Over the last 3 weeks, I attended 3 family office conferences, where I was one of the very few Indian (India-based) family offices/venture capitalists representing our nation.
At these events, I noticed that many global investors are keen on investing money in India, but sceptical from having burnt their fingers the last time around. Some of the reasons (verbatim or paraphrased) for their scepticism include:
- Investment managers who deviated from the investment idea that was originally pitched and subsequently lost money
- The complicated and tedious procedure to get money out of India for winning investments
- Overzealous tax authorities that terrorized investors
- A lack of strong legal recourse to bring Investee companies who siphon off money and fraudsters to task
- India being a tough place to do business and an even tougher one to make money
Although I agree that India is one of the toughest places to do business, I can proudly say that over the last 5 years the government has made significant structural reforms to make it easier to do business, invest, realize returns, curtail the proliferation of black economy and most importantly, bring economic offenders to task.
While these messages are clear to those who continue to maintain a presence in India despite the hardship of previous decades, they have not been effectively communicated (or if at all) to the investors that are generously pouring money into China and other competing nations purely based on hygiene factors.
So, I continue to make my impassioned pitch about how there might never be a better time than today to invest in India- the largest democracy and fastest growing economy in the world. Despite all its hardships, India has independent institutions, a robust banking ecosystem, a free-floating currency, and an equity market that has delivered 600% returns since January 2000 (Shanghai has returned 44%). Bottom line being: India cannot be ignored.