British Investment In India Declines Sharply
British investment in India has declined sharply despite a number of visits by high-powered business delegations. Available figures indicate that investment in India has gone down despite considerable increase in investment in many other countries.
British investment has risen dramatically in the US and in several European and Asian countries. British industry invested just under $8 billion in the US in 1994, which doubled to more than $16 billion in 1995. Investment in the US has traditionally been higher than in any Asian country, but investment in China rose from $1.3 billion to $2.2 billion over these two years. Investment in India in the corresponding period fell from $136 million to $45 million. Investment in China in 1995 was almost 50 times that in India.
British investment in India had risen to its 1994 level from a fraction of that level in the preceding years. But even then, it has been in the realm of peanuts, as an Indian manager closely associated with the Indo-British Partnership put it.
Promoters of the Indo-British Partnership speak of percentage increases up to 1994, but do not mention the collapse later. Bureaucrats also omit the fact that percentage increases earlier were minor.
Claims of dramatic improvement only in terms of percentage increases over two or three years must be taken with more than a pinch of salt, an official said.
Indian officials attributed the slowdown in investment to political uncertainties. But British industry invested close to a billion dollars in Hong Kong in 1995 despite prevailing political uncertainty. This was 20 times that of the investment in India.
To some extent British investment has been moving away from much of Asia. Few Asian countries figure any more among the top ten destinations for British overseas investment. Besides Hong Kong and Singapore, China and Malaysia are the only two other Asian countries, excluding Japan, with considerable British investment.
British investment is now focusing on the West. The top ten investment destinations in 1995 were the US ($16 billion), the Netherlands ($5 billion), Australia ($3.2 billion), Germany ($2.4 billion), France ($2 billion), the Irish Republic ($1.3 billion), Hong Kong ($1 billion), Sweden ($1 billion), Spain ($1 billion) and Brazil ($820 million).
The British department of trade and industry that backs the Indo-British Partnership also backs similar groups working with several other countries. Many of these other groups such as the China-Britain Trade Group have been far more successful.
The China group provides members speedy access to market research, free use of its staff in its China offices in Beijing, Shanghai, Guangzhou, Wuhan and Chengdu for upto five days, members workshops, facilities to hire local staff, a monthly China-Britain trade review and a free list of members offering professional services to companies operating in China.
The efforts to push investment in India have not moved too many British industrialists. Officials working to promote the Indo-British Partnership are trying to invite British investment yet again this year through events that mark the 50th anniversary of Indian independence.
The royal yacht Britannia will dock again in Mumbai and then Chennai later in the year. The royal yacht was the venue for announcements of about $2 billion when it sailed to Mumbai in 1993. Investment figures later showed that hardly any of those announcements materialised into actual investment. But officials expect more agreements to be signed on board the Britannia this year.