The Indian economy is outperforming expectations. Having reeled under the devastating effects of two separate Covid-19 waves which hit the country, not many were very hopeful of a rapid bounce back by the economy. Yet, pragmatic and consecutive steps taken by the Modi government since 2014 have turned the Indian economy extremely resilient, which is why the path to recovery has become much easier. Such is the mood regarding the Indian economy, that senior executives who occupied important positions at well-known multinational companies are turning themselves to Indian companies because the environment and growth opportunities offered by desi companies are much more motivating than MNCs.
Indian Executives Ditching MNCs for Desi Companies
According to the Economic Times, an exodus of top talent from multinational corporations to domestic companies are witnessing dozens of high calibre CEOs and CXOs, making the move since 2020. There are many reasons why such executives are moving to Indian companies, the most promising of which include extensive capital expenditure plans, rise in private equity and merger and acquisition (M&A) deals, a booming stock market, newness of many of the expansion projects, and increased decision-making power.
Indian firms have seen the addition of big names to their ranks, and these are all people who left their jobs at major MNCs. For example, Sudhir Sitapati, who was earlier with Hindustan Unilever has joined Godrej Consumer Products Ltd as managing director and CEO. Narendra Agarwal jumped from Unilver and Capgemini to become the global CIO of Dabur. Shali Raghavan shifted from L’Oréal and HUL to become the global chief marketing officer of Nykaa. There are many more executives who have dumped multinational companies to work for well-established Indian firms.
Why are Indian Executives Leaving MNCs?
At Indian companies, these senior executives, who left their lucrative jobs at MNCs are being made a part of the decision-making process. Indian companies also seem to be providing much better growth opportunities for such executives. With MNCs, India-based executives do not become a part of the decision-making process, as that is something that happens at the company’s headquarters which is not in India. However, in desi firms, these executives become a part of the top echelons which runs the company.
Furthermore, Indian companies are expanding around the world. So, they are MNCs in their own right, and soon enough, will be competing with the biggest of brands around the world. At such a time, Indian executives want to be a part of their country’s companies. They seek to contribute to India’s business growth around the world.
R Suresh, founder of executive search firm Insist said, “Leading Indian corporations have global expansion plans through M&A (mergers and acquisitions), strategic partnerships and organic growth.”
The Health of the Indian Economy
Despite the UN Conference on Trade and Development report stating that global FDI flows plunged by 35 per cent due to COVID, FDI in India increased by 27 per cent to USD 64 billion in 2020 from USD 51 billion in 2019. Reforms have been at the core of Modi’s government strategy to keep the Indian economy in a healthy state as it claes new heights. Most recently, the Modi government took a big business-friendly decision as it scrapped the retrospective tax regime.
The Indian equity markets have now emerged as the best-performing among global peers on a year-on-year (YoY) and year-to-date (YTD) basis on the back of robust retail and institutional participation and better-earning prospects. The return correlation between India and global equities has declined to 61 per cent from over 80 per cent a few months ago. This means that the Indian markets are increasingly growing independent of their foreign peers. Now, crests or troughs in foreign markets will have a lesser impact on Indian stocks.
According to a report by the Economic Times, the number of new companies incorporated under the companies’ law rose 26 per cent to over 1.55 lakh in 2020-21 as compared to the previous year. A Rubix Data Sciences report stated that 1,55,377 new companies were registered in India during FY2020-21 compared with 1,22,721 in FY2019-20, recording a 26 per cent increase. It also noted how the momentum in new company registration has continued in FY2021-22 despite the second wave of Covid-19.
India’s gross domestic product (GDP) grew at a record pace of 20.1 per cent in the first quarter of FY22 — the highest-ever GDP growth in a single quarter. Thereafter, the GST collection numbers released on Wednesday for August showed a 30 per cent increase from the same month the previous year and, crossed the $1 trillion mark for the second consecutive month. Business activity in India, meanwhile, is booming.
The Indian economy’s performance in the face of adversity is pushing senior executives from major MNCs to turn their eyes towards Indian companies in a bid that would help them secure their fortunes, while also making them a part of India’s campaign to go global with its businesses.