India needs to look at ESG (environmental, social and governmental) factors to attract major investors and get the sustained foreign direct investment of USD 100 billion per annum that the country needs to get back to eight to nine per cent growth, an influential industry leader has said.
The investment pool around the world is estimated to be about USD 45 trillion, of this USD 12 trillion comes under ESG, which is the environmental, social and governmental factors, according to Mukesh Aghi, president of US India Strategic and Partnership Forum (USISPF), an India-centric American business advocacy group.
“If India is going to focus on attracting large scale, long term institutional investors, then it needs to look at the ESG factors. Today India is around 130-133 on the ESG factors. It needs to start coordinating… it’s no longer World Bank ranking (on ease of doing business). Investors are rewarding companies that are looking at ESG factors,” Aghi told PTI on Friday.
“Institutional investors are looking at ESG factors of nations itself as they increase their share of investment into that environment. It is important, India starts seriously looking at that aspect. And, when you look at, if the Democrats come in (power in the US) those factors also will play a stronger role than the current administration,” he said.
India needs to look at ESG factors to attract major investors and get the massive and sustained foreign direct investment of USD 100 billion per annum that the country needs to get back to eight to nine per cent growth, Aghi said.
Later this month, the USISPF hosts its week-long third leadership summit, which among others, would be addressed by Vice President Mike Pence and External Affairs Minister S Jaishankar. Pence would participate in a chat with USISPF chairman John Chambers.
“Our questions range from his perspective of vision of US-India relationship; questions focus on the economic partnership on the trade deal, on H-1B. And then definitely the final question is, when Prime Minister Narendra Modi met Pence in 2017, he said ‘India-Ana’. So, the question is (when) vice president comes to India,” he said.
“We will reflect on the last three and a half years, but we have to also look at the next four years,” he said in response to a question. Aghi said that with America’s trade relationship getting more and more stressed out, India can play a helpful role for the US and its companies especially in the healthcare sector and the focus of the India-US ties should also be on technology.
None of the Quad countries US, India, Japan, and Australia want to go the 5G through the Chinese routes, so there is a lot of scope of collaboration on that issue as well, he noted. “It’s important for India to come to understanding on?the mobility of its professionals. So it’s important, whichever the administration comes in seriously looks at H-1B visa issues because it does impact the US companies in a positive way and you want to be able to provide those resources to the US companies. That is a plus factor,” he said
Asserting that the collaboration in the defence sector will continue, he said: “The question is where do you spend your energy, where to spend your focus on our relationship.” Aghi said India needs to open up its agricultural market but at the same time should leveraging some of the technology to make its farmers much more efficient and competitive.
“You cannot keep on protecting the industry. You’ve got to let it grow and succeed. Otherwise, it becomes just like you know we have Air India, which is baggage now. Our recommendation is, pick up specific areas, collaborate, cooperate and find a win-win value proposition,” he said.
Describing H-1B as an election issue, he said the reality is that there is a massive shortage of software engineers in the country. “If US is going to maintain the technological edge on a global basis, it needs those engineers. We can’t produce them locally. And so from a geopolitical perspective, if India and USA aligned, then there can be more cooperation on H-1B also,” he said.
The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise. The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.
The recommendation of USISPF is to increase the number of H-1B so as to help US companies become more efficient, Aghi said. Post COVID-19 pandemic, as the realignment takes place, it’s an opportunity for both countries to examine seriously they can collaborate on economic or technological fronts and on cultural and agriculture fronts.
“It’s an opportunity for both countries. We just need to pick up some of these topics and keep on making sure at least a fire is burning, as whichever administration comes back after the November election,” Aghi said.