Only 6-month extension for Invest India CEO as key decisions under scrutiny

On July 19, 2023, seven days after Intel India chief Nivruti Rai was appointed Managing Director and CEO of Invest India, the Commerce and Industry Ministry praised her in a press statement for her “illustrious 29 years at Intel as a global business and technology leader” and for having received “the prestigious Nari Shakti Puraskar”. She was given a three-year tenure.

Amid scrutiny by auditors, internal committees and senior officials of the Commerce and Industry (C&I) Ministry, Rai has received a “short-term interim extension of six months” until January 2027, sources in the government said. She continues to be the MD and CEO of Invest India until then.

Invest India is a not-for-profit company, set up under public-private partnership in 2009, and is overseen by the Department for Promotion of Industry and Internal Trade under the C&I Ministry.

Rai came under scrutiny primarily for awarding a Rs 14.16-crore consultancy contract to global firm AT Kearney without documented approval, and submitting invoices for remuneration with tax deducted as applicable to a consultant rather than an employee.

When contacted by The Indian Express, Rai dismissed the allegations, saying the consultancy contract had proper approval, attributing the tax issue to errors in process. She said her pay revision had been approved “in principle” in 2023 itself.

Rai did not, however, respond to questions about her second term. The DPIIT did not respond to requests for comment, either.

According to sources in Invest India, Rai did not attend office for 10 days until the interim extension came through on July 20, joining work a day later. She was appointed to helm Invest India three years earlier, after her predecessor Deepak Bagla stepped down following a critical audit of his tenure by the Commerce Ministry.

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Contract before approval

During Rai’s first term, a key point of contention was the award of a four-month contract to AT Kearney for organisational restructuring.

Records show Invest India’s Board was informed in April 2024 that the DPIIT’s Financial Oversight Committee (FOC) had approved a proposal for hiring AT Kearney on October 11, 2023. But the minutes of that FOC meeting do not record any approval; instead, they show the committee raised concerns over the proposed restructuring exercise and sought clarifications on its necessity, feasibility and scope.

Rai said: “ATK was hired following all processes and with the required approvals by FOC on November 14, 2023, through email and duly signed by competent authority.” Invest India’s emailed response to the FOC’s queries, however, makes no mention of such an “approval”.

Significantly, the FOC chairperson in this case, an Additional Secretary in the Commerce Ministry, later examined Invest India’s proposal to extend Kearney’s engagement by six months for Rs 26 crore plus taxes. The official’s August 2024 report questioned the necessity of the extension, the absence of clearly measurable deliverables, and the unjustifiable cost estimates.

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The report also noted that “no information was provided (by Invest India) regarding the approval of the competent authority” for hiring AT Kearney “on nomination basis” in the first place.

Rai confirmed that the “ATK Phase 2 approval” was rejected, but said she could not recall the Ministry’s observation on the absence of approval for the first round of hiring. “The system in place escalates to me only when needed,” she said.

Invest India records also show AT Kearney was selected solely on the basis of subjective technical evaluation criteria. The selection followed a “special limited tender”, approved by Rai in October 2023, that invited only three vendors under a Tier-II empanelment whose contract rates had already been withdrawn by Invest India in November 2022.

CEO taxed as consultant

In December 2024, more than a year after her appointment, an independent auditor’s report flagged that Rai was drawing remuneration with tax deductions as applicable to a consultant rather than an employee. The report asked Invest India management “to rectify it in financial statements and comply with the related taxation” liabilities.

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To this, the Board clarified that “upon recognizing this discrepancy, the management has taken corrective action promptly to ensure full compliance with the relevant regulations”, reclassifying Rai as an employee.

Rai said: “I paid any outstanding taxes along with the applicable interest, while Invest India paid the penalties for their errors.”

Records show Rai submitted vouchers to withdraw salary as a consultant at least until October 2024. “I followed what was told to me during that period. I do not recall the details of how it was done,” she said.