What is Cameron offering India?

July 30, 2010

- Mark Kobayashi-Hillary is the author of several books, including ‘Who Moved my Job?’ and ‘Global Services: Moving to a Level Playing Field’.  The opinions expressed are his own. -

Prime Minister David Cameron has loaded a 747 full of British business leaders and government ministers, all on a charm offensive aimed at securing deeper trade ties between the two nations. But what is he offering the Indians?

The Prime Minister is appealing to the ‘special relationship’, the centuries-old tie of the British Empire and Commonwealth. It’s true that many links remain. The Indian accounting, legal, and parliamentary systems all maintain similarities to the British systems, because the British were instrumental in creating these institutions.

But for how long will the old ties bind us? When will the empire strike back?

Many supposedly British brands are actually owned by Indian firms. Jaguar Land Rover cars, the steel manufacturer Corus, the Tetley tea you may have enjoyed over breakfast this morning. India is already a pervasive part of British life, and not just in the form of chicken vindaloo on a Friday night.

India was relatively untroubled by the global economic slowdown. Instead of hyper-growth, the economy grew at a gentler rate, but there is the difference. Their economy is still growing, and now at an accelerating rate. India is one of the famed BRIC nations, the bloc of Brazil, Russia, India, and China lumped together because of their fast-growing economies and huge populations.

And size does matter. There are 1.1bn people in India, and the labour force is approaching half a billion. The potential for more Indian companies to work with the UK is enormous, as is the market opportunity for British firms that can find a way to take their goods and services to the Indian people.

The British retailer Tesco has spent five years building up a store support facility in Bangalore, now supporting their stores all over the world from India, and there is no doubt where Tesco bank will be operating from once it rolls out across our own high streets. But Tesco has spent years creating jobs for people in India and taking the long view that if they ever want to roll out a network of stores over there, allowing the Indian middle class to sample the delights of Tesco Finest, then they need to build a deep relationship with legislators and business leaders in the region first.

But despite the opportunities, there are the complexities too. Any visitor to India cannot fail to notice the slums, often propped up against the gleaming offices of multinational companies. Over forty per cent of the population lives below the poverty line, which in that part of the world means about $1.25 a day.

The last British government acknowledged the need to develop closer links to India, and other fast-growing nations. There was even a parliamentary group launched to something of a fanfare in February 2009, aimed at giving a kind of ‘favoured trading nation’ status to India. The intention appeared to be to create better long-term relations, by commissioning government projects from Indian service companies.

These good intentions died quietly as the British public remains wary of seeing taxpayer-funded projects creating jobs in far-flung locations. Will David Cameron manage to square the circle of asking Indian companies to create more jobs in the UK, yet legislating for immigration caps, making it harder for Indians to come and work in the UK? Even the thousands of Indian students coming to British universities are going to find life harder as the new government places further restrictions on their working hours in a bid to weed out bogus students.

It’s going to be a real challenge to convince the Indian people that their old master is now a great place to do business when so many other nations are welcoming their expertise.


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