Destination India, red to ticker tape

India is offering a rapidly changing user experience for foreign investors. There are those, like Tesla, which want rules to be altered for it to test the market. There are others, like Goldman Sachs, which find India to be interesting, but confounding. And then there are those that have been in India for long, like Hindustan Unilever Limited (HUL), which understand the opportunities and challenges more clearly. Last fortnight, Elon Musk stated that making ‘significant investments in India is something we intend to do’ and be part of India’s drive for sustainable energy that could include solar power, battery packs and electric vehicles. Musk hopes to bring SpaceX’s Starlink satellite    internet service to India as well. Both these will need getting around regulations that impose high import duties on automobiles used to test the market, and on pricing of spectrum for satellite cellular service providers. Yet, Musk’s statement after meeting the PM suggests a workaround is on the cards.

This can-do approach on foreign investment is making India so much more interesting now than before the pandemic. David Solomon, CEO of Goldman Sachs, says India’s high-growth trajectory makes it a compelling business proposition, but bureaucratic hurdles can stymie investment decisions. The evolving US-China dynamic presents an interesting opportunity for India. But Solomon’s banking clients want less red, more ticker, tape before finalising plans to diversify supply chains. India is an interesting market for Goldman Sachs, not a big one.

For Unilever, however, India is its biggest consumer goods market by volume and is powering ahead. Nitin Paranjpe, HUL’s chairman, sees the India opportunity in formidable digital infrastructure and transformation as an investment destination. Yet, the challenges run considerably deeper. Gender disparity pulls down the consumption potential of a young workforce, and sustainability limits the growth of consumerism. Happily, for HUL, the new wave of investments India is wooing brings sustainable business to the centre of its development agenda.