Ignore the doom mongers, India will return to the high growth path by winter.

There’s an old truism about India which holds that for everything that is true about this country, the exact opposite is also correct. This is true for the Indian economy as well.

The country’s foreign exchange reserves recently crossed the $400-billion mark, making India the world’s sixth-largest holder of forex, ahead of the Euro zone, Brazil and Taiwan. The Indian rupee, which had fallen to a low of Rs 68.85 against the US dollar four years ago under the previous Congress-led UPA regime, has gained about 6 per cent to about Rs 64 and experts expect it to strengthen further.

Having attracted the most investments in 2016, Karnataka is already a favorite with investors but blessed with rich minerals and abundant skilled manpower, there is still a lot of untapped potential.

The year 2016 was a landmark one for Karnataka. As per the Department of Industrial Policy and Promotion (DIPP), during the year the proposed investments in the state saw a massive five-fold jump from Rs 31,668 crore ($4.8bn) in 2015 to Rs 1,54,173 crore ($23bn).

Harsimrat Kaur Badal, as the minister in charge of India’s Ministry of Food Process Industries, has been on a worldwide mission to attract investors to the country’s $915bn farm-to-fork ecosystem. During a recent visit to London, ‘India Investment Journal’ was given an insight into her plans for India’s first-ever World Food India summit this year.

What is the investment update since your last visit to the UK?

From our last meeting, all the big retail chains were hoping for some relaxation in the FDI [foreign direct investment] policy. The existing model in India is only for food and most of them do food plus other items. That is a decision the government will be taking very shortly and the serious interests will become apparent once that clarity is there.

Demographics, rising incomes and a low existing base all point towards a paradigm shift in the fortunes of India’s still fledgling food retail sector.

It can potentially become the largest recipient of foreign direct investment (FDI) and will definitely play a major role in realising the Prime Minister’s goal of doubling farm incomes by 2022. Food retail, the largest component of India’s more than $500-billion retail sector, is standing at the cusp of greatness. How its fortunes play out over the next five to 10 years could well decide the success of the government’s ambitious Make in India initiative as well as the direction of politics by influencing how the critical farm lobby votes in future elections.

Rana Kapoor, the CEO of Yes Bank, talks ‘India Investment Journal’ through his company’s recent tie-up with Santander UK, the impact of demonetisation and the gains in store for the banking sector with GST.

What is the thinking behind the tie-up with Santander UK?

The UK-India corridor is a high priority corridor for us. The fact is that India is the fastest growing economy in the world today and quite naturally the opportunities between India and the UK are getting catalysed. Especially, SMEs [small and medium enterprises] need cross-border partners and banks are the channel that can help open new markets for them. Santander and Yes Bank are looking at providing a collaborative platform to help SMEs penetrate new geographies.

India’s ambitious renewable energy targets will help the country pick up some of the slack created by Donald Trump pulling the US out of the Paris climate accord.

Early June, the world was in shock. President Donald Trump of the US announced that he was pulling out of the Paris climate pact. The news wasn’t entirely unexpected, but the US withdrawal still raised question marks about the world’s ability to meet the goal of capping the rise in global temperature to 2 degrees Celsius by the end of end of this century.

Sunil Misra, as Director-General of the Indian Electrical and Electronics Manufacturers Association (IEEMA), has an inside track on the country’s renewables challenge. He speaks to ‘India Investment Journal’ on what gives India an edge in this sector and how the 175GW target for renewable electricity generation by 2022 is on course.

What are the main factors behind a surge in India’s electrical industry sector?

India has seen significant and continued growth in its GDP and per capita income. There has been a substantial increase in in middle class and also aspirations of people, giving rise to consumption.

This enhanced consumption requires strengthening of the Transmission and Distribution network, which the country is undertaking with full vigour through its recent initiatives in coal and renewable sector. The government has also increased its spending on rural electrification in parallel schemes with IPDS (Integrated Power Development Scheme) and DDUGJY (Deen Dayal Upadhyaya Gram Jyoti Yojana), which has further spurred the demand of electrical equipment in India.

Indian start-ups get FDI policy boost

A new consolidated foreign direct investment (FDI) policy framework issued by the Indian government this week includes provisions specific to start-ups which is being seen as a major boost for the sector.

According to the 2017 FDI policy document released by the Department of Industrial Policy and Promotion (DIPP), start-ups in India can raise up to 100 per cent of funds from Foreign Venture Capital Investors (FVCIs). They can issue equity or equity-linked instruments or debt instruments to FVCIs against the receipt of foreign remittance.

The document reads: “Startups can issue convertible notes to persons resident outside India (subject to certain conditions).

“A start-up engaged in a sector where foreign investment requires government approval may issue convertible notes to a non-resident only with approval of the government.”

Foreign residents, except those in Pakistan and Bangladesh, will be permitted to purchase convertible notes issued by an Indian start-up.

China’s clumsy attempts to cramp India’s strategic space are holding back its ties with India.


The popular mood in India, it will be fair to say, is not very favourable towards China at the moment. A daily barrage of blunt official statements and highly jingoistic media reports from the Middle Kingdom warning India of dire consequences – even war – and reminding Indians of the military humiliation it faced in the 1962 border conflict between the two countries is largely to blame for this downturn in the public perception about China.

Prime Minister Narendra Modi’s programme to make India a major global manufacturing hub is likely to start showing results when the $68-billion of investments committed on the ground start coming on stream over the next couple of years.

Critics complain that the glass is half empty. The Prime Minister’s Make in India initiative has not led to any increase in the share of manufacturing in the country’s GDP and has not generated the huge number of jobs it was expected to.


But that, pardon the pun, is only half the picture. Experts point out that the manufacturing sector begins to contribute to the economy only with a lag of three-four years and point to the pipeline of about $68 billion of foreign investment, much of it in the manufacturing sector, to argue that a better way of describing the glass would be as half full.