Why I chose to build my career in India
When I informed people that I would be moving to India post my MBA from Harvard, reactions varied from happiness to surprise to even sympathy. A few of my well-wishers were simply disappointed that I was not taking up a high-paying job in the land of opportunity and dreams, the United States of America. This post provides the reasoning behind my decision to forego the American dream to build my career in India. I will limit this post to professional reasons, while several personal reasons strongly influenced the decision. This post has been organized across how purpose led me to India, how this is the most opportune time to launch a career in India and how I believe I possess the most agency to make a difference in India than any other place in the world.
Earlier today, I paid a brief visit to the dilapidated manufacturing facility in the picture below. The facility which is overgrown with shrubbery and resembles a metallic graveyard today, was once the toast of the town. Within these ruins, lie the reasons for my decision to make a difference in India.
I hail from Kerala, the southernmost state in India. Kerala, apart from being known for its pristine natural beauty, coconut trees and beautiful beaches, is one of the last standing bastions of socialism. I grew up in a family which was dedicated to safeguarding the environment. My parents built a company, Travancore Sulphates Limited (TSL), which was a pioneer in pollution abatement technology. Unfortunately, TSL failed within a decade, crippling my family financially, impoverishing a hundred employees and their families, and leaving many customers bereft of cost-effective effluent treatment. A diagnosis of TSL’s failure reveals the usual suspects, a hostile government, a corrupt bureaucracy, and lack of growth capital. This was an era when any forms of equity funding like venture capital or private equity were alien concepts, with businesses relying solely on debt as a source of external funding. The imagery of a company being smothered out of life by an antagonistic political system and inefficient labor and financial markets, left an indelible mark in my childhood. Over a period of time, this experience has sub-consciously shaped the purpose of my life.
Purpose #1— I want to help business flourish in India
An early initiation to the harsh realities of doing business in India could have had two varied effects on me — get tired of the system and escape to a better market or stay home and try to change the system ground up. I chose the latter. While it is improbable that a few individuals can transform the political system or reform labor markets, it is very much possible for individuals like me to help build robust financial markets. And that is where I have decided to focus my efforts at least during the initial years of my career. I will be a private equity investor doing growth equity and buyout deals across industries in India. I hope to be a facilitator for infusing much needed equity capital to fund prudent growth, while helping businesses establish more robust management systems and processes and improving corporate governance, providing Indian companies the same resources which TSL didn’t have access to 25 years back. What Indian businesses need is not dumb money, but active investors who can not only provide capital but also be agents of transformation across key functions. Private equity as a business model relies on improving the underlying health of the business and this can be leveraged to create world-class companies in India. An investor’s role doesn’t end with building better-run companies, but often creating entire industries, supply-chains and markets.
Purpose #2 — Leveraging business to solve India’s gravest problems
Creating industries: One of my biggest learnings from business school is the capacity of private enterprise to solve the most serious problems faced by the world today — poverty, malnutrition, diseases. Only companies which seek profits can have sustained impact at scale on any of these problems, while NGOs and charities can bring to light many of these issues. I believe being an investor, endows me with the agency to help build companies and create industries which can focus on solving many of the problems that India face today especially in agriculture, food security, healthcare and financial inclusion. My personal dream is to influence the creation of agriculture supply chains and technology enabled healthcare delivery with the power of smart capital.
Reviving industries: On the other end of the spectrum, private equity can also help in reviving struggling companies hurt by challenging macroeconomic conditions. Interestingly, the non-performing assets/loans problem which has afflicted the banking sector in India today, can only be solved through fresh capital infusion, where the PE industry can play a leading role.
While I don’t have grandiose visions of me being able to solve any of these problems on my own, I hope to be a catalyst in bringing about necessary changes.
Opportunity #1— India is a shining beacon in a global economy with stagnant growth
The global economy has been challenged in the recent past by a rapidly ageing population, deflationary environment and depressed oil prices. Growth has been hard to come by, with growth rates only marginally improving in early 2017. The long revered principles of globalization are facing a crisis of faith as nationalistic sentiments take center-stage as evidenced by the US Presidential Election and Brexit in 2016. As investors and managers search for the holy grail of growth, India with its 6–7% per annum GDP growth is a shining beacon in this rather gloomy global economy.
With India usurping the tag of being the ‘fastest growing major economy in the world’ from China (it has temporarily lost the tag post demonetization), it is expected to be a major driver of global growth. India is today the fifth largest economy in the world in nominal terms and the third largest on a PPP adjusted basis. India’s rich demographic dividend, with the world’s largest working population, a large and growing domestic market, expected productivity improvements and a government-funded infrastructure investment drive, position India well to grow in excess of 7% per annum over the next decade. Unlike the export-driven growth model of East and South-East Asia, the bulk of India’s growth is going to come from its own burgeoning domestic market, hence insulating the economy to an extent from worrying global trends like anti-globalization and nationalism.
On the flip-side, the single biggest drag on growth in India is the abysmally low investment levels, both public and private. The stressed balance sheets of India Inc. and the bad loan problems faced by Indian banks have put a straitjacket on the private sector to deploy capital. Hence, long-term capital is essential for the investment cycle to pick up. I believe PE firms like the one I am going to work for should be in the vanguard of this effort to improve long-term investment, especially in manufacturing and infrastructure.
Opportunity #2 — The current political dispensation inspires confidence
Markets and business can thrive only in the presence of a strong, supportive government and effective regulation. I have never been more confident in the effectiveness of government in India than I am today. I believe the biggest success of the government to date is not in reforms or governance, but in the confidence it has inspired among the youth of the nation. The current regime has often been criticized for focusing on form over substance. But the intangible benefits of form should not be overlooked. By running successful marketing campaigns around snazzy initiatives like ‘Make in India’ and ‘Swachh Bharat Abhiyan’, promoting a sense of national pride and undertaking bold moves like demonetization, the government has been successful in (a) motivating a generation of young Indians to work hard and contribute to the national cause and (b) inspiring confidence in domestic and global companies alike.
I believe the government has been able to back up the form with real substance in the form of progressive reforms, better governance, higher transparency and a rigorous focus on improving the business climate in India. The highlight of the first 3 years of the NDA government has certainly been the roll-out of the Goods and Services Tax (GST) to create the single largest market in the world, while the opening up of sectors like insurance, real estate and defense have provided impetus to investment appetite. While the botched execution of demonetization cost India dearly in terms of short-term growth and caused endless hassles to its people, the long-term benefits of pushing hundreds of millions of Indians into the digital economy are astounding. However, the government has significant ground to cover in land and labor reforms, solving India’s ballooning bad loan problem and building world-class infrastructure.
Agency — As an Indian, I believe I can have the most impact in India
History has thrown up several exceptional luminaries who have been able to change people’s lives globally. While global impact is a great end-state to aspire towards, I want to start by targeting smaller communities. I have spent all my life with the exception of two years, in India. I believe, given my background, networks and cultural context, I can perform the best to my capabilities and have the most impact within India. We can always descend into displacing and diffusing responsibility and expect someone else to transform the country — ‘Why should I leave my cushy job in Silicon Valley and start a company in India? Someone else will do it.’ In response, I ask, ‘If not you, then who?’. One can also come up with reasons to delay a move back to India, but I strongly endorse the idea that the best time is now. Let me be honest in saying that my motivations are not purely selfless or altruistic. I concur that along with potential impact on society, my chances of personal success are also enhanced if I work in India, making it a win-win proposition.
The Indian Dream
I have been immensely lucky to get the opportunities I have received, let it be in the educational or professional spheres. I couldn’t have been better positioned to pay it forward than I am today. And I choose to start paying it forward to the communities I grew up in, the institutions that shaped me, the people who contributed to my success and the country which spent hard-earned taxpayers’ money to pave the path I have taken. These contributions should not be taken for granted.
I quite actively post on social media about India and the Indian government, mostly positive attributes. While this could be perceived by some as bordering on fire-brand nationalism, frankly it comes from a place of gratitude and love for the nation. I consider myself lucky to have gotten the opportunity to start a career trajectory in India from which I can have significant impact. I hope I can contribute to India’s growth as a stronger, more equal nation while flourishing as a professional and individual. I aspire to help transform India into a country where ordinary citizens can dream to make a difference, where meritocracy trumps caste and religion, where people can cross social class lines through hard-work and determination. I long for the creation of the Indian Dream.
