India should take advantage of US-China trade issues, says top wealth advisor Raj Sharma

M Somasekhar Hyderabad | Updated on February 11, 2020

Raj Sharma, a wealth advisor with Merrill Lynch

While India’s democratic credentials and high mobile literacy are positives, ease of doing business needs to improve quickly, says Merrill Lynch executive

The ongoing trade war between US and China offers a unique opportunity for India to attract investments from the US, says Raj Sharma, a top Wealth Advisor with Merrill Lynch.

Most US companies don’t want to depend too much on China due to several reasons, of which, the important one being their Intellectual Property Regime (IPR). They are going to Vietnam and the Philippines now. Given its democratic strengths, India has to stake a bigger claim of the opportunities available, says Sharma.

Head of the Boston, Massachusetts-based Sharma Group (a boutique within Merrill Lynch’s private banking and investment group), which manages a portfolio of $8 billion in client assets, the India born Raj Sharma, is ranked a creditable 21st on the Barron’s list of financial advisors.

On a visit to his home town Hyderabad, where he did his management degree and had a stint as a disc jockey in AIR, before moving to Massachusetts in 1981, Raj thinks India is moving in the right direction on reforms, though more needs to be done and at a faster pace. “Freeing up capital, clearing up the banking mess and labour reforms are key,” he avers.

Though there are occasional hiccups, the high mobile literacy (mobile penetration and use), aspirational culture, especially among the rising young population, and the democratic processes continue to be key factors for US investors to place India among their favoured markets along with China and Brazil.

Ease of doing business

In an interaction with BusinessLine, Sharma says India has to be really competitive, transparent, accountable and responsive in its legal systems to attract greater investments in the future. The ‘ease of doing business’ has to improve quickly as there are many competing nations emerging to attract global investors.

Asked about the capital market scenario in India, Sharma feels the future of the market is good. “Always look at long term, say 10 years, you will see VCs, PEs and entrepreneurs rise."

On the rise of India born CEOs in the US corporate world, Sharma says: “Government should trust its people and entrepreneurs, then only business will prosper. How come 100 Indian entrepreneurs put in the US do well? Why can’t we replicate the same conditions in India. It’s an important question to be answered.”

For example, Google has created over 5,000 millionaires in the Silicon Valley in less than two decades. It was started by Russian immigrant Sergey Brin and Larry Page. Similarly, several Indian-origin entrepreneurs are able to create wealth and enterprises in the US, he added.

On start-ups and entrepreneurship finding funds, Raj thinks women entrepreneurs should get greater attention in India. Micro loans to help women start small businesses should be made available more easily. Social capital and VC funding should also back these ventures. This will lead to a more balanced growth in agriculture and rural-based India and , thereby, help reduce inequities that are bound to grow with rising wealth creation.

American India Foundation

Raj Sharma is in India as part of the American India Foundation (AIF), which was launched in 2001 post the Bhuj earthquake in Gujarat, had the backing of former US President Bill Clinton and then Prime Minister Atal Bihari Vajpayee. About 100 influential and wealthy Indian-Americans got together to launch a $10 million fund to help and rehabilitate the earthquake victims.

Over the years the funds of over $100 million have been raised and the scope of the involvement with India has extended into education, public health, entrepreneurship and digital equality. About 16,000 schools in different States receive various kinds assistance from AIF with active interventions by Indian entities.

The Nobel Prize winners in Economics for 2019, Abhijit Banerjee and Esther Duflo, did part of their empirical studies on the projects of AIF in India, says Sharma.

Published on February 10, 2020

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