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May 26, 2000
The Rediff Business Special/Shobha Warrier
The return of the East India Company!British companies find the hospitality and the warmth of welcome in South India particularly conducive to doing business." Sir Rob Young, the British High Commissioner, made this observation to India, during his address at the 164th annual general meeting of the Madras Chamber of Commerce and Industry, MCCI.
The Indo-British Trade Partnership started in 1993, with the prime ministers of India and Britain signing a two-way trade and investment agreement. Now the total trade in goods and services between the two countries runs over 4 billion pounds. After the US, the UK is India's largest trading partner with its share in the market at 6 per cent.
However, it is not the US but the UK that is the largest cumulative foreign investor in India. In the last seven years, more than 1,000 joint ventures have been approved between British and Indian companies. Of these, 80 joint ventures are with the companies in Tamil Nadu alone! The projects in Tamil Nadu include CDC, Cairn Energy, national power, PowerGen, United Utilities, Weir Pumps, etc.
Predictably, several Indo-UK automotive component joint ventures are in Tamil Nadu and they supply components to OEM vehicle companies like Brakes India, Wheels India, Lucas TVS, India Pistons, etc.
Last month, Stahl India Private Limited, part of Avecia Specialties, UK inaugurated its Rs 234-million, 12-acre site near Madras.
More recently, on the 25th of May, the UK-based Lifenet EMS (Emergency Medical Services) International has been awarded a major contract to establish an ambulance training facility at the Sri Ramachandra Medical College and Research Institute in Madras. Under the contract, Lifenet will help SRM College achieve UK accreditation of ambulance and paramedic training facilities through the Institute of Health Care Development, UK.
In addition to this project, Lifenet EMS International has chosen Hyderabad as the first city in India to develop an Emergency Medical Service System, which will be a non-profit organisation formed by representatives of existing Indian private, public and voluntary healthcare providers.
The new service will ensure that the nearest available ambulance is dispatched quickly to victims of accidents or sudden illness and patients will be taken to the nearest hospital.
Over the last few months, several officials including the UK's Deputy Prime Minister John Prescott, Secretary of State for Trade and Industry Stephen Byers, and Foreign Secretary Robin Cook visited India. Stephen Byers set an ambitious new target for the two-way trade in goods and services of 5 billion pounds.
The new measures taken by him include the establishment of an Indo-British Partnership Business Council involving 10 major global companies like Rolls Royce, British Gas, British Airways, PowerGen, and HCSBC. Other initiatives include giving rupee-nominated credit loans to India through the UK Export Credit Guarantee Department, or ECGD, and the launch of 'Enterprise Initiative: India'.
Enterprise Initiative: India is aimed at attracting smaller and medium-sized companies to sell to India or form joint ventures, technology input or other partnerships. The ambitious target is to create 200 new such partnerships in two years. Enterprise Initiative aims at providing a tailored match-making service for each company so that it can avoid spending years exploring the market, and get it right the first time.
The states chosen for Enterprise Initiative are Tamil Nadu and Andhra Pradesh!
Even though Sir Rob Young called for India and the UK to come together to meet global challenges and international competition, he sounded dissatisfied because some of the mega power projects failed to materialsie.
He explained that the UK power projects were not in India to make a quick buck, but to explore a long-term relationship. He, however, confessed that the "experiences so far had been disappointing. If you can't guarantee revenue stream, nobody will come here. You can't criticise them for wanting guarantees. Foreign companies will seek guarantees like escrow account because Indian power distribution network does not measure up to commercial viable propositions."
He, nevertheless, said that the British companies are interested in investing in Indian firms like the Indian Airlines. Information Technology is one sector where the UK is looking for new initiatives.
"Titled 'Get Connected', our intention is to promote innovative and mutually beneficial Indo-British IT partnerships that will contribute significantly to knowledge-driven growth in both the UK and India, and allow us both to compete effectively in the global marketplace.
India has an abundance of talented and experienced people in application development and Britain has a well-established tradition of research and innovation in design in academics and industry. Together, we have the tools, technology, experience and imagination to become global market leaders," said Young.
Water and wastewater management is one area where India can have collaboration with the British companies. The idea becomes all the more important at a time when India is facing acute water shortage in several states. Through privatisation, Britain has successfully managed its water resources well, and it also claim that the cost of water has come down and customers get regular supply of 'good' water.
On the other hand, India's most serious environmental health problems are related to water. Rivers and water reservoirs are polluted and groundwater levels are falling alarmingly every year. In many parts of the country, water tables over broad areas in India have gone down by more than 10 metres, according to Marcus Moench, senior staff scientist at the Natural Institute in San Francisco.
The State of India Environment report says that rain water collected by low-cost traditional methods in just 5 per cent of the country's land area can meet most of India's farm and family water needs.
"Theoretically speaking, there is no village in India which cannot meet its drinking and cooking water needs through rain water harvesting. Clean drinking and cooking water for all the people in India can be collected over an area half the size of the Indian capital!"
In December, when a team of water experts headed by Alan Davis, director of UK's department of environment, was in Madras, it stressed the need to "commercialise water supply in the domestic sector to improve the quality of service to consumers in India."
The High Commissioner advised India "not to be afraid of foreign direct investment. If you have confidence in your ability, capacity skill, entrepreneur skill, why should you be afraid?" Point.
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