NRI Investment: An Augmentation of FDI for Make in India

We Indians have enjoyed notable success internationally in terms of per capita income, but our performance at home does not necessarily match our progress abroad. I believe the achievements that we have made overseas—particularly in the United States of America—highlight the stark divide between the country’s potential and its actual performance. In this article, I have argued that India must embrace globalization and explained how more open competition will foster better-performing companies in India.

Potential versus performance
It’s so easy to grasp the gap between India’s potential and its performance because we can see the potential of what an ethnic Indian can do in the most competitive human laboratory in the world, which is the United States of America. And when the Indians arrived in America, they thought they might be number five or number six in terms of per capita income. They ended up being number one.

The fact that Indians, ethnic Indians, could become number one in the most competitive human laboratory in the world showed what their potential is. They outperform people in universities, in corporations, as deans of business schools. And then when we go back to India, and we see the same Indians, and we look at the level of performance, we are wondering, “What happened here? Why can’t the people in India achieve a similar per capita income?” Forget 100 percent. Think of 50 percent. Think of 30 percent of what Indians have achieved in America and India would have an explosively large global economy. So clearly there is a mystery here that needs to be solved.

Closing the gap
It has taken several decades, after the end of British colonial rule, for we Indians to gradually wake up and realize, “Hey, I’m as good as anybody else. I can perform as well as anybody else.” The levels of cultural self-confidence are rising decade by decade in India.

And as they keep rising, I think India’s performance will continue to improve. But still, there is some way to go. The fastest way to accelerate the transition to address the gap within the performance of Indians overseas—not just in the United States of America but in Singapore, in England, in Canada, and elsewhere, is to create a stronger symbiotic link between overseas Indians and Indians in India.

During my stint at McKinsey and Company (London office) I have learned one thing which I want to mention here is that, just allow a special entry for overseas Indians to come back and invest in India. Because I’m sure they would be happy to do so. And it is easier for them to do so because they understand the local culture and they are aware that it’s frustrating and difficult to invest in India. But they can address those difficulties and those frustrations. So, the more that India could do in terms of establishing this symbiotic link between Indians in India and overseas Indians, the more India’s performance will grow.

Embracing the future
It’s paradoxical that for a long time—especially starting from 1950’s when India had a kind of socialist bias—India was one of the chief opponents of globalization because it thought that western multinational corporations would come in and harm India because the poor Indians are so weak and defenseless. The paradox here is: if we look around the world, wherever there’s an open global economic competition in any part of the world, the Indians do very well.

So in some ways, the record shows that the more open global competition is, the better the Indians will do. And therefore the time has come for our External Affairs ministry, which has changed its position somewhat, to actually swing sharply rightwards and say, “India will be the number-one champion of globalization.” Because the more globalized the world becomes, the more integrated India becomes in the global economy, and the better India will perform. Because Indians can compete no matter what the competition is like.

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