In the Global Competitiveness Index released last week, India climbed 16 places to a rank of 39. This improvement comes at a time when a lot of emphasis is being accorded to improving the ease of doing business in the country, to attract more investment. On the eve of the India Economic Summit 2016, two executives from global law firm Baker & McKenzie speak about why India is one of the leading destinations for investment in Asia. Ashok Lalwani, a capital markets expert and head of the firm’s India practice, and Mini vandePol, chair of the global compliance and investigations group at Baker & McKenzie, tell Mint how India has steadily improved its standing as an emerging investment and innovation hub. Edited excerpts:

Is there a reason for the Indian markets to be doing better?

Lalwani: (Narendra) Modi’s government has put in a variety of policies that enhance Indian businesses. In the background, the bureaucracy is working better. It’s less difficult to do business here. If you look at the degree of ease of doing business here, the rankings are going up steadily. There’s much more confidence in terms of getting things done. There has been a very steady and sustainable increase. Look at the growth rates, currency has stabilized, there is a lot of pent-up demand and people have to do deals and we’re seeing the right sort of movements.

vandePol: The new GST (goods and services tax) is a game-changer. That has been one of the biggest issues for global companies doing business in India—the ability to move their goods between states. I think this is going to make a big difference. From a compliance, anti-bribery, competition perspective, Modi has actually not done as much as people would have liked, but what he has done is very positive. Being able to self-attest, it seems like such a small thing, but in fact it has reduced so much of that intersection between small-level bureaucracy and people just wanting things done.

What challenges does India face in cross-border initial public offerings (IPOs)?

Lalwani: For Indian companies there is a tax issue—whether or not overseas sale of assets or other depositors receipts will result in a tax in India. That question is still not settled. That makes it a bit more difficult. But overall, I think there will be a lot of Indian companies going overseas in the healthcare, health tech and e-commerce sectors.

vandePol: Indian companies will need to raise their standards and compliance. You’ve got the Foreign Corrupt Practices Act in the US and the UK Bribery Act in the UK. If you’re going to go list yourself in the US, then you’re going to put yourself squarely in that jurisdiction. A lot of Indian companies need to ready themselves because companies don’t put as much investment or attention to those issues as we haven’t got the same amount of enforcement of the Prevention of Corruption Act in India. But when they are in the overseas market, they’ll need to. China is way ahead of India in relation to enforcement of anti-corruption and unfair competition laws.

What factors affect cross-border merger and acquisition (M&A) decisions?

Lalwani: Cross-border M&A depends on what you want to achieve, what portfolio one wants to have, what markets one wants to reach out to. There is a fair amount of comfort in going overseas to get technology or to reach new markets. Learning from previous deals to know what did or did not make sense. Also look at opportunities at home.

India has become a hub of start-ups. Will they end up a bubble, or take India to new levels of growth?

Lalwani: Indians are extremely innovative and their work in India and outside is fantastic. Indians have great minds, education, and entrepreneurial spirit. Given the right resources, India will thrive.

India has jumped 10 points on the settling disputes aspect under the global competitiveness rankings. Given the issues with the adjudication authorities, why is that?

vandePol: What has happened is people are paying closer attention to dispute resolution within their contractual documents and they are using forums like arbitration and alternate dispute resolution. We haven’t seen a dramatic improvement in the court system and a lot more can be done there. But I think arbitration and international arbitration, not just domestic arbitration, is certainly becoming the choice of dispute resolution for global companies engaging with Indian companies and between Indian companies (as well).

How can India become a more competitive and attractive business destination?

Lalwani: Ease of doing business, transparency, certainty (of laws). If I want to come to India, I want to know what I need to do, how long will it take. This way, I’ll know how to conduct my business, what will be my costs, time required to set up.

vandePol: India has a very diverse group of people who can contribute to business. India needs to market that even more to attract more business. India has more women involved in business/companies.

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