The invisible hand of India's investment promotion agency, Invest India

There is an interesting story of how Invest India persuaded Sweden-headquartered Autoliv, which makes safety airbags, to invest in the country. The company was mulling choosing between the Philippines, Vietnam, and Thailand to invest until the Swedish major came across Invest India team during a virtual roadshow amid the pandemic. The agency’s team, which got in touch with them after the roadshow, found out that the company had earlier shortlisted a location in the heart of Chennai, but couldn’t proceed because of high cost. "All we did was move the selected land parcel four and a half kilometres away to Cheyyar town and switched to a lease model. Now it is cheaper than anywhere else in the world, so investment has moved to India," says Deepak Bagla, MD & CEO of Invest India, which is India's investment promotion agency. 

This quasi-government organisation, nestled in Delhi's posh Lutyens, is fast emerging as the biggest driver for foreign investment. "We are good at joining the dots in a jigsaw puzzle," explains Bagla.
India received a record level of FDI, valued at  $83.57 billion in 2021-22, despite the COVID outbreak. As compared to a decade ago, India's current run rate of FDI has more than doubled. "In the last 7-8 years, Invest India alone has been instrumental in getting investments worth Rs 3 lakh crores ($33 billion) and is now working on grounding a total of Rs 16 lakh crores ($ 196 billion) worth of investment. We have helped create 4.5 lakh jobs, supported 81k plus start-ups, solved 3 lakh plus queries coming from 174 countries, and facilitated 1,323 investment projects," adds Priya Rawat, COO at Invest India. 
After partnering with the Premier family, the French multinational Groupe PSA, known for the Peugeot brand, exited India in early 2000. By the middle of the 2000s, the French major was in a dire financial state. They were looking for a globally competitive manufacturing destination. Invest India did some digging and found out that one of the board members was an Indian professional. They got in touch with him for a meeting with the board. The team flew down to Paris and made a strong pitch. The other competing destinations were Morocco, Iran, Turkey, Indonesia, and Thailand. The team explained to PSA Groupe the market opportunity, favourable regulations, choices of states for a plant, and likely incentives. The duo worked on this for 2-3 years, which culminated in PSA Groupe partnering with the CK Birla Group by taking over the ailing Hindustan Motors plant in South India. "That was one of our first big wins," recalls an Invest India professional.

The message to foreign investors is very clear: "You have one person to call and we will do the rest of the things. No longer do you have to run around and deal with 20 stakeholders anymore," says Pallavi Bishnoi, VP at Invest India. Some years ago, a high-ranking official from the government of Russia came to Invest India headquarters, and as he walked up the second floor, he remarked,"This is where I see Mr. Modi's new India." 

As part of the strategy, there is a focus on 'anchor' investors to attract FDI via a supply chain. Take for instance, if there is a big mobile manufacturer or furniture maker, who wants to enter, Invest India works with them to bring their entire supply chain. There was this apparel company from the eastern part of the world, which is known for establishing a base in a country where the annual per capita income exceeds $5,000. India's per capita income lags behind at about $2,000. "We worked with them to make a business case. They suddenly found that they had a greater number of people here than anywhere else," says Bagla. Invest India is now helping them in localisation from 18 per cent currently to a target of 70 per cent. The team's ears are also glued to the investor calls of global multinationals. "We pick up how many times the name of India was mentioned. Then we analyse the nature of the comments, whether positive or negative. This gives us good feedback to work on," says Bagla. Then there are certain marquee projects that Invest India wants. "We map out the entire decision-makers in prospective global companies interested in India, including the board members, past experience, India connection, if any," says Bagla. This is an entirely new, cut-throat approach to marketing India and reaching out to global multinationals.

The agency has also picked up lessons from neighbouring China, which excelled in attracting foreign capital. "Investment promotion is both about form and substance. But what matters most is how you manage and treat the investor," says Bagla.