NEW DELHI: The responsibilities that Commerce Ministry had delegated to Invest India, were delegated to a US-based private entity by Invest India, with the expenses borne by the government exchequer.
“Invest India”, one of the verticals of the Ministry of Commerce, Government of India spent more than Rs 14 crore on a project spread across four months, employing a US-based consulting company to revamp itself and seek US investment into India.
In December 2023, “Invest India” released a tender for the selection of an agency for “knowledge support for organization redesign and strategy formulation.”
The broad objective behind this step was to realign internal system, procedures, policies, competencies of various verticals of Invest India, identify the focus and non-focus areas and redefine the working approach towards the same.
The said tender, after following the due process in a transparent and systematic manner, was awarded to a US-based management agency, Kearney.
“Invest India” is a non-profit private company limited by shares formed in 2009. Its shareholders include the Department for Promotion of Industry & Internal Trade, Union Ministry of Commerce and Industry, which holds 36% of the shares; 26 State Governments collectively hold 13% (0.05% each); and the remaining 51% is held by three industry associations—each holding 17%—namely the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce & Industry (FICCI), and the National Association of Software and Service Companies (NASSCOM).
It is a specialized entity whose employees, numbering 400 with multiple offices, are mandated to work on ways to execute policies and planning to bring foreign investment into India and make the process easier.
It is pertinent to mention that Invest India was brought into existence in 2009 to fulfil what the Commerce Ministry was not able to achieve—that of facilitating foreign investment in India.
As the tender document shows, in the recent case, the responsibilities that Commerce Ministry had delegated to Invest India, the same responsibilities were delegated to a US-based private entity, with the expenses borne by the government exchequer.
A perusal of the filings made before relevant offices in the US shows that Kearney provided management consulting advice to Invest India and in September and October 2023, Kearney personnel assisted Invest India on an unpaid, business development basis, with making connections with a variety of private sector interests, including within the United States.
Using its existing contacts and networks within and outside of the firm, Kearney personnel arranged introductions and meetings in support of Invest India’s efforts to develop relationships in the US business community.
As per the filings, between 20 September 2023 and 2 October 2023, Kearney personnel facilitated and attended meetings between Invest India and private sector individuals and company representatives in the United States. These meetings included companies and individuals in the technology, finance, manufacturing, semiconductor, and pharmaceutical sectors.
As per the filings, Kearney has deputed a company official who will lead Invest India’s activities in America, including educating American corporations on the opportunities to use India as one of their strategic geographic bases.
On 2 February, after multiple stages of evaluation of the companies that had applied, AT Kearney Consulting was chosen among the three bidders. Kearney is an American global management consulting firm with offices in more than 40 countries worldwide, headquartered in Chicago, Illinois. According to official documents, prior to February 2024, when the tender was allotted to the said company, Invest India provided management consulting services to Invest India through its CEO and Managing Director, Nivruti Rai, on a business development basis without a written agreement.
As per the documents, Invest India spent $23,209 on food, hotel, and travel expenses paid to Kearney from 20 September 2023 to 30 April 2024.
Whether this amount and expense are included in the RFP is not mentioned. Similarly, the US-based company received $388,262.36 on 5 August as consulting fees for registrable and non-registrable activities.
As per the work order dated 14 February, which Kearney received, the project is to be completed in a period of 4 months (comprising of 2 phases—Phase 1 and Phase 2, which shall run parallel to each other) from the commencement date (15th February 2024), for which Invest India will pay Rs14,16,00,000 (Fourteen Crore and Sixteen Lakh rupees—Rs7,08,00,000 for each phase). The Sunday Guardian reached out to Invest India to understand the output achieved under this project handled by Kearney.
According to the documents, the output was to be in the field of bringing US investments to India and making changes within Invest India. The concerned official told The Sunday Guardian that a response would be shared, but none was received by the time this report went to press.