Q: What is it that foreign investors don’t understand about India?
Vijayaraghavan: When I talk to investors when they come to India — I probably meet five or six of them a month — they don’t understand the challenges related to scale. In India we don’t have a separate Department of Energy. There’s a separate Ministry of Power. Oil is a separate department, Coal is separate, Petroleum and Natural Gas is separate, and then you have a Ministry of New and Renewable Energy, which is separate from the Ministry of Power. Though the Ministry of Renewable Energy is in charge of renewable energy, the moment the energy is generated, everything else gets handled by the Ministry of Power.
Further, in India, power is what is called a “concurrent subject.” What that means is that there are federal regulations, and each state has its own interpretation of those regulations. So what might work in one state might not be able to be replicated in another state, even from a fundamental business-model perspective. The laws are different, the mandates are different, the grids are so different, the fees and the surcharges are different, the policies are different, and this is something that investors don’t spend enough time understanding while analyzing the business models.