Prime Minister Narendra Modi’s “Make in India” chant could not have come to the United Kingdom at a better time. Never before has India held investors’ interest as it does today. With a charismatic ambassador, strong international alliances, promising economic prospects, and large skilled young population, India should be set for major economic development.
The UK was geared to dazzle. Cameron pulled out all the stops and the Indian diaspora’s huge expectations of Modi were displayed everywhere. London’s iconic landmarks, such as London Bridge, the London Eye, Wembley Stadium, and the Arch, were bathed in the Indian tricolor. Modi got thunderous applause at all his stops – Parliament, Guildhall, the India-UK CEO Forum, and others. While some in India felt that Modi might be facing a mutiny, this was not evident during his three days in London, barring the small protests over a number of issues, including claims of religious and social intolerance, and interference in Nepal.
At Wembley Stadium, it was ‘Modimania’. Over 60,000 people turned out in their finery to be entertained by the cultural display performed by many UK artists of Indian origin. British prime minister David Cameron and his wife - dressed in a sari – were among those invited.
So what is the secret of Narendra Modi who, on a cold and grey November evening in a foreign country, brings out 60,000 people to celebrate him? Many schoolchildren participated in the event, and were later seen in dialogue with the two prime ministers. For these children, I imagine, the ‘Modivation’ must have been an exciting experience.
Wembley provided the largest, loudest and most vibrant welcome that Modi has seen outside India. While the home football team was battling mighty Spain in Alicante, superstar Modi was charming the Indian diaspora and celebrating their contribution to the British economy. In my twenty years as an avid fan of English football, watching most home games at the Wembley arena, even during the most emotional championships, I have never felt the sort of hero worship that I saw on this occasion directed at Narendra Modi.
Giant rangolis were saving the pitch so that England could play France a few days later. Cameron commented that this must be the biggest diaspora gathering he ever addressed. In his speech, he celebrated and acknowledged the invaluable contribution that the 1.5 million British Indians in different walks of life have made to the UK.
British Indians today are a vital part of the UK, from policing to teaching, and from entrepreneurs to service providers. Cameron even ventured so far as to predict that it may not be too long before an Indian-origin prime minister gets elected in the UK.
Modi’s speech was interrupted with loud cheers and applause many times. The loudest cheer was for his announcement of a direct flight between London and Ahmedabad. He also announced a move to simplify problems with regard to the OCI (Overseas Citizen of India) process, including the launch of the Madat platform.
Modi’s was a mesmerizing act of oratory flair. After speaking in English for a few minutes, he made an impromptu switch to Hindi. He spoke at length on foreign direct investment (FDI), and reminded his audience of his definition of FDI – First Develop India. This cannot be questioned as a reasonable demand, he said. He spoke about the fast emerging Masala Bond – the first of which is getting completed for the Indian Railways.
Modi outlined his big plans for solar development in India to create a capacity of 175 GW. While both PMs were criticizing the growing terror risk in the world, and recalling the attacks in London and Mumbai, the most heinous coordinated attacks on civilians were being carried out in Paris. The tragedy in Paris, however, did not really impact Modi’s visit.
At the heart of a big foreign visit is trade. India is now the fastest-growing large economy in the world, and Cameron has made it clear that he would like UK businesses to get a large piece of that pie. He has made three visits to India since he became prime minister in 2010. The UK and India have a long-standing relationship. Taking this into account, along with the massive fanfare surrounding Modi’s visit, the £9 billion worth of new deals struck between British and Indian companies now seem to fall short of expectations.
In the meantime, the senior teams of the Department of Industrial Policy and Promotion and Invest India were busy meeting investors encouraging FDI. This important work will continue even after Modi’s return to India. Today, over 110,000 people are employed by Indian companies in the UK, with the Tata Group alone accounting for 65,000.
Both prime ministers appreciated the Tatas’ significant contribution to British manufacturing. Modi visited the Jaguar Land Rover factory to recognise this contribution. Nearly 700,000 people are employed by UK companies in India. Vodafone announced an investment of Rs 13,000 crore, cementing its position as the largest investor in India. Europe’s largest solar company, Lightsource, announced plans to invest in India. The UK announced plans to assist the development of three smart cities in India, and to help promote Digital India and Skills India.
Modi’s high-profile and widely covered visit is likely to give momentum to British interest that had in wait-and-watch mode. One hopes that India’s prime minister convinced many UK businesses to move ahead with their plans for India.
Having personally led a few mega FDI projects in India, I believe I know where the pathway to success for the government may lie. FDI needs a favourable policy and regulatory environment. Investors need speedy clearances for efficient project implementation. In the new norm of the global economy, investor appetites, priorities and balance sheets change rapidly. And strong government patronage can make all the difference for FDI, especially for mega projects.
While the majority of emerging countries face an uphill battle from China to Brazil, India provides a ray of hope for foreign investors. On the eve of Modi’s UK visit, the government of India announced that nearly 15 sectors were being opened to FDI, including defence, finance, and insurance. And that is a good start.
The author, Sudhir Maheshwari, is managing partner of Synergy Capital Corp LLP, and former Group Management Board member of ArcelorMittal (This story was published in BW | Businessworld Issue Dated 30-11-2015)
Guest Author
The author is managing partner of Synergy Capital Corp LLP, and former Group Management Board member of ArcelorMittal
