At Harris Sliwoski, we keep close tabs on what is happening around the world, and we know that our friends and clients do, as well. We are happy to provide this podcast series: Global Law and Business, hosted by international attorneys Fred Rocafort and Jonathan Bench, where we look at the world by talking with business leaders, innovators, service providers, manufacturers, and government leaders around the world.

In Episode #77, we are joined by Jayesh Kothari, associate partner at DSK Legal’s Mumbai office.

We discuss:

  • Why foreign companies should consider investing in India
  • The role of democracy in making India an attractive business destination
  • India’s steps to speed up dispute resolution, particularly arbitration
  • Preferred and up-and-coming destinations for foreign investment
  • The impact of COVID-19 on the Indian economy
  • Listening, and watching recommendations from:

We’ll see you next week for another exciting and informative episode when we sit down with Mareo McCracken, Chief Customer Officer/CRO at Movemedical, to talk about international sales.

This podcast audio has been transcribed by an automatic transcriber.

Fred Rocafort  0:07 

Global law and global business go hand in hand, but never seem to keep pace with each other. The importance on the global stage of developing and developed nations waxes and wanes, while consumption and interconnectedness steadily increase all the while laws and regulations change incessantly requiring businesses to stay nimble. But how do we make sense of it all? Welcome to Global Law and Business, hosted by Harris Sliwoski International Business attorneys. I’m Fred Rocafort.


Jonathan Bench  0:37 

And I’m Jonathan Bench. Every week, we take a targeted look at legal and economic developments in locales around the world as we try to decipher global trends in law and business with the help of international experts. We cover continents, countries, regimes, governance, finance, legal developments, and whatever is trending on Twitter. We cover the important, the seemingly unimportant, the relatively simple and the complex.


Fred Rocafort  1:02 

We hope you enjoy today’s podcast. Please connect with us on social media to comment and suggest future topics and guests.


Today we are joined by Jayesh Kothari, a corporate, commercial and transactional lawyer based in Mumbai, India. His primary practice areas include corporate advisory, corporate, commercial, m&a, joint ventures and private equity venture capital. He regularly advises domestic and foreign clients on these matters. He’s an experienced corporate lawyer, working with clients from very diverse sectors, including manufacturing, advertising, technology, insurance and consumer foods, and works for the law firm of dsk. Legal where he is a member of the Japan desk. And there’s a lot of work advising Japanese clients who are investing in India. And with that, Jayesh Welcome to Global Law and Business.


Jayesh Kothari  2:06

Thanks, Fred. Thanks for having me. And thank you for the introduction.


Fred Rocafort  2:10 

Before we go any further, I would like for you to supplement that very brief, very general biographical sketch that I that I offered, so perhaps we can go a little bit beyond those highlights. I’d love to hear more about what motivated you in the first place to to become a lawyer. And and tell us perhaps a little bit more about your trajectory, perhaps little bits and bobs that we didn’t include in the in that I didn’t include in my own in my own biography.


Jayesh Kothari  2:49 

Sure. So basically, to give you a little bit of background about myself, I am a graduate in commerce and economics, I finished my graduation in economics and commerce. The idea was never to become a lawyer. I completed my Business Management Studies after graduating from commerce. And somehow in business management got hooked on to corporate law as a subject, which was one small, tiny subject. And after completing Business Management Studies, I took the plunge and ended up studying law for three years. And now, it’s been almost 10 years practicing as a full time lawyer. I’m currently an associate partner with dsk legal. Just to give you a little bit of background about our firm, we are a full service law firm having operations in four cities in India, Mumbai, Delhi, Bangalore and Pune. We have a total of around 170 lawyers across these four cities. My office happens to be our biggest office in terms of number of lawyers. And like I said, we are a full service law firm practice areas, including disputes, corporate commercial laws and real estate happened to be our core practices.


Fred Rocafort  4:16 

Excellent. So let’s let’s, let’s pull that that thread a little bit and talk about about India itself, right. Obviously, the, I think the fact that you have this, this presence across the country or at least in, in numerous cities, or a few cities in the country, tells us something about what’s happening there. And about the, the lack of concentration, right, the opposite of that, the the, the, the diversity of what’s happening there in commercial terms. So let’s talk more about that specifically with a with a view two to four In investment, my understanding and much of this comes from the opportunities I’ve had to listen to you and your colleagues at other events. My understanding is that historically there was perhaps some hesitancy some concerns in India regarding foreign investment but there’s been a real sea change in the in the environment. And there have been numerous developments across across government primarily, as I understand it to make the country a more welcoming destination for foreign investment. So we’ll we definitely want to go into into those specifics but but but big picture? Um, what is it about India that should have foreign companies looking in the first place, whether it is looking at India as a market for its products or whether it’s looking at India as a manufacturing base or perhaps looking at more more ambitious projects, there’s of course the, the headlines, we know, it’s it’s set to become the most populous country in the world that of course, by itself is of course, an important and important issue, but please tell us a bit a bit more about why you see India as a place that international business should should increasingly look at.


Jayesh Kothari  6:27 

So, so, Fred, in terms of the overall trajectory of India, if you if you see over the last 25- 30 years, India as a country with respect to foreign investment, I would say is a is has been roughly 25-30 year history. India opened up its economy to foreign investment post 1991 when the major change and liberalisation came through, so when you compare India to the other geographies around the world, it’s still at 25-30 year sort of economy when when foreign investment really first started coming into India, or the country really opened up. Historically, if you see developed countries, they’ve had far more years ahead in terms of you know, opening up business wise commercial opportunities, etc. So, in terms of the sheer the number one advantage that India today has is it’s still very nascent in terms of where the economic development stands, as you rightly pointed out, India is today the second most populous country in the world and It’s said to be become the popular the largest populous country by in the next few years. In terms of opportunities for foreign investors, there is the biggest opportunity is the large domestic consumption that India offers because of its population, unlike other economies and other geographies, where the reliance is on exports to drive the GDP, India is self sufficient in terms of its domestic consumption. So, if you see the ratio of the India’s of India’s GDP, the domestic consumption versus the earnings from exports is the earnings from exports pounds a very small fraction of the overall GDP of India. So, the domestic consumption story is one of the biggest reasons which attracts foreign investors due to having a large pool of consumption readily available. The other reasons obviously are India is increasingly over the last few years become a manufacturing base for several foreign countries, foreign companies, in terms of manufacturing facilities, manufacturing opportunities, the government has liberalized a lot of lot of regulations, a lot of new regulations have been brought in place to welcome Foreign investors. These are some of the sort of key areas why we are seeing India suddenly become as as one of the popular choices in terms of foreign investment. The other obviously, softer issues are being a largest democracy. So you have a stable government. So these are important aspects now that foreign companies have started looking at if you see what’s happening around the world with the political and economic situation, you know, with respect to wars, escalations, etc. India, with respect to a large part of other countries offers a safe harbor or a safe political and functional environment for foreign investors. That’s very important, because today, having a stable government stable economy is very, very important for a foreign investor who’s looking at 10-15 20-30 years of having presence in India. So these are the broad sort of areas, why India has suddenly sort of become important. And so every foreign investor has India on their wish list or on their to consider list if I may say.


Fred Rocafort  10:21

I just want to follow up on on one of those points, specifically, the fact that India is the largest democracy in the world I, as you as you know, I spent many years in China, most of most of my career was spent there. And for for a long time, I really saw the world of, I don’t want to say through a through a Chinese lens, but strongly influenced by by by that experience. And I remember let’s say 15 years ago or so, when and then, of course, the the China and the India conversation is one that has played out over the years. I’m sure it happens, of course, in India happens in China happens here. And I remember that around that timeframe. If you were to mention this fact, the fact that Well, you’ve got India’s as a democracy. That’s, that’s that’s a huge difference. When you compare it to to China, back then I think the most of the responses would have been either something along the lines of, well, who cares, you know, that that’s, that’s, yeah, good for them. And in some cases, the the response might have been dismissive. They might have said, Well, yeah, but actually, that is a problem, because many of the things that China is accomplishing in terms of infrastructure development, etc, would be very difficult, or are difficult in a place like India. However, I see now, especially in the last few years, and it’s it’s a very hard thing development, it seems that we’re, we’re not quite there yet. But we’re certainly, at least in my view, we’re moving in, in a way where this is beginning to matter more. And perhaps, it’s not so much an issue of the political scientists view of whether democracy is a superior model to a totalitarian regime. I mean, that’s, that’s, that’s an interesting debate. I think people are beginning to look at the practical board have that right. And when you have a situation, like we are experiencing right now, with a pandemic, where we have unprecedented challenges that really go to, to the core of how we we deal with problems as a society and how we interact with other societies, I think this starts to matter, I think that or starts to matter more, for example, just just to give one example, and I’ll turn it over to you for your perspective. But if you take the issue of medicines and and health supplies, obviously, there are going to be issues associated with that. Anytime you’re bringing those products from abroad, especially if you’re shipping them across across the oceans, but I think that there are some added components. When you’re addressing issues that involve that implicate public health, I think it really matters who your counterpart is. And in that sense, I think there there’s a lot to be said about working with a partner like India that, in so many ways, resembles our own, resembles us in so many ways. So do you see I mean, perhaps looking at it, mostly from from the from the conversation in India about these topics? Do you think that perhaps that it’s fair to say that this is the fact that India is a democracy and is different from China? Do you think that’s beginning to play out more and perhaps in a more positive way than it has in the past?


Jayesh Kothari  13:58 

It is, it is so so you’re right. I mean, what you say is correct. And democracy is a double edged sword, right? I mean, it comes with its own set of challenges. But increasingly, what has happened is who the foreign investors or the companies looking at India are, like I said, are beginning to look at a safe harbor or preferred destinations where they can have stable business operations, predictable stable business operations, where there is no uncertainty of their business being shut down the next day, so that way, in terms of if you see the trajectory of India over the last 20-25 years, like I mentioned, it’s they’ve they’ve liberalized over time, so it’s as as we speak, and if you see the trajectory like I said, India has welcomed India has looked at the issues which were bottlenecks and the foreign policy that is currently in place, the government in fact, as we speak in the last few days, also government has liberalized the economy and opened up the telecom sector, which was again a regulated restricted sector. It has, as of yesterday opened up 100% foreign investment in telecom sector, which was not the case earlier. So, so the positive of the positive direction towards helping India is the willingness of the current government to accept the shortcomings and have a viewpoint or an inclination to bring about those changes, which will really matter which will affect the economy on the whole, which is going to be more welcoming for a foreign investor. And the most importantly, give a sense of security to a foreign investor that look, if you come to India, we are welcoming you with open arms, you can do business in India, without any issues without any harassment. Over the last few months, what government has also done is they have retrospectively closed down all the tax litigation that was prevailing with foreign investors, including some of the foreign investors. That was a big step, which was sort of a sore point in the Indian economy where, where foreign investors were always hesitant on the tax treatment, and the treatment, they would get around the taxation issues. The government was bold enough to accept the wrongdoing or the decisions that it takes, took historically, and reversed the orders to sort of refund the monies back to the tax demand, roll back the tax imbalance effectively. So these are the measures collectively, you know, these these things can only happen in a democracy, you know, where you have consensus or a buy in from all the political parties. There are no reasons or issues of things, again, reversing or reopening. So overall, all of these things have turned in a positive sort of manner for India, especially in the last few years, including during the pandemic.


Fred Rocafort  17:14 

You bring up an interesting point. And I think sometimes when when this debate is, or this conversation is too theoretical, I think people people miss out on certain important facts, as you pointed out, when when you have a democratic system, where, let’s say the different viewpoints are out in the open, and the legislative process has to take into account these differing views. And of course, I’m not saying that there are no issues and that it works perfectly everywhere that there is a democratic system, but ultimately, what legislation, at least to some extent, really has to reflect that those different views. And you’re going to have legislation that already incorporates a certain measure of compromise. Whereas if you look at a government, where one party rule where there’s a segment of the population that decides what they want, with any kind of change, you could have an absolute reversal, whether that’s a change for the positive or the negative, that’s that depends, right? I mean, in some cases, the change might be a positive one. But nonetheless, there might be that element of uncertainty.


Jayesh Kothari  18:35

Well, that’s where this but it’s very important that again, like I said, that’s the most important thing, in terms of, you know, sense of security. Because when you say that one party having a rule to make or break a legislation that could swing either ways. In today’s scenario, foreign investors don’t want uncertainty, they’re looking at certainty in terms of business operations, because there’s money at stake. You know, it’s not easy to, to start operations in a country and then shut down operations in the country. So So when an investment decision is made, and we advise a lot of foreign investors, when they look at all of these, including manufacturing, you know, information technology across sectors. One important aspect as as their overall business objective is definitely the political environment and the sense of stability that they’ll get. That’s, that’s, I think, one of the top five items that most foreign investors are now started looking at. Because if you see, you know, the western part of the world in mid western part of the, there is a lot of conflict. China, again, the situation with China, you know, again, all world economies are changing the stance with China. It’s It’s so so there are very few alternatives. There are very few limited alternatives that are available if you sort of want to take China out. of the equation. And when you kind of do the pros and cons, India kind of stacks up at the very top of the list where, you know, there are more positives than negatives, if one was to sort.


Fred Rocafort  20:14 

That said, let’s turn our attention for a little bit to the potential negatives, right. So if you’re if you’re if you’re looking, let’s say you’re you’re advising foreign company looking to enter India, obviously, there’s a lot of as you’ve mentioned, there’s there’s a lot of positives there that are probably going to be catching their attention right there. Especially, let’s say some company that might have not had the best experience in another jurisdiction where they’re saying, look, you know, we understand that democracy can be messy, but there’s things about it that we like in terms of, of the security and the guarantees that we have. But on a practical level, what are what are some of the issues that we might face? Right? So So what would be? I mean, if if you’re looking, if you’re trying to give a nuanced outlook to a potential investor, what are the most likely issues that they will they will face when they enter in?


Jayesh Kothari  21:14 

So I think some of the legacy issues still continue. You’re right. I mean, there are some sort of pitfalls, there are some areas which still need working, I think one critical area still remains is complexity of regulations and the sheer number of regulations that are prevailing in India, because of the Democratic setup that we have. And we have division between state legislation and central legislation. There is a lot of overlap between state state purview as well as central purview. So what foreign investors expect is limited regulations, sense of clarity in terms of what regulations sort of are applicable when they come into a new country. So I think the sheer number of complex regulations and the volume of regulations are the one of the biggest hurdles that a foreign investor potentially faces again coupled with, if you are a foreign investor looking at operating in multiple locations in India, you have to look at not just the place where you’re setting up business operations in India, but across locations that you’d be operating in India. So you will have to comply with all the regulations that are prevailing in various parts of the country. That’s another sort of pitfall or hindrance that foreign investors face. Also, there is a lot of there is there is a lot of lack of awareness, when when in terms of shared information, while the government is trying to do their best to kind of put the regulations or the channels to enter India, there is still in terms of as a foreign investor, if I was sitting outside India, there is a lack of sense of lack of awareness amongst what what, what compliance is, do I need to follow? What are the measures that I need to take to set up business in India, while there is information available online, but again, most of it is not 100% reliable. So that lack of awareness also sometimes sort of affects the investment decision as a foreign investor. The other issues which which have kind of worried foreign investors for many years is the fear of litigation in India, historically, litigation in India has sort of precipitants of it being long drawn, not sort of getting resolved in a time bound manner.


While I wouldn’t say it’s, it’s untrue, it is it is getting better. But yes, some of the some of the challenges still remain, you know, so for foreign investors to get injunctions remedies, you know, in a timely manner still remain mortal. Like there is, it is it is difficult, you know, let’s let’s take place except the ground reality, it’s not kosher clean today. And, and the last few things are the tax nuances. And the tax litigation, the ability of the government to go back seven years and sort of open up reopen up any sort of tax litigation. Those are the areas you know, those are the broader areas where foreign investors are still a little bit of his there’s still a bit of hesitancy around these issues. And and the government is, is cognizant of, of these, these, these sort of bottlenecks or these roadblocks and is trying genuinely hard to fix those issues. For example, there are a number of labor legislations in India you know, if you if you were to actually compare there are several labor legislations across the length and breadth of India’s state level, central level what the government is now doing is bringing a central labor code. So uniform labor code to apply across the country, you know, which brings a lot of clarity to a foreign investor who does not have to comply with every single regulation. So Uniform Code to have all the regulations or the summary or some in substance support regulations in a single sort of legislation. So I think that’s the need of the hour. I think what if if India was to expedite bringing in more uniform codes across various regulations, I think it will make a lot a lot of the life a lot easier for let’s say, for the government to to sort of bring in investment in the country also foreign for foreign investor, it will give a lot of comfort and clarity in terms of you know, compliance is what is happening now is the level of while the government is trying to streamline the investment process in India. On the other hand, what has increased is the level of compliances. So, you’re trying to solve one problem, but the other problem is opening up. So, that is another issue which I even as we speak for him investors face today, the sheer number of compliances beat, you know, business operations be tax, you know, meet legal and, and, you know, this is something that is again, a roadblock. So the government should try to reduce the number of compliances to ensure that the the sort of foreign investment investors do not have these sort of issues.


Fred Rocafort  26:36 

From what I have learned from, from your colleagues really. It appears that by well, it, let’s say, it’s, if you were to focus your dispute resolution efforts, or classes more precisely, in your in your contracts, if you were to focus on arbitration as a as a mechanism to solve disputes, it appears that I don’t want to say that that you will, all everything will work smoothly. That might be that might be an exaggeration, but it does appear that there’s been quite a bit of, of development, positive development in that direction. And there are measures in place that make it Well, certainly a more appealing option than litigation. That’s that’s not a an issue. That’s, that’s singular to India, obviously, in many countries, arbitration might be preferable to litigation, but it does seem that there’s been real real progress in that regard. So can you can you can you talk to that?


Jayesh Kothari  27:40 

Yeah, absolutely. I think like I said, government is cognizant of the the bottlenecks that prevail. One example I gave was meaning the uniform labor code, you know, litigation is the another area which which continues to be a bottleneck or problem area. And to address that, you know, a few years ago, the government has made arbitration in India at a time bound exercise. So, every dispute resolution, which is as per the Indian arbitration now has to be completed in a stipulated time period. With extensions earlier, what what used to happen is, the parties would set up an arbitration tribunal, they will, it will be a long drawn process, you know, parties will delay the process. Now, there is an obligation on the arbitrator as well as in the parties to complete the dispute in the time bound by law, and even an extension only one extension is given. And those are all that extension is also given on very, very specific grounds. So if undisputed is not so so there is enough incentive for it now regulated incentives. So it’s, it’s, they’re bound by legislation now to to complete an arbitration and time bound manner, which is not the case earlier. So yes, measures like this, definitely help, you know, giving comfort to parties, you know, willing to contract in India. Some of the other measures include, you know, parties choosing seat outside India to to litigate, you know, those those options are also something that that’s a preferred option. For example, if you are a US investor, and if you are working with an Indian client, you can have an arbitration in let’s say, Singapore or Dubai, for that matter, and, you know, that that enforcement of that award can be brought into India. So, so these are the measures that are now the government is working hard on these things. There is very, the government has also set up a lot of commercial courts earlier. It used to be only specific courts, civil courts, High Courts, and then Supreme Court. District Court, High Court and Supreme Court handling matters. What now the government is doing is they understand that they need specialized courts for commercial matters. So they’re setting up a lot of separate commercial courts to your matters and expedite the process of resolving disputes.


Fred Rocafort  30:07 

I have a practical question. And it concerns the states in India and how they how they fit into the larger picture. I remember, a few years ago, I was helping some some colleagues up at my old firm, we’re planning a business trip to to India and helping them with with logistics. And looking, I remember looking at the at the map, Google Maps, you know, which has hold up place marks and photos, etc. And I was kind of it was interesting, I saw that, you know, they’re, they’re relatively short trek out to the factory, would take them across the state border. And when I looked, I saw that there was a border checkpoint, which was, which was interesting, right? Because, I mean, in general terms here in the US, we don’t have those, which is not to say that there are restrictions in specific cases, for example, with trucks, you know, they do have to sometimes undergo checks when they when they go into a new state, and then there are it’s not, it’s not a completely it’s not as if state borders are meaningless, quite the opposite. But um, but I’m curious about that. I mean, I’m looking at it from a from a practical point of view, for example, let’s say, if my company has a factory and in one state, and it just so happens that the the nearest port is in is in another state, are there any issues that could impact transportation, for example, of my raw materials? Or the finished goods going out?


Jayesh Kothari 31:52 

Oh, no, no, I think it used to be a challenge. Again, this is again, one of the measures that the government has worked on, it used to be a challenge. And again, few years ago, what what the government is brought in is a sort of EA, it’s called an expressway build. So basically, once an invoice is generated from your factory, and you’ve paid the duty for the tax, the road tax that that’s required to be paid, technically, it’s again all electronic. So along with the number of your vehicle or your your, your truck, you know, all the state borders technically in their online system can see that all the duties etc, with respect to the consignment that is moving have been paid. So they don’t really get stopped anywhere. In terms of its end to end it’s it’s earlier they used to be at borders, like you rightly said they used to be checking, they used to be papers need to be checked, it used to be a time consuming exercise, again, delivery of goods will take longer, especially in case of perishable products. So what has happened now is once an invoice is generated, the other state borders, the state borders will immediately receive a copy of an electronic invoice, which is approved. So they’re aware what product is moving from which, which, where is it originating from, and what is the end destination. And if all the duties is with respect to that product are paid, what is the vehicle carrying it, so it’s seamless, so the state borders don’t really need to stall, first of the truck, or the consignment and physically check anything. Once all the duties are paid, it’s it’s a seamless process where, obviously, the government still do random checks to see, you know, if everything’s okay. But, but this is help save a lot of time, a lot of costs in terms of, you know, ensuring products reach one place to the other in a timely manner. As part of the initiative, what the government is also done is at every state border, every vehicle has to pay sort of tax in terms of a toll, you know, so So what the government is now done is they’ve they’ve come up with with an E pass or E toll where if you have an electronic tag with you, you can just walk through or go through the the tool and it will electronically deduct money from your form from your account. So you don’t really need to stall, stop the chart, pay cash, the lines, the queues go, the coalescer. All these measures, you know, across ministries, government is working with railways, with road authorities, highway authorities, port authorities, they’re trying to build the infrastructure, trying to create roads in areas where the infrastructure is poor. So all the ministries are working in tandem to ensure that you know, all of these sort of minor issues or sort of independent individual issues get resolved.


Fred Rocafort  34:48 

On the topic of transportation, again, from one of the, the panels, in which you participated. I learned about how there’s a Surely foreign investment taking place, I guess considerable foreign investment in things like like roads and rail systems. Is this the case?  Could you tell us a bit more about?


Jayesh Kothari  35:15 

Yes, yes, it is, it is it is. So what, what what the government is earlier, all of these sort of sectors would were extremely sort of close sectors where government had control over these sectors. So, for example, if 15 years ago, if a road project had to be built, it was only a government, government contractor, or a government company who could build that road. Again, that really caused delays in government trying to implement funds for those projects. So what the government sort of did over the last 10 years is so expand and introduced public private partnership. So, so special purpose vehicles will be formed between government companies and private players who are experts who bring in technology in road development, or rail network development or for development. And that has really assured and opened up sort of foreign investment for these public private partnerships. Earlier these sectors was, like I said, we’re restricted to only government companies, and it depended only on the government investment, but once, but now, because it is open to a public private partnership, suddenly, a lot of domestic companies in India or companies outside India, look at this as as a viable option. Infrastructure companies globally, look at this as a viable option, not only for technology, but also for the manufacturing process.


Fred Rocafort  36:51 

So looking, I want to talk a little bit about about geography and not in the traditional sense, although I’m a geography nerd. But there’s, I think one of the great things about having the opportunity to have conversations like this as being able to put more color, if you will, into a map, you know, you have the basic map, you know, you look at it, and you get this the capital of this country, maybe, you know, a couple of major cities. And then of course, the things that you have no choice but to pick up from, from the news, right? If you’re a very, very us consumer, for example, it’s hard to get I mean, it would be very difficult not to have heard of Bangalore, right, for example. I mean, we’re Yeah, there’s talk of starting flights from Seattle, where our firm is based to Bangalore, right, because of this tech connection. So we will heard of that. But, but I was hoping you could you could help give us a little bit more more context. When we when we I mean, I think this is true of any country. That’s an economic powerhouse, its economic activity is not evenly distributed. This is certainly not the case in China, certainly not the case in the US, you’re going to be encountering very different economic climates. If you’re in a place like Seattle, or if you’re in some other states, right. So I’d like to hear more about the hotspots in India, right? Where, where are the places where realistically, if a company wanted to go there, let’s say to manufacturer, where are the places where they’d be looking at. But of course, that’s not the only thing that they might be doing. Right? So for example, if you if you had a company that wanted to perhaps look at the consumer market there, where would they be looking at setting up headquarters, I mean, my own my own guess, based on my on my very, very limited knowledge and say, well, you go to delegate go to Mumbai, but maybe, maybe there’s something here that we’re, we’re missing so. So, yeah, if you could help give some more nuance to that map of India, that would be great.


Jayesh Kothari  39:00 

So yeah, again, this is again, this is one of the important sort of important items in every foreign investors investment making decision for India, I would I would actually place this into buckets, where we have preferred destinations and we have upcoming destinations. So in terms of preferred destinations, preferred destinations and destinations where historically foreign investment has assured has come in the sort of regional development in and around that area has fairly happened in in a way where it is conducive to see foreign investment. It’s it has got a sound sort of expert system or you know, welcoming systems in terms of the culture, development, schools, colleges, etc. You know, places for recreation. So in terms of preferred destinations Maharashtra which is the state well, where I am from Mumbai happens to be the capital Maharashtra and is is number one followed by Delhi, Karnataka, Tamil Nadu and Gujarat. So, these are the five sort of destinations which are preferred destinations which have significant amount of foreign investment as of today, but there are some preferred destinations you know that that are coming up which are tier two cities you know and for example Odessa for example, you know Haryana Rajasthan So, there are other states which are not surely not really there in terms of the sheer volume with the preferred states but are upcoming and are the state governors there are taking measures to provide subsidies to provide several sort of incentives to foreign investors to come and set up operations there. For example, Honda has moved its manufacturing base to Rajasthan which is again, not a tier one state but it’s a tier two state i would say unionize, move their operations to headquarters to Delhi, Haryana you know, so, so, a lot of this depends on you know, the overall objective of how many years does a foreign what is the overall objective of a foreign companies? Are you coming in with a short term objective? Or are you coming into the long term objective? How many people would you want to start in India? Are you are you going to rely on local or domestic talent or are you going to bring your people for example, Japanese clients prefer having their own people come in and then staying physically in the country, but Western countries like Europe and US prefer to take domestic hire domestic talent and manage things remotely versus having them having people physically present here. So, it depends on the overall ethos or the serve objective of a foreign investor, but he has a preferred destinations continue to receive a large amounts of foreign investment due to, you know, established networks established infrastructure, and and the overall sort of, sort of scenario or situation with the conducive environment, if I will.


Fred Rocafort  42:31 

And in terms of navigating this this very diverse cultural landscape, where you have, of course, you know, areas where I mean, it’s not just the fact that they speak different languages, it’s the fact that that in some cases, right, these languages are very vibrant, and, and give rise to, to their own industries, right. For example, I’m thinking of film, right, for example, where the film industry and in a particular state in a language that might not be that well known outside of India can perhaps be in the top 10 globally, right, in terms of its size. So for foreign companies that are looking at, at operations encompassing large parts of India are having a presence in multiple states, what are some some pointers that you might give to them in terms of how to how to navigate this? Is it? I’m thinking in practical terms? I mean, this is their value, for example, in in from the beginning, setting out to, to the extent possible, perhaps staff from different parts of the country to help help navigate the differences. What are some other things that companies can do to do to ease this, this transition? Especially I’m thinking, for example, some of the countries in Europe are relatively small, relatively homogeneous, and all of a sudden for for a company coming in from one of these countries going into India might be the equivalent, I mean, depending on how many places there they’re present them could have the equivalent of doing business in five or 10 or more European countries. So So, what are what are some some best practices to help make this less daunting?


Jayesh Kothari  44:19 

So again, I think you go back to the drawing board and what we ask the clients is what is your wish list? You know, give us your wish list in terms of what is it that you want? Are you going to get your people here, see in terms of the preferred destinations that I said earlier, the preferred destinations, luckily have a good amount of talent locally available. So if a foreign investor was to set up operations in one of the preferred destinations, getting local talent would not be a problem. Having said that, you know, if local if foreign investor would want to get their own resources from their country to India, the advantage that these people destinations have is the socio economic development and setup that they already have, you know, most of these preferred destinations English is a well accepted language. There are there are, there is a good housing community expat community like I said, socio social and cultural development has happened. There are good recreation facilities, good network of schools, schools and colleges available, healthcare facilities have been fairly developed in these sectors. So again, it depends a lot on the wish list, if the wish list is getting subsidies and trying to manufacture products at the lowest cost is the number one objective, then our our advice to the foreign customers, let’s look at a state where you get the most out of subsidies. But if that’s not highest on your criteria, if you want a balanced sort of setup, you might be better off looking at a existing or a preferred destination, versus a tier two destination where, you know, getting in and out will be easier. Getting people locally would be easier. Even if people have to come from abroad, it’s easier, more welcoming to stay. Having said that, I think most of these, most of the countries are the states where foreign companies are operating today, English remains a well accepted language. The culture of India is fairly similar to other countries in Asia, it’s in the climate is a sort of, it’s a balanced climate, we don’t have harsh weather, unlike other geographies, you know, so in terms of the other challenges in terms of weather in terms of, we have abundant rainfall, sort of barring few areas, locations in India, there’s a good amount of water supply in India. So those issues, electricity, which used to be a huge challenge earlier now is almost non it’s a non challenge. Now, you know, you have those issues around power supply, etc, had been resolved to a large extent, in most parts of the country. So I think increasingly, what foreign countries are moving towards, is a balanced approach. And, and where they will be able to sort of cohabitate with the local population for larger for a long, long time. So again, it depends, like I said, on what your wish list is, you know, but most, most clients that we advise, prefer the preferred destination, you know, for the reasons I said.


Fred Rocafort  47:33 

Well, Jayesh, it’s, it’s, clearly we’re not we’re not going to, to put a cover everything that there is to cover when it comes to India. As a matter of fact, I mean, this is an ongoing conversation. And I’m looking forward next week to come moderating a panel with with some of your colleagues, just like, Jonathan, who couldn’t be here with us today. moderated a panel in which you participated not long ago. So I think this is, and I like the fact that it’s an ongoing conversation, because every time I’m learning, I’m learning new things, and just just acquiring a level of depth in terms of my knowledge that that, that I appreciate, hopefully, before, before too long, you know, we can start traveling internationally and I can only get to India, which I wish I hadn’t done. before we let you go, I’d like to ask you for for your recommendations. For for our viewers today, we since we are we are doing video, so doesn’t have to be India related or old, which certainly can be. What are some things that you’ve read recently? I know, as you’ve mentioned, the, you know, the life of a corporate lawyer is not one that obviously a lot of time for, for for recreational activities. But what are some things that you’ve managed to get your hands on and are in recent times?


Jayesh Kothari  49:03 

Yeah, so you’re right. I mean, time is always a challenge. But, you know, it’s important to to sort of have some sort of deflections or interests outside your area of work, to kind of it helps you kind of come back fresh, rejuvenates you and also kind of provides you sort of an escape from what you’re doing. Obviously, I’ve not been doing too much reading offline. But I think one book that I mentioned to you last time also is something that I read in the reading is by Shiv Khera which is called You Can Win. Again, it’s it’s not not a heavy book. It’s a very light read. It just gives you a basic. It just basically says that if you are able to build processes in your life, you know, you can basically achieve every task. It just gives you sort of a roadmap of you know how you should approach life how you should sort of approach your personal life professional life, you know, set yourself goals, you know, basically, this helps you sort of live a more balanced life sort of gives you sort of direction. The other the other book that I’ve been reading, because I enjoy sort of public markets, stock markets, is Coffee Can Investing, because lawyers when they’re very good with sort of closing deals for other people, I think, with respect to their investment decisions, it’s so they always kind of leave it to sort of some external consultants or advisors, or to manage their money and loss, sort of, if I may use the word there, they’re always lazy with managing their own money. So Coffee Can Investing is a book by a veteran Indian fund manager called Saurabh Mukherjea. And basically, the book revolves around these picked up six or seven Indian companies, basically how they started operations and how they’ve been able to sort of scale up with 30-40 years in India, and grow managed to grow sustainably. And he takes he walks sort of their readers through the journey of how it is important to sort of invest in some of these companies at an early stage to get the upside benefit if you ride the wave. So it’s a very interesting book where he actually takes us through the story of, of each and every company, how they actually started operations to now where they are, most of them are now become multinational companies. So it’s an interesting read, I think it’s something that is important for you and an entrepreneur, just gives us a vision, to where where you start and where you can eventually end. That’s, that’s, that’s on the reading front, I think in terms of, I try and get some time on weekends to catch up on a sport, I enjoy Formula One, especially so I try and sort of follow that regularly. And cricket, obviously, in India, everyone loves cricket. So those are the two things that you know, at least sort of stress musters or areas outside work that you so look forward.


Fred Rocafort  52:21 

It’s, I know this is self serving, but I do think it’s important to to make the time right to catch up on sports, obviously, a you know, I can’t devote the the amount of time I did and the when I was younger, right? Yes to watching games, but but at least, you know, one thing that I’ve been that I’ve been doing, I’d started actually, it was actually the pandemic that made this feasible. But I mean, I’ve always I’ve always liked especially European football, or soccer for Americans. And during the pandemic I started well, I sort of, because of the fact that I was working from home, and then the fact that I was in a in a more convenient time zone for watching these games, as opposed to being in in Asia, I actually started to my I’m a supporter of Barcelona, that’s my, that’s my team. But I was able to follow them a lot more closely than than I did before, in terms of actually watching the games in terms of actually, and, and it’s interesting, because what I ended up doing is just focusing on that, and not really watching other other games. But I think in the back in the day, I would, it would be a different mix. Like I would watch some of the more important games and then I would watch some of the other big games involving other teams. I kind of switch that into a more regular routine of just trying to find the time to watch the Barcelona games once or twice a week. And it’s it’s a really, I know, some people might say, Well, yeah, of course this is why people people do this, but it does have that therapeutic effect that it is I said, Oh, yeah, I was enjoying it on a different level than I did in the past.


Jayesh Kothari  54:11 

I think it gets you thinking right away it gets you thinking it gets you you you sort of look at it with a different diversity maybe 10 years earlier, you would just see it as Oh yeah, it’s a sport. Now you would look at it from a strategy point of view from from from, you know, the skill level of skill. So So it depends on I think it’s always good to sort of get get sort of that that time to yourself, for your for your well being at work. It’s a it’s very important I think, you know, now we’re in an era where you know, well being mental well being is become very important. And it’s important that you do these activities outside work to keep your mind healthy.


Fred Rocafort  54:51 

Absolutely and before we sign off, I just like to add my own recommendation. This is a this is in the air related. It’s it’s An article called the Internet Country and this was on a Sub Stack called TigerFeathers! One word, exclamation point at the end, we’ll be providing you with with a link on our on our blog posts when we when we publish this, this episode, and it was written by REM on veer and roll sanghi that’s my best attempt at pronunciation. But it was very interesting read and very, very not just timely because of this conversation that we’re having but it’s very timely I think I really think it’s high time people start paying attention to India obviously there’s still things happening elsewhere and you should pay attention to those two but but I do think the time has come to start going a little bit deeper into into India and understanding that that country better I think it’ll be I’m convinced that it’ll be time well spent for someone professional at any stage of their career right i think it’s it’s going to be a constant I think over the next over the foreseeable future. With that jayesh I’d like to thank you for for making time for us I know it’s late in in Mumbai. So So I appreciate especially especially since we’re doing video right you have to you have to be more or less personable, you’ve done a good job at it, I sort of I forced myself to put on the suit and grow myself. But But really, thank you, thank you so much. And I look forward to talking to your colleagues next week. So thanks for your parts and making that that happen.


Jayesh Kothari  56:47 

Thanks Thanks for Thanks for having me. And I hope we can do this more often. And just wanted to conclude I think, like like you, like you summed up, India has become a hotspot or a good investment decision. And, you know, we look forward to working with you and your colleagues to to make good collaborations in future.


Jonathan Bench  57:12 

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