Sun Microsystems Co-Founder: “India the best place to invest in right now”
Sept. 6 – During a Nasscom discussion on startups, Silicon Valley venture capitalist Vinod Khosla has stated that “India is the best place in the world to invest in.” Khosla is of the view that India should be viewed through the prism of the long-term investor rather than simply paying attention to the recent negative news coming out of the country.
Khosla, the co-founder of Sun Microsystems and the current head of Khosla Ventures, said that India will be very successful over a five to ten year timeline. He sees the healthcare, education and infrastructure sectors in the country as “great for funding and will see a lot of entrepreneurial activity.”
Khosla has described India as the best location for long-term investment. He continued, “I will not go to Japan, China or Europe, but countries like India, Brazil and Malaysia. Among these, India scores due to its large population and the need for solutions that will be relevant for millions — not only here but elsewhere.”
While from a short-term point of view there may be reasons to not invest in India, this ignores the fact that in three years the governance issues will be much better than they are currently.
“Corruption, bureaucracy, infrastructure problems are there in all emerging economies,” Khosla said. “The best way to tackle corruption is to take the human interface out of the system. A combination of Aadhaar (a 12 digit individual identification number issued by the Unique Identification Authority of India on behalf of the Government of India) and e-governance will be great for the people.”
Nasscom’s plan is to fund around 10,000 startups in India. While this number may seem large, Khosla explains that “you need only 10 great startups to propel the venture and startup ecosystem in India.”
In addition, it is very important to help India create local solutions. Khosla uses the example of the healthcare industry and the opportunities that it provides for startups.
“I believe we don’t need 80% of the doctors; technologies will take over many of the tasks,” he said.
India has a lot of space for startup incubator programs to develop. The quality of the mentors is very important, however. Companies, such as those providing information technology services, have found a high level of success in China.
Chris Devonshire-Ellis, Managing Partner of Dezan Shira & Associates’ India Operations, echoes Khosla’s views.
“When I began in mainland China over 20 years ago people were saying discouraging things about investing there – yet look what happened. India has many of the same demographic fundamentals, a young and energetic workforce, low costs, and a latent and wealthy consumer middle class. India is different to China in many ways, but as a long term bet, as Mr. Khosla says, India is the market to be looking at right now.”
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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