With Brexit topping the headlines and the prospect of a need to find new export partners looming, one answer is to look to our historic colonial relationships. You might be surprised to discover how much we have in common with India after all these years…
Your scribe is a little bemused that China has drawn a lot of favourable economic and business sentiment vis-à-vis India over the past two decades or so. A bit odd really. About 250 million Indians speak English as an alternate or second language; Indian commercial law closely follows English law, brands such as Leyland, Typhoo, Royal Enfield are still huge in India, and they play a mean brand of cricket. You will feel right at home there.
So, I’ll try over the coming period to entice you to do business with India.
As a starter for ten, can I encourage you to get hold of a book edited by entrepreneur and communications strategist Manoj Ladwa, and called Winning Partnership: India-UK Relations Beyond Brexit? It came out on June 26 in hardback form, but is also available on Kindle. Take it with you on your trip to India. I quote here from the Amazon description. “Winning Partnership is a collection of essays on what a modern India-UK Partnership could mean.
The book comes at a critical juncture in global affairs. India and its engagement with the world is being transformed under the leadership of Prime Minister Narendra Modi, whilst the United Kingdom, one of the most prosperous nations in the world, is going through tumultuous change following its epic decision to leave the European Union.
The eminent writers draw on their vast experiences, exploring the challenges and opportunities that lie ahead.
The essays cover a wide range of subjects including politics and diplomacy, economics and business, strategic affairs and defence, through to culture and soft-power, and engaging the UK’s significant Indian diaspora., Winning Partnership will help inform the debate on the future nature and direction of one of the deepest relationships in world diplomacy.”
India has historically been a big economic power. It started off when The Indus Valley Civilisation was around (3300–1300 BCE), when trade obviously drove the economy, and this was hugely aided by transport gains. (India could use a lot of that now). By 300 BCE, most of the Indian subcontinent, which includes present day India, Pakistan and Bangladesh, had been united. This stability encouraged enhanced trade and commerce in a common economic system, with increased agricultural productivity. I shall point out later that the existing agricultural status in India offers an incredible opportunity for UK agrieducation. India is estimated to have had the largest economy, and been the wealthiest economy of the known world during the next 1700 years, ending with the 16th century CE and from the 1st century CE and owned between one third and one fourth of the world’s wealth, the most of any country for a large part of the last two thousand years, until the Mughal empire arrived, from whence it moved into decline as a result of European influences.
After the Indian 1991 economic crisis, then Finance Minister Manmohan Singh initiated economic liberalisation and India has turned towards a more capitalist system and become one of the fastest growing large economies of the world.
I shall return to some historical comments in future blogs, but let’s come up to date:
India’s economy continues to grow above 7% with several India states expanding at over 10%, there are compelling reasons why India should prominently figure in every business’ strategy and the potential rewards are significant. However, there are nuances that companies looking at India need to be aware of. The Indian market requires thorough preparation and a long-term view.
“…by some measures, India’s GDP has already overtaken that of the UK“
India’s economy continues to grow above 7% with several India states expanding at over 10%, and according to the World Bank is the fastest growing economy in the world. India’s GDP is around US$2.2 trillion whilst the UK’s is US$2.9 trillion, although by some measures, India’s GDP has already overtaken that of the UK. for the first time in over 100 years, now standing as the world’s sixth-largest economy by GDP after the United States, China, Japan, Germany, and France. The milestone is a symbol of India’s rapid economic growth and, conversely, the U.K.’s post-Brexit slump. UK has about 3% of India’s trade versus about 70% at the time of independence in 1947. India’s GDP growth at 7.2 per cent in 2017-18 on account of reforms, domestic consumption, and improvement in trade, but the World Bank has also noted that there were signs of a slowdown in early part of last fiscal period, but a favourable monsoon lifted the economy before being temporarily hit due to demonetization. India’s economy will get a big boost from its approach to Global Sales Tax which will reduce the cost of doing business for firms, reduce logistics costs of moving goods across states, while ensuring no loss in equity.
India is the third-largest start-up hub in the world with over 3,100 technology start-ups in 2014–15.
The UK has a great tertiary academic structure, (not so bright on vocational but I’ll touch on that in a later blog), and one of the big opportunities for the UK is in Indian tertiary education. For instance, the government of India has a strategy known as the Skill India Mission and will refund the moneys spent by businesses from a central fund targeted exclusively on vocational training. (sound familiar?) The central fund will be created either from taxation or from a mandated corporate social responsibility (CSR) impost levied on the company. The government will contribute matching payments to the fund. This scheme would be applicable to any registered public or private enterprise employing at least 10 people. Skill India Mission targets training 500 million youngsters by 2022. A market of 500 million over five years. Anyone interested?
Another area of upskilling is the India Smart City Mission. The London School of Economics & Political Science (LSE) has stated that Indian smart cities will probably become beacons for Indian metros as well as other cities around the world. The open national competitive framework to distribute funding to local governments used in the Smart Cities Challenge was considered to be the most novel aspect of the programme.
I know automotive is not a big player in the Southwest, but nationally, of course Tata owns JLR and in India most passenger vehicle manufacturers reported a healthy growth in sales in May 2017 indicating improved consumer sentiments. Maruti Suzuki India, the country’s largest car manufacturer, reported a 15.5 per cent growth in its domestic sales to 130,248 units in May 2017. Domestic sales of Ford India increased by 16.6 per cent, while sales of Honda Cars India reported a 13.3 per cent growth. Both Mahindra & Mahindra (M&M) and Hyundai Motor India reported a marginal growth in passenger vehicle sales of 3.3 per cent and 1.6 per cent, respectively. Toyota Kirloskar Motors domestic sales declined by 13.5 per cent.
The agricultural sector is the largest employer in India’s economy but contributes to a declining share of its GDP (17% in 2013–14). However, this is still a big market, and the Southwest has plenty of skills to sell to India. Tertiary agricultural education in India is good, but there is a huge knowledge gap in the middle and basic sectors. There is a US$13 billion loss annually in post-harvest loss. It is possible we have the know-how to help.
In the near future India could well move into the top three economies in the world.
India and the UK have a close relationship going back to the time of the first Queen Elizabeth, when, in 1612 Ambassador Sir Thomas Roe presented his credentials to Emperor Jehangir. Today, the Indian parliament is closely modelled on Westminster and Indian Brits are to be found integrated in all strata of UK life. Literally millions of Indians fought alongside Britain in the two major World Wars of the 20th Century. We must be “The Winning Partnership”, as Manoj Ladwa has said. Curry is now an authentic British cuisine. In 2001, the then British Foreign Secretary, Robin Cook, said that “ Chicken Tikka Massala is now a true British national dish, not only because it is the most popular, but because it is a perfect illustration of the way Britain absorbs and adapts external influences. Chicken Tikka is an Indian dish. The Massala sauce was added to satisfy the desire of British people to have their meat served in gravy.”
It is time, fellow citizens of the Southwest, that we lend a shoulder to the Indian drive into third spot in the world economic league. Sign up for the trip!
Sources. Wikipedia. MCCIA. IMA Asia.