In the fiscal year 2011-2012 (first quarter), India’s economy (GDP) grew by 7.7%, down from 9.3% in the same period the previous year - marginally more than forecast. It was the weakest rate of growth in six quarters. Commenting on the figures, India’s Finance Minister said that the first quarter figures, “were disappointing.”
Despite the slowdown, India, one of the high-growth BRIC (Brazil, Russia, India and China) countries, expects their “middle classes to increase their household expenditure fourfold over the next twenty years.” As such investment in India remains a key target for UK exporters and investors, particularly Small and Medium Enterprises (SMEs).
The UK-India business relationship has been steadily upgraded since the Strategic Partnership of 2004. The visit of Prime Minister David Cameron, together with a large delegation, in July 2010, saw the relationship elevated to Enhanced Partnership for the Future status.
Exporting to India
Currently India is one of the UK’s Top Trading Partners (number 11, July 2011) with year-to-date Export General Trade values of £3,095 (millions). The UK is also the fourth largest inward investor after Mauritius, Singapore and the United States. Conversely, the UK is India’s second most favoured investment destination in Europe after the Netherlands.
UK India Business Council Encourages Investment in India
The UK India Business Council is a business led organisation, with members drawn from companies large and small and covering all sectors. Backed by the UK Trade and Investment (UKTI), UKIBC exists to ensure “that the business voice is heard by governments of both countries.” It has recently introduced the Online Sector Service, a tailor-made package for British SMEs. The sectors covered are:
- Advanced Engineering
- Infrastructure
- Retail Supply Chain Logistics
- Digital innovation
- Life Sciences & Healthcare
- Skills and Education.
The Online Sector Service provides, for those SMEs registered, a range of benefits, which include:
- Frequent news updates on the UKIBC website
- A quarterly report on each sector, which include market trends and case studies
- Free access to UKIBC events
- Access to UKTI’s business forum for UK and Indian companies.
Considering some of the encouraging data, it’s unsurprising that an SME delegation will visit Mumbai, New Delhi and Chandigarth in October 2011. Organised by the UK India Business Council, it will be led by leading industrialist Lord Digby Jones.
Confederation of Indian Industry’s Global Summit on MSMEs
During the visit Digby Jones is a guest speaker at the Confederation of Indian Industry’s Global Summit on Micro, Small and Medium Enterprises (MSME). The other members of the delegation will take part in the “global innovation” activities and will have one-to-one meetings with India’s senior industry and service representatives, government officials and major financial institutions.
Putting aside the special relationships, historical links and some of the more upbeat economic forecasting, the Indian government has much to do to facilitate the UK's investment in India. In the World Bank’s Ease of Doing Business index, the country is ranked a lowly 134, only one place above the West Bank and Gaza, out of 183 economies examined.
The World Bank rankings are calculated using a number of indicators, which include:
- Starting a Business
- Dealing with Construction Permits
- Registering Property
- Getting Credit
- Protecting Investors
- Paying Taxes
- Trading Across Borders
- Enforcing contracts
- Closing a Business.
Apart from Protecting Investors and Getting Credit, which ranked 44 and 32, all others were poorly rated.
Perhaps the final word to Lord Stephen Green, UK Minister for Trade and Investment, who said, “UK India partnership is about strategic partnership and not just buying and selling transaction.”
Sources:
UKTI, Discovering high growth: How SMEs are breaking into high-growth markets, site accessed 18 September 2011
UK India Business Council, UKIBC Delegation: Mumbai, New Delhi and Chandigarth, site accessed 18 September 2011
Confederation of Indian Industry, India Global Summit on MSMEs 2001, site accessed 18 September 2011
Confederation of Indian Industry, Building Business Leadership – UK, site accessed 18 September 2011
World Bank, Doing Business: economy rankings, site accessed 18 September 2011
