‘I want to maximise India with maximum Intel’. Now at Invest India, I say, ‘I want to maximise India with a maximum world,’ but I also want to maximise the world with maximum India. We have the capability. We have R&D capability, we have scale, we have a national-level platform on the might of software. We have 60 million-plus MSMEs. How do we get them a global audience in a global market? My new charter is, of course, to bring investments, whether through FDI or through trade. This is Invest India. Earlier, we did not have the mandate for trade and technology, but this is needed now. Investment, trade and technology are kind of hand in glove.

Q: On the ground, private investments haven’t really taken off and the PLI scheme has had mixed success. What kind of measures need to be taken further?

A: I have a very strong background in statistics, and I do not believe that looking at one year’s or two years’ FDI data is the story to tell. We analysed the last 21 years, and we saw that in the last seven years, the average FDI was $71 billion. In the seven-year period before that, it was $41 billion, and in the seven-year period prior to that, it was $18 billion. Now we see the trend. Our goal for the coming seven years is to get $110 billion FDI on average every year. I am highlighting to investors that the Indian economy has huge growth potential. I am telling companies and countries—in the terminology of young India—to partner with us or else they will have the Fear of Missing Out or FOMO.

Q: What are the expectations from the private sector in terms of further reforms?

A: We have travelled to many places, and I have asked investors why they are on the fence. The No. 1 concern was not just policy consistency, but policy transparency. They said that if we change policies, we should explain the process and keep them in the loop. The second concern was about policy consistency and not to change policies quickly based on whims and fancies. The third was in terms of ease of doing business—people want more freedom of repatriation. They also want the benefit of partnerships and free trade agreements in terms of exports and imports. Easier listing of companies is another reform they want. All of these are not very hard to change. People also want to understand [the process] a little bit better. Our team is working with a start-up on an I-Chat tool. It is not ready to be rolled out. It will have all the policies and regulations of all the states and Union Territories with an AI solution. It will enable investors to quickly look at policies and benefits and compare them across states. For instance, if they want to invest in car tyre manufacturing, it will provide a table of good incentives and a supplier ecosystem, as well as information on states that already have car tyre manufacturers and the state policies that can help and give benefits. We are also doing supply chain clustering with HSN code (a global method to classify goods) that can be fed into this. For now, the tool will only be for policy comparison. But my goal will be that the landing platform will have suppliers plotted across the country and then investors can see where they can go and get what suppliers. All of this will ensure that people don’t feel that investment in India is a black box. Nobody has said it. But they want to know the policies and I want to make it easy and transparent [for investors]. We will also help them track the return on their investment and not just leave once the investment is done. For this, we have built a programme called Aftercare. That is how we are handholding investors. We are rebuilding our website, and these facilities will be available on that.

Q: What are your thoughts on the PLI scheme and how is it doing?

A: The PLI scheme is in 14 sectors, and we have a total outlay of Rs 1.97 lakh crore. In that, we have 760 applications, who have already invested around Rs 1.26 lakh crore. As of January 2024, a total of Rs 4,415 crore has already been disbursed in eight sectors. The interesting thing is that these eight sectors include [some of our PM 6] sectors—electronics, food, pharma, IT. So, 53% of the outlay or `1,04,220 crore is in these eight sectors. In all, 55% of them are towards these four sectors of electronics, automobiles and auto components, solar PV modules and advanced chemistry cell (ACC).

You ask if these PLI schemes are working? The answer is, yes, absolutely. These are, I would say, accelerators. Our country needs to do a lot still in terms of manufacturing, compared to China. But there’s a huge difference from where we were 10-15 years ago. To continue on this path of growing our manufacturing, we need partners. For those partners to not have any cost disadvantage, I have to, as a nation, provide this crutch (of PLI) and this crutch is meant to support the investors till we as a nation address the cost of sales. The US has a CHIPS Act (that provides incentives for chip manufacturing in the US) as over the last 15-20 years, manufacturing of semiconductors moved outside the US and Europe. The bulk of manufacturing landed up in countries like Taiwan and South Korea. The PLI scheme in India is working; we can see it in semiconductors. We are planning an investors’ summit, and we will invite those companies and countries that will together build a strategy for India and not just India, but India for the world.

Q: Do you think India’s aspiration to turn into a semiconductor hub is finally taking shape because we’ve seen a couple of investments coming in?

A: I would say the journey has begun. Every journey has a crawl, walk, [and] run. Right now, we are crawling, but I assure you in five years, we will be walking and running. Why five years? Because for any fab to manufacture 20,000-40,000 wafers a month, it will take five years. And we’ll start with our own demand. Semiconductor demand in India today is about $40 billion and by 2030 it is estimated to cross $100 billion, which is 10% of the global demand. That will be our walking part of the journey getting into running. We will not take as much time to grow as TSMC or Samsung took, because we will learn from them. They were the first few pure-play foundries… There is no shame in partnering—JV is a very good strategy.

Q: What are your thoughts on AI given that there are concerns around job losses in India?

A: I am of the belief that technology has huge advantages. But we have to leverage technology for its disadvantages. When fossil fuel took centre stage, we saw that the environment was getting polluted, and then we worked on green energy. When we saw the byproduct from crude oil, we started the manufacture of nylon fibre. We have always seen a circular economy. If you look at the advantages of AI, then the price to pay to address its disadvantages is peanuts.

[Then], little surgeries that can be done through robotics can save lives of people in villages. If we build a framework to address the negatives of AI, we can enjoy the benefits—and the benefits are far bigger. For example, we all have natural intelligence. We have set up a system of police, judiciary, and laws—and those who don’t follow this are punished. The same structure has to be done for AI. And it is happening; countries and companies have to participate and collaborate. I feel India plays a huge role here—with its huge population and democratic goals. If there is a consortium planned for regulating AI, India can play a big role. It can be like the WHO, like a World AI Organisation. We are preparing a proposal. We will take it to the G20 and to other countries that are partnering and participating with us.

Q: There’s been a start-up funding winter. Do you think it’s coming to an end?

A: [Bringing it] to an end is our responsibility. There is $20 billion of dry powder available. But we need... deep tech start-ups where investors will invest. Our GDP is close to $4 trillion now. China and the US together have a GDP of about $40 trillion. I want to target that market. All this SaaS-based, retail-based [start-ups] are good, but I need deep tech [start-ups]. We are now seeing start-ups in deep tech, product, semiconductor IP and EV... The government is also working on enabling seed funds for start-ups. We have a Startup India Seed Fund, a fund of funds, a Startup India Investor Connect and a Credit Guarantee Scheme for Startups. We are also working with incubators. We have also analysed patent data globally and there is an increase in patent filing by India. We are looking at companies and countries with which JVs can be formed. Our recent success has been in bringing together Argonne National Laboratory of the US and Smart Living Lab at IIIT Hyderabad for joint research on climate modelling in our cities and developing associated sensor capabilities. We will do much more because we have to enable the dry powder to be leveraged for driving growth of not just India, [but] for the world.

@surabhi_prasad