How chancellor woos India

 
Hague and Osborne

I am currently running on two hours sleep and a mild vegetable curry I had for breakfast in my hotel.

So I feel considerably less full of vroom than the tractors and cars made by the Mumbai plant of the Mahindra Group, where I have been traipsing behind the chancellor as he tours the factory floor, in the atmospheric conditions of a Turkish bath.

For George Osborne, it's hours of beaming over gear boxes and transmission systems, as if they were beautiful newborn babies.

Welcome to the grounding reality of winning foreign direct investment for the UK.

Not mega

Mahindra represents an interesting case study of how to persuade overseas companies to place their bets on Britain.

Start Quote

Mr Cameron and his Chancellor will need to do a good deal more cooing over Mahindra's babies, to win its big money”

End Quote

Today it announced a £20m UK investment in electric-car research and development for Formula 1 vehicles.

OK, so not exactly megabucks. But Mahindra's automotive president, Dr Pawan Goenka, told me that the point was to develop technology that could be used for ultra-low-emission mass-market cars - and that would be a big deal.

Dr Goenka also gave me an insight into how hard it is to secure only £20m: it required the British Prime Minister David Cameron to have a private meeting with him.

Also it turned into a reality, thanks to subsequent spadework by Oliver Letwin, the cabinet office minister.

Investment

As I implied, £20m is hardly going to transform either the UK or Mahindra.

But Mr Letwin told me he sees it as the proverbial mackerel-catching sprat.

What did he mean?

Well Dr Goenka told me Mahindra would within six months decide on a much more substantial £100m research investment.

He said UK government subsidies would be helpful, if Mahindra goes ahead.

But the bigger prize would be mass-market production of electric cars.

I asked Dr Goenka how likely it was that Mahindra would become a big manufacturer in the UK, and not just an exploiter of valuable UK technology.

All he would say is that his company was minded to do something in Europe... one day.

Hmmm.

Mr Cameron and his chancellor will need to do a good deal more cooing over Mahindra's babies, to win its big money.

Which may say something about where the real power lies, in a globalised economy that allows multinationals like Mahindra to invest their precious job-creating cash more or less wherever they choose.

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    -1

    Comment number 247.

    Britain started appeasing the wrong kind of Indians since 1947- in form of auctioning (British) university degrees, scholarship & granting permanent residency/citizenship.

    Talented & able Indians with any sense of self-respect hardly stay there. UK can never attract right kind of Indians (or any non-white person frm its former colonies) unless it accepts (NOT mere tolerate) racial diversity.

  • rate this
    0

    Comment number 246.

    Brian @242
    "anything
    to get a deal signed"

    In the vein of, "Once you can fake sincerity…"

    You echo Nick Clegg in his dismissal of 'ever closer union' - along with Heaven on Earth - as 'flim-flam', and so risk undoing all George's good work… "just spin and flattery".

    Can we agree multi-tasking, for George and ourselves? Political affinity, social instability & Typhoons, all have trade relevance.

  • rate this
    0

    Comment number 245.

    I never imagined that condition of Britain, the urgency to attract Indian investment/businessmen, will be so dire that we would see the statue of Mahatma Gandhi in front of British Parliament- http://www.bbc.com/news/uk-politics-28207833

    And Brit politicians FOOLISHLY think that Indians like Goenka, Modi, Birla, Mittal, Ambanis etc (NOT Tata though) can help developing Brit society & economy!

  • rate this
    0

    Comment number 244.

    Jay @241
    "try to attract
    NOT the spoiled"

    Spoiled or not, by intent or in effect, few with reason & care beyond rescue 'for humanity'. In team-building, especially urgent or critical, perhaps better one 'honest injun' than twenty with bald commendation as 'talented'. Little Britain will one day be amongst those blessed by Mighty India, and vice-versa, in terms of vocation not monetary advantage.

  • rate this
    0

    Comment number 243.

    Perhaps Mr Osborne should start addressing India's woeful and criminal treatment of women before he starts climbing into bed with big business. Do we really want to condone India's treatment of women, and the terribly damaging caste system that perpetuates it, by pretending it's not happening?

  • rate this
    0

    Comment number 242.

    AfA; it's just spin and flattery. It has nothing to do with democracy; it's a trade mission.

    They're trying to increase UK exports to India (and lure some more DFI) and would truly LOVE to sell £12bn worth of Typhoons by gazzumping the Rafael deal.

    These two would say anything to get a deal signed.

  • rate this
    +1

    Comment number 241.

    Britain rather should try to attract TALENTED Indians (and others)- NOT the spoiled brats of the "brown Sahibs", the cronies of foreign invaders (both Brit and Muslims, who inherited power as the Brit left India), the rich & powerful but highly corrupt socio-economic "elites" whom we mainly see in Oxbridge type Brit Univs & HSBC type organizations.

    'Wealth' should be created, NOT 'attracted'.

  • rate this
    0

    Comment number 240.

    Brian@239
    "not about
    democracy"

    See Robert's next: "How Gandhi became George Osborne's hero"

    George Osborne said fitting that "the father of the world's largest democracy should take his place in front of the mother of parliaments". At least not 'mother of democratic parliaments'; but as seen in Iraq & Arab Spring, now underlined in Afghanistan, trade without equal partnership a dangerous sham.

  • rate this
    0

    Comment number 239.

    It’s not about democracy and it’s not about the arrival of New World Harmony if we all just beg the Blue Fairy hard enough.

    It’s a simple trade mission/. http://uk.reuters.com/article/2014/07/08/uk-india-britain-idUKKBN0FD1D320140708

  • rate this
    0

    Comment number 238.

    Brian @237
    "a simple
    business story"

    As gleaned by the late Rosencrantz & Guildenstern?

    Robert might be on auto-pilot, so too George Osborne; but not you Brian, surely not? There is nothing 'simple' about praise for self and flattery for others as to 'democracy', its meaning degraded if not in the minds of our leaders certainly in the minds of the benighted. Democracy, without equal partnership?

  • rate this
    0

    Comment number 237.

    It's a simple business story, AfA.

    Hague and Osborne are wooing Indian trade and investment just like representatives of every other government.

  • rate this
    0

    Comment number 236.

    Brian@235
    "perfectly sensible
    trade mission to me"

    Good to have the fruits of your research on this (power generation, telecoms, etc): but did you notice the main item-for-sale (for consumption at home as much as in India and beyond), the market apparently insatiable for sham democracy (not so benign a product as the infant's 'pacifier': no milk, some quiet, then crack-down to 'save' from chaos)?

  • rate this
    0

    Comment number 235.

    Sounds like a perfectly sensible trade mission to me.

    In 2010, UK/India bilateral trade was worth around £13.8 billion; up from £4.5 in 2004.
    UK exports to India feature power generating equipment, telecoms equipment, transport equipment and industrial machinery.

    http://www.iptu.co.uk/content/india_economy.asp

  • rate this
    +1

    Comment number 234.

    Whilst others waste time with labels & smoke, the UK will need to work together with bigger countries with bigger resources to survive.

    We have some of the best consultants in the business, but globalisation means we can't afford to be arrogant in thinking we can 'HOS' in capitalists market which dictates our way

    Better infrastructure & true nationwide focus is needed to stand a chance in future

  • rate this
    -2

    Comment number 233.

    229. It is trade with the rest of the world – along with economic reform, improved property rights, better institutional structures & removal of barriers to business - which will raise standard of living in India & improve life chances of its 1bn popn. This is to be encouraged; not bemoaned by facile self-interested whinging about how unfair it all is.

  • rate this
    0

    Comment number 232.

    Indian Manufacturing industry wishes to obtain the recent
    scientific technology research data to use for mass production in India.
    No reason whatsoever for India to manufacture in the UK when
    work is needed by millions in their own country. The product hey may be
    interested in purchasing is training and education in the UK for this purpose.
    would be interested in is

  • rate this
    0

    Comment number 231.

    The BBC has a clear agenda and motives regarding the articles on which it allows HYS. I would suggest it's racism.

  • rate this
    +2

    Comment number 230.

    WHY ARE WE NOT BEING ASKED TO COMMENT ON THE RECENT CHILD ABUSE CLIAMS?

  • rate this
    +1

    Comment number 229.

    @228 now I'm a liar as I couldn't stop myself rising to the bait. I'm here to make you better!

    Re: Hague. A handful of politicians do not justify the whole, conversely the same in my own conjecture.

    (This is called empathy).

    As for 'Ahh they have money & you don't'

    Who says I don't?

    Perhaps I'm a humanitarian who believes in the greater good than putting emphasis on material trinkets?
    #seeyou

  • rate this
    -2

    Comment number 228.

    225. Sums up your narrow, predictably banal and trite world view with perfection.

    Hague went to site schools; he never got near to gong to Eton. His dad was a small town businessman.

    "What difficulty is like in the UK"

    Listening to bores like you.
    "They're rich, pass on heritage"

    Ahh they have money & you don't. I see.

 

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