US-based Indian-American investors who once welcomed Prime Minister Narendra Modi with open arms in Silicon Valley but have been facing a lukewarm relationship with him lately hope he will follow through on the promises he has failed to keep in the first term. Investors’ also hope he focuses on the bread-and-butter issues, infrastructure and climate change more in the second term.
When indica reached out to some prominent pioneer venture capitalists who have made investments in India, said they were surprised to see Modi’s astounding victory and is optimistic about India’s future.
“I was expecting him to win but with a slightly lower margin,” said Kanwal Rekhi, Indian-American venture capitalist, angel investor, entrepreneur, and managing director at Inventus Capital Partners.
“Investors did not get what he promised last time. The prime minister knows that,” said Rekhi. “I think he will focus on the economy to build his legacy.”
Rekhi said that in any case, he is super-impressed with the wisdom of the voters.
“This is the most sensible thing they could have done. If you are going to elect Modi then might as well give him the mandate to get the job done,” Rekhi said and added that there has been a consolidation of the BJP where it has emerged as a force in the east and also in the south. Tamil Nadu, Kerala, and Punjab are the only three states where it did not do well.
On the other hand, Congress has been told in no uncertain terms that it has to reimagine itself beyond the family and beyond the “Garibi Hatao” (remove poverty) mindset.
Frank Islam, IT entrepreneur, investor, and chair of the FI Investment Group responding to Modi’s victory and the message he has for the prime minister said, “The prime minister [should] focus on the bread-and-butter issues in the second term. I believe the Indian economy has been underperforming since 2016, primarily due to demonetization and the haphazard implementation of GST. Hundreds of thousands of jobs were lost and thousands of factories were closed.”
Adding further he said that he hopes in the next five years, his government should advance and intensify the critical reforms in areas such as the economy, education, and health care. It should focus on creating more jobs and building better infrastructure, as well as implement policies to tackle climate change.
When asked if he imagined the BJP alone would get 303 Lok Sabha seats out of 542 while Congress received not even 10 percent of that, Islam said, “No, I did not expect the BJP to have the kind of resounding mandate it received, and I doubt many did.”
Everyone thought the party’s tally in Uttar Pradesh would go down significantly because of the alliance between the Samajwadi Party and the Bahujan Samajwadi Party. But it managed to nearly repeat the 2014 performance in the country’s largest state. Whatever seats the BJP lost in UP was more than made up for in West Bengal, where it emerged as the second largest party.
The Congress party was expected to do well in Rajasthan, Madhya Pradesh, and Chhattisgarh, the states where the government was formed in the past year, as well as in Karnataka, where it has good organizational strength. Even in Gujarat, one thought it will make a dent in the BJP’s tally, considering its strong show in the last assembly election there. But none of this happened.
Islam sharing his opinion on why BJP won, said that BJP benefited from a number of factors. 1) Brand Modi is immensely popular in the country. When it comes to handing over the reins of the country, people don’t trust any other leader or party as much as they trust Modi. 2) Modi, as a campaigner, was infinitely better than opposition leaders, including Rahul Gandhi. 3) Modi was able to turn this election into a single-issue election: Nationalism. Everyone played on the turf of the BJP, the most nationalist of all parties. And 4) There was no unity in the opposition ranks.
When asking investors who were not pleased with Modi’s actions in the first time what they envisioned for his second term and as an investor how they see things moving forward one said, “As I mentioned earlier, the prime minister should focus on jobs, infrastructure, and economy.”
“The pace of the reform during his first term was disappointing,” Islam said and sounding hopeful said, if he continues on the path of reforms, it will lead to more jobs, better infrastructure, and a stronger economy, “I would imagine that, now that he received a resounding mandate, his government will boldly undertake the necessary reforms.”
Another silicon valley veteran venture Capitalists, Vish Mishra shared his perspective, on Modi’s landslide victory, said, “It is very heartening to see a huge turnout by Indian voters both in numbers, 600 million voters and percentages, 67 percent of any democracy in the world! Propelling Modi Administration to victory for the next 5 years bodes well for India.”
He said that while there were many accomplishments in the previous five years, such as foreign policy success and the recognition of India as a major regional and world power; structural problems like unemployment and poverty remain to be addressed.
These issues can only be addressed by economic development through a massive infusion of capital which India has to obtain from more foreign direct investments.
Mishra said he sees this to increase to over $100 billion annually because investors will see more stability in the country. This amount is still insufficient to fuel jobs growth. But he also sees more infusion of venture capital from abroad rising to over $50 billion from the current base of $10 billion. This is bound to give rise to the innovation economy given the vast talent and expanding mindset and ecosystem in India.
Sounding optimistic about India, Mishra said that the U.S. India relationship should get better the on political, economic, and cultural front and bilateral trade and cooperation should rise over the next five years.
Naren Gupta, one of India’s highest-profile venture capital investors and founder of the investment company Nexus Venture Partners sharing his thoughts said, “The first term was excellent for the common man, Indian businesses, and investors.”
“Modi now has the mandate to make long-needed reforms that would transform India into a global leader. We are all proud that Indians voted in the best interest of this great nation,” Gupta said.