Insight India | Issue 2 by Global Opportunity

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FOREWORD INDIA, THE BRIGHT SPOT IN THE GLOBAL ECONOMY Dear Reader, I’m pleased to welcome you to the second edition of Insight India magazine. The Modi Government reached two years in office on 26 May 2016, and this issue will look back on how BJP-led reforms have impacted the Indian economy and ease of doing business. It may appear at first glance that not much progress has been made in terms of reform. But positive data shows that the NDA Government agenda is having an effect. We highlight key economic and business stats in our infographic on page eight. The infographic shows that India has jumped 12 places in the World Bank’s ‘Ease of Doing Business’ rankings. At the same time inflation has decreased by 3.48 per cent and Foreign Direct Investment in India has soared from $24.3bn to $40bn, an increase of 64.6 per cent. Other notable stats include an 80.8 million rise in the number of smartphone users, jumping from 123.3 million in 2014, to 204.1 million this year.

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There is little doubt that the Government’s policy stance on infrastructure, ease of doing business, fiscal rectitude, inflation control, reducing subsidies and encouraging ‘cooperative – competitive federalism’ has helped consolidate India’s position as the ‘bright spot’ in the global economy. For a more in-depth examination of the administration’s reform turn to our feature on page 18. The UK India Business Council believes that the current situation in India is positive with GDP projected to expand 7.6 per cent in this fiscal year, according to the Government of India. We hope that government reforms such as Goods and Service Tax (GST), Land and Labour reform are enacted quickly and, together with initiatives such as ‘Smart Cities’ and ‘Make in India’, truly fulfill India’s economic potential. Indeed, in Japan recently, the Indian Finance Minister, Arun Jaitley, told an audience that the Indian economy will more than double to $5trn in a matter of years as the Government steps on its reform agenda to accelerate growth. Finally, I examine the recent state elections and what the results mean for India’s national politics and business climate on page six. And eyes are already turning ‘IT MAY APPEAR towards the next big AT FIRST state election, GLANCE THAT scheduled for early NOT MUCH 2017, in India’s PROGRESS HAS largest state, Uttar BEEN MADE IN TERMS OF Pradesh, which has REFORM. BUT POSITIVE DATA 31 representatives SHOWS THAT THE INDIA in the Rajya Sabha. GOVERNMENT AGENDA IS The BJP swept the HAVING AN EFFECT.’ state in the 2014 national elections, and it will be interesting to see how it performs next year. The result in Uttar Pradesh is likely to be read as the clearest omen as to the probable result of the national election in 2019. I hope you enjoy this issue.

Richard Heald OBE Group CEO UK India Business Council

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CONTENTS ISSUE 02

03 FOREWORD

Richard Heald OBE, Group Chief Executive, UK India Business Council

06 COMMENT How UK business schools can engage with India Kevin McCole, COO, UK India Business Council

INSIGHT INDIA is the UK India Business Councilâ&#x20AC;&#x2122;s flagship publication, which highlights business opportunities between both countries, predicts trends, profiles success stories, offers tips and practical advice, and carries in-depth interviews and analysis with business leaders and policy makers. Published every six months, the magazine is aimed at business people interested in bilateral trade opportunities between India and the UK.

MISSION STATEMENT

We believe passionately that the UK-India business partnership creates jobs and growth in both countries, and that UK businesses have ideas, technology, services and products that can succeed in India. The fact that the UK is the No 1 investor in India reinforces this. Through our insights, networks, policy advocacy, services and facilities, we support UK businesses to achieve this success.

Editor Sarah Cartledge sarah@inspirepublishing.co.uk Features Writer Jack Ball jack@inspirepublishing.co.uk Art Editor Nadia Nelson nadia@inspirepublishing.co.uk Creative Director Oscar Bowring oscar@inspirepublishing.co.uk Sales Director Karen Frieze karen@inspirepublishing.co.uk Managing Director Steve Gardner steve@inspirepublishing.co.uk Accounts Nicola McKelvey nicola@inspirepublishing.co.uk UK India Business Council Jessica McGreal Jessica.McGreal@ukibc.com Printed in the UK by The Magazine Printing Company, using only paper from FSC/PEFC suppliers. www.magprint.co.uk

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Richard Heald OBE, Group Chief Executive, UK India Business Council

07 UKIBC NEWS ROUND UP 08 INFOGRAPHIC

Looking back on 2 years of Modi government

10 COMMENT The Modi Government: Two years on

Ayena Gupta, Research and Policy Manager, UK India Business Council

12 FINANCE, LEGAL & PROFESSIONAL India on the move

James Cliffe, Head of Business Banking, HSBC

18 FINANCE, LEGAL & PROFESSIONAL Reforms in India: The unfinished agenda Professor Arpita Mukherjee, ICRIER

20 VIEWPOINT Return on investment

Dr Didar Singh, Secretary General, FICCI

For magazine enquiries please contact comms@ukibc.com UK India Business Council HEAD OFFICE 12th Floor, Millbank Tower 21-24 Millbank London SW1P 4QP United Kingdom

24 DIGITAL INNOVATION Scoring an equaliser for a future business Matt Preschern, Executive Vice President and CMO, HCL Technologies

Published by Inspire Publishing 23 Grafton Street London W1S 4EY T: 020 7824 1927

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06 COMMENT Thoughts on the state elections

24 DIGITAL

INNOVATION

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EDITORIAL

UK AND INDIA: A WINNING TEAM

INFRASTRUCTURE

28 INDUSTRY PROFILE Commercial beacon in the heart of the UK

David Shepherd, Director of Trade and Investment, Leeds City Region Enterprise Partnership

32 INTERVIEW Driving force

Nara Chandrababu Naidu, Chief Minister of Andhra Pradesh

34 INFRASTRUCTURE Amaravati: A vision for a truly 21st century city India’s latest pioneering Smart City development

40 HEALTHCARE Standardising care in India

It is my pleasure to welcome you to the second edition of Insight India, the UK India Business Council’s exclusive guide to business opportunities between the UK and India. Prime Minister Modi’s vision for a 21st century India is certainly ambitious. Two years on from his historic election, we examine the effects of his Government’s various national investment ‘INDIA IS ALSO programmes, which EXPERIENCING are beginning to RECORD facilitate doing NUMBERS OF business in India. RETURNING The UK and India DIASPORA, A TANGIBLE are, in the words of INDICATION OF THE Prime Minster Modi, COUNTRY’S IMPROVING an ‘unbeatable SITUATION AS ITS ECONOMY combination’. And CONTINUES TO DIVERSIFY.’ examples of partnerships and innovation between both countries are increasingly apparent. Matt Preschern, Executive Vice President and CMO of Indian IT giant HCL Technologies, discusses the company’s global partnership with Manchester United as they transform the club’s digital experience for their 659 million global followers. India is also experiencing record numbers of returning diaspora, a tangible indication of the country’s improving situation as its economy continues to diversify. Secretary General of FICCI, Dr Didar Singh, explores this recent phenomenon along with India’s role in a globalised world as its vast human capital propels its own domestic and international development goals. So do use the stories and expertise in this latest edition of Insight India to scope out your next Indian opportunity.

Dr Pramod Prabhakaran, Central and Northwest London NHS Foundation Trust

42 INFOGRAPHIC India: A country overview

Sarah Cartledge Editor, Insight India

44 FINANCE, LEGAL & PROFESSIONAL Analysing India’s Investment Treaties: Implications for investments Rupa Chanda and Dr Pralok Gupta

48 INTERVIEW The UK and India – an unbeatable team Lord Bilimoria, founder of Cobra Beer

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How UK business schools can engage with India Kevin McCole, COO of the UK India Business Council, reveals how UK educators can engage with Indian students and institutions Jaitley talked of India being a knowledge-based and productive economy. Specifically, Jaitley announced the creation of a Higher Education Financing Agency (HEFA) with an initial capital base of £100m, which will leverage funds from the market and work to create infrastructure in India’s top institutions like IITs. The objective is to ensure 20 such education bodies emerge as world class. There will be opportunities for UK institutions to partner with Indian bodies to support their rise up the rankings. It is also designed to help achieve the PM’s stated goal of making India an education hub for Asia. Another policy that would help make India an education hub is the Foreign Education Providers Bill, allowing foreign universities to set up campuses in India.

India’s demographics and economic growth present opportunities for UK business schools. Although long popular among Indian students, the numbers attending UK business schools have dropped since the UK Government changed the postgraduation work regulations. This has certainly caused frustration among both students and schools. But, important as it is to have Indian students on British campuses, there are other ways in which UK business schools can engage with India. There are good opportunities to meet the demand in India for international standard qualifications, knowledge, knowhow and technology. HIGHER EDUCATION IN BUDGET The most recent Indian Budget contained important announcements that continue the momentum of economic liberalisation and the growth of domestic demand by boosting the population’s spending power. In his budget speech, the Indian Finance Minister, Arun Jaitley, set out nine pillars of India’s development, one of which was education, skills and job creation.

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PARTNERSHIPS However, the lack of legislation doesn’t mean foreign educators can’t educate in India. There are various forms of partnerships or delivery that are possible. India’s leading institutions are well-known. Relationships with these renowned institutions are highly sought after. Yet, for most UK business schools, they’re not the best game in town. India is a country of entrepreneurs, with the number of high quality private-sector business schools ton the rise. These bodies are more flexible, quicker and hungrier than their government-run counterparts. They therefore offer a route to India for UK business schools. The trick is finding the right partner. So, there are opportunities in and with India. But the opportunities are different from those to which we have all become accustomed. They’re harder to find, and require a different approach. They are, though, certainly worth going for.

Thoughts on the state elections Richard Heald OBE, Group CEO of the UK India Business Council, reflects on the recent state elections and what they mean for India’s national politics and business climate In the recent state elections Prime Minister Modi re-established his popularity with BJP’s historic win in Assam and an increase in vote share in other states. This, for the BJP, is a welcome outcome following negative results in the Bihar and Delhi elections last year. However, it was not the BJP win that grabbed media headlines in India, but the poor election results of Congress, the main opposition party. Both the BJP and Congress have lessons to learn from the state elections. While the parties review their campaign strategies, organisation structures, what went right and wrong – two points clearly emerge. First, India remains impatient for growth and development. Second, non-performance is punished more badly than corruption. VOTING HABITS What is clear from the election results is that Indian voters are differentiating between national and regional issues. When choosing state government, the electorate consider local issues such as employment, social and physical infrastructure. The incumbent government in West Bengal was voted back to power, as it has largely delivered on its promises of providing roads, electricity and social welfare

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UKIBC NEWS ROUND UP GROUP CEO HONOURED BY HER MAJESTY THE QUEEN

programmes. The previous government in Assam was punished as it failed to deliver on its promises of job creation, healthcare, tackling social issues, and creating flood defence infrastructure. The voters’ desire for growth and development, and their willingness to punish non-performance, will be good for India. States increasingly compete with each other for more investment thereby generating faster growth in jobs, better focus on social and physical infrastructure, and stronger support of Indian voters. CENTRAL GOVERNMENT For Modi’s Government these elections were not just a means to strengthen its position at the state level. They were also critical in the battle to gain control of India’s Upper House, (the Rajya Sabha). The Government’s lack of a majority in the Upper House has adversely affected the administration’s reform agenda. The opposition has successfully used the Rajya Sabha to block key legislation, including the long-awaited law to introduce the nationwide Goods and Services tax (GST) that would make the country a single market and simplify commerce. This matters, not least as in our November 2015 survey on the ease of doing business in India, when over 50 per cent of the UK India Business Council members said GST was the single most important reform that would improve the operating environment. Though these elections will not immediately alter the balance in the Rajya Sabha, because current members need to serve out fixed terms, the results do give BJP a moral and psychological advantage to push through legislation. BJP should be encouraged to undertake bolder economic reforms in the coming months.

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The UK India Business Council congratulates Richard Heald, Group CEO, who has been appointed by Her Majesty Queen Elizabeth II as an Officer of the Most Excellent Order of the British Empire (OBE) for services to economic and trade relations between UK and India. Richard has been leading the organisation since 2010. During this period, the UK India Business Council, working in partnership with UKTI, has expanded rapidly extending its scope and reach both in India and in the UK. Latterly, the organisation has evolved into a full provider of export services to small and medium sized companies with offices in Mumbai, Bangalore and Gurgaon as well as regional representation across the UK. Congratulations, Richard!

LONDON

HOW TO WIN BUSINESS IN INDIA As the fastest growing economy in the world, India is a pocket of stability among global economic uncertainty. However, to maximise the opportunities available, it’s crucial business leaders acquire a deep understanding of the market. To ensure UK companies recognise how to engage at a local and national level, the UK India Business Council recently hosted an event with FTI Consulting to share insights on how to win business in India. The event brought together expertise from FTI Consulting and OCS, companies that have succeeded in this market, as well as advice from Ms Ajungla Jamir, First Secretary Economic, High Commission of India. Attendees discovered how to enter the Indian market, the risks faced by UK companies and how to engage at a macro and micro level to overcome them, as well as how to join hands with official bodies in the nation for guidance when initially setting up a business abroad.

LONDON

THE UK INDIA BUSINESS COUNCIL WELCOMES THE HIGH COMMISSIONER OF INDIA TO THE UK The UK India Business Council hosted a lunch for over 20 of our members to meet the recently arrived High Commissioner of India to the UK, His Excellency Mr. Navtej Sarna. The discussion centred on the many opportunities in India, the significant investment plans the businesses have, the progress the Government of India is making to improve the ease of doing business, and the further reforms and bureaucratic improvements that would accelerate investments into India. The businesses shared their experiences of and plans for India with the High Commissioner and, as they were from across many sectors, the discussion ranged widely – telecoms, incubation for start-ups, ICT, defence

partnerships, manufacturing technology collaboration, smart cities, tax and regulatory consistency, FDI liberalisation, and government procurement. The main take aways from the session were that UK businesses are committed to investing more in India, and that the UK India Business Council and the High Commission of India are committed to helping make those investments happen. To find out about our latest events visit www.ukibc.com/events

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COMMENT

The Modi Government: Two years on Ayena Gupta of the UK India Business Council explores how the Modi Government is unleashing India’s economic potential and what this means for UK businesses

Two years ago, the Indian electorate of over 810 million entrusted Mr Modi and the NDA Government with the job of building a stronger India. Mr Modi campaigned on an ambitious development agenda to be delivered through extensive reforms. Expectations and optimism were high after years of ‘policy paralysis’, high inflation and slowing economic growth. However, change was harder than Prime Minister Modi had predicted. The NDA Government promised an India ‘that encourages investment and rewards enterprise’. Yet, progress in pushing through ‘big bang’ reforms that many had hoped for, including land, tax and labour laws, has been underwhelming. Despite a sweeping victory in the elections to Indian parliament’s lower house, the Lok Sabha, the Government’s biggest hurdle has been the lack of a majority in the Rajya Sabha (upper house), which has stronger blocking powers than the UK’s House of Lords. Key legislation, such as the Goods and Services Tax, has been languishing in the upper house, amid disruption to parliamentary proceedings. Although these can be perceived as failures given the high expectations, India’s business environment has undoubtedly improved. In the World Bank’s Ease of Doing Business Report released last year, India’s ranking improved by 12 places. Meanwhile, according to an EY survey, twice as many senior global executives picked India over China as their top investment destination over the next three years. The NDA Government has made infrastructure investment a priority and is focused on streamlining regulations and increasing transparency to enable new development. All sectors are targeted, particularly the manufacturing industry through Prime Minister Modi’s ‘Make in India’ initiative. Whilst there has been a lack of ‘big bang’ reforms, there have been successes, most notably on lifting restrictions on foreign investment in sectors such as insurance, railways, defence, retail, e-commerce and real estate. The Government’s

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policy on fiscal rectitude, reducing subsidies and encouraging ‘cooperative – competitive federalism’ also augurs well for the Indian economy. The current situation is hopeful in India – the country is home to the world’s largest youth population with 356 million people aged between 10 and 24. With GDP projected to expand by 7.6 per cent in this fiscal year, India has eclipsed China as the world’s fastest-growing major economy. A favourable external environment, particularly the sharp decline in oil and commodity prices, has helped bring down inflation, improve corporate margins and shore up the current and fiscal accounts. As Modi passes the middle of his term as Prime Minister, it is critical that such favourable domestic and external circumstances be used as a catalyst for further much-needed fundamental reforms that can fully unleash India’s economic potential. The honeymoon period for the BJP Government, when Mr Modi was at the peak of his popularity, has gone. After the 2014 general election, Modi’s BJP scored equally impressive victories in state elections in Haryana and Maharashtra. But less than a year later, the BJP was defeated in the Delhi and Bihar elections. Even though the BJP had won a substantial share of the votes, it was unable to translate those gains into ‘INDIA HAS assembly seats in the face of a SET ITSELF united opposition. With crucial AMBITIOUS elections in five states this year, GOALS BUT BJP will have to fight to win THERE IS NO control of the country’s state REASON WHY THESE governments and gain a majority CANNOT BE ACHIEVED.’ in India’s upper house, for it is the AYENA GUPTA state assemblies that elect representatives to the Rajya Sabha. However, observers say that even though wins in the state elections can boost the morale of the BJP, it is

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unlikely that the Government will get a majority in the Rajya Sabha by the summer of 2019. The Government should instead reach out to the opposition parties to implement a lean, rational and predictable regulatory regime. This will set in place a system that will attract significant private investment, boost productivity and long-term growth. India has set itself ambitious goals but there is no reason why these cannot be achieved. If the Government perseveres with its policies, India may soon turn out to be the world’s star performer. In an age of growing interconnectivity, and given the rising importance of India on the world stage, UK businesses need to continue to think of new ways

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and strategies to engage with India. India’s favourable economic environment, together with the Government’s policy reforms and initiatives such as ‘Make in India’, ‘Digital India’, ‘Smart Cities’, ‘Skill India’, and ‘Startup India’, offer more opportunities than ever for UK businesses.

WHAT NEXT? Contact Ayena Gupta, Research and Policy Manager ayena.gupta@ukibc.com

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India on the move There has never been a better time for UK companies to look towards the Indian market to increase their export revenues, as James Cliffe, Head of Business Banking at HSBC, tells Jack Ball

FINANCE, LEGAL & PROFESSIONAL In 2015 the growth rate of the Indian economy surpassed that of China, a country whose stratospheric economic rise has remained impossible to ignore. With a rise in demand for domestic goods and manufacturing, India is a market that is becoming more affluent. As a result, the increasing purchasing power of a swelling consumer class, forecast to reach 100 million people under the age of 50 by 2020, is proving attractive to many new investors in the subcontinent. With a demand for quality British goods and a shared heritage that aligns both countries, UK companies have a distinct advantage compared with other investors hoping to trade in the Indian market. However, according to a 2013 PwC report on UK SMEs in India, opportunities are time limited and becoming increasingly competitive from a wider international base. With more worldwide opportunities presenting themselves, particularly in India, global organisations, like HSBC, are ideally placed to help UK businesses compete in the Indian market.

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â&#x20AC;&#x2DC;WE KNOW THAT IF A BUSINESS STARTS TO EXPORT, IT CAN GROW FOUR TIMES FASTER THAN A BUSINESS THAT TRADES DOMESTICALLY.â&#x20AC;&#x2122; JAMES CLIFFE

Mumbai Metro

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FOREIGN INVESTMENT Not surprisingly, James Cliffe, Head of Business Banking at HSBC, is optimistic about the future of the UK-India commercial relationship and the ways in which HSBC can help those UK businesses, particularly at the SME level, effectively engage with the country’s enormous market. “We know that if a business starts to export, it can grow four times faster than a business that trades domestically. Certainly at HSBC we align ourselves to the major trade corridors, and the UK-India corridor is now

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getting a significant amount of focus within the organisation,” he says. “Businesses should be investing their time researching the opportunity for their product or service. If they do that and they get it right, it’s really going to help their businesses grow.” Indeed investment figures, particularly from 2000, between the UK and India have been extremely positive. According to a CBI business report on Foreign Direct Investment into the country, the UK remains the largest G20 investor, standing at nine

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per cent of all foreign investment. The report also reveals that many UK companies consider India as an attractive investment destination because of its huge domestic market that continues to grow. Of the 77 British companies included in the survey, 86 per cent indicated that it was India’s large and growing domestic market that was the primary attraction for investment. Moreover in November 2015, Prime Minister Modi’s Government announced further economic reforms to more sectors of the economy, easing

Left: The Cyber Gateway office complex in Hi Tech City, Hyderabad Above: Select Citywalk in Saket, Delhi

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rules of investment in areas including defence, construction, media, foreign investment and private banking. Correlated to these reforms, Mr. Modi even released a series of tweets highlighting the current Indian Government’s continued commitment to increasing foreign investment into the country: “The Government’s commitment to development and reforms is unequivocal & unwavering. Today’s reforms are another example of emphasis on ‘Minimum Government, Maximum Governance’. They will ease, rationalise & simplify processes.” Such reforms are part of Mr Modi’s wider plans to move India away from a position of low level manufacturing strength, and James believes UK businesses are optimally positioned to respond to this move. ‘Make in India’, ‘Digital India’, and ‘Smart Cities’ initiatives are just three examples of how Modi hopes his Government can transform the economic base of the country, attracting global talent and investment to satisfy the country’s increased infrastructure and manufacturing requirements. “Prime Minster Modi wants to build an economy based on digital, on financial services and highvalue manufacturing,” says James. “When you look

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at these links to the UK economy, there are very tangible opportunities. If you have design expertise for example, export this to India, and make sure the production is done there through its high value manufacturing base. “One of the great strengths of the UK is its brand, meaning the ‘Britain Is Great’ brand and our flag. British products are aspirational and consumers overseas continue to want British brands. As people generate wealth, their aspirations align to wanting British products. “Because of the history that we have with India there’s a recognition of British quality and British products. At the very basic level there’s a love of cricket that you see across all ethnicities and religions within India that transcends both nations.” SMEs In the words of Prime Minster Modi, the Government’s economic reforms and an enviable shared history with India make both countries an

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Above: Windmill park in Kanyakumari Right: ICT conference and exhibition in Kolkata

‘unbeatable combination’ in terms of knowledge sharing and increasing trade. As such, the possibilities for UK businesses to begin exporting to India have never been more present. Moreover, the UK Government is actively encouraging the UK SME base to increase their global footprint and work alongside larger British commercial players, who already have a presence in India, such as Marks and Spencer, Unilever and global insurer Aviva. “UKTI and the UK Government have set a target of 100,000 more UK companies exporting internationally by 2020,” says James. “But they’re not going to achieve this with landmark deals. We’ve got to do this from an SME base.” As such, HSBC plays a significant role in UK export and trade finance for UK SMEs specifically looking towards the Indian market. “Whether people are exporting a service or product, it’s making people aware of the opportunities in specific markets like India that is

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crucial. We’ve seen what happens ‘WHETHER PEOPLE ARE when companies start to trade EXPORTING A SERVICE OR internationally but are unaware of PRODUCT, IT’S MAKING the risks of the market they are PEOPLE AWARE OF THE entering into.” OPPORTUNITIES IN This commercial awareness is SPECIFIC MARKETS LIKE particularly important for SMEs INDIA THAT IS CRUCIAL.’ and entrepreneurs who are JAMES CLIFFE looking towards newer markets like India, but may have little or no knowledge of how the market operates or its import/export dynamics. “If you’re going into a market where there’s no opportunity, you’re wasting your most precious resource, which is your time. Understanding the market opportunity, for me, would be paramount, looking at whether there is an identified opportunity, how we take advantage of that and how we do it in a way where we can protect ourselves.” Identifying where these opportunities lie can sometimes be straightforward. “I would look at where people’s competitors are being successful because that to me is a good sign. If my competitor is exporting to that market or is importing from that particular country, then there are going to be opportunities for others too.” James is confident of HSBC’s central role in helping boost the number of UK SMEs looking towards India, citing a lack of confidence as the main barrier to developing export links with the country. “Rather than listening to a banker talk about exporting, what we like to do at HSBC is put our customers in touch with other customers who’ve taken that first step. If someone sees another

member of their community who have taken that initial step and begun to export, they’ll start to say: ‘Well actually, if they can do it, then I can do it.’” It is this facilitation of networking between UK SMEs already exporting to India and others looking to the Indian market that constitutes a large part of HSBC’s role. “What we like to do is bring customers together and share the learning experience. This helps spread knowledge and crucially gives businesses the confidence,” says James. Whilst admittedly it is easier for a UK SME to trade with somebody in Manchester or Leeds for example, newer digital communication channels like Skype are breaking down barriers to trading internationally. “Half the meetings I have these days are held via Sykpe, FaceTime or an internal video channel,” says James. “Five years ago, the majority were not using Skype. Now we use it for a lot of our business communication.” This easing of international communication is critical for companies’ initial ventures into newer markets, where they may be apprehensive to engage with local businesses. “Talking to somebody on Skype in Manchester or Leeds is the same as talking to someone on Skype in Delhi or Mumbai. As people continue to communicate in this way we will see more people using this as a mechanism for export, because they begin to know the person they’re dealing with, and this knowledge starts to build trust and confidence.” HSBC SME SUPPORT FUND Once exporting opportunities within India have been identified, HSBC is then on hand to help fund the export goals of those SMEs who want to make that initial first step. “Last year we announced an £8bn SME fund to support UK businesses,” says James. “In many regions we actually lent out more than the size of the fund by a considerable margin.” As a result, the 2016 SME support fund has increased by £2bn to £10bn, highlighting the bank’s unwavering commitment in supporting growth for SMEs across the UK from a variety of industrial sectors. “We need to harness the power of HSBC’s global network to start to connect people to these opportunities,” says James. “However, I don’t think the penny’s dropped. The opportunities in India are great and suited to most UK businesses.”

WHAT NEXT? Contact James Cliffe at www.hsbc.com/about-hsbc/structure-andnetwork/commercial-banking

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Reforms in India: The unfinished agenda There are still a number of barriers to doing business in India, says Professor Arpita Mukherjee, Indian Council for Research on International Economic Relations (ICRIER) FINANCIAL, LEGAL & PROFESSIONAL India is one of the worldâ&#x20AC;&#x2122;s fastest growing economies. According to the International Monetary Fund (IMF), it grew by 7.3 per cent in 2015 and is expected to grow at 7.6 per cent in 2016 and 2017, which is faster than other emerging markets such as China, Brazil and Mexico. Comparatively, the UK grew at 2.2 per cent in 2015 and is projected to grow at the same rate in 2016 and 2017. The growing Indian market and its large consumer base has attracted companies from other countries, particularly the UK, to export to and invest in India. However, in doing so, they are facing

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a number of barriers, one of which is tax as there is no common tax regime across the 29 states. As a result, doing business in the nation is especially challenging for those companies operating across states because they face multiple taxes and duties. To ease this problem, the Government wants to pass a Goods and Services Tax (GST) Bill. This will be one of the biggest indirect tax reforms which will help to transform India into a uniform market. However, implementation of this reform is slow as the Government does not have a majority in the Parliamentâ&#x20AC;&#x2122;s Upper House, the Rajya Sabha, which has significant blocking powers. Nevertheless, the Administration is continuing to push the Bill.

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REDUCING TAXES Corporate taxes in India are much higher than in countries in the Association of Southeast Asian Nations (ASEAN). Following the implementation of the free trade agreement (FTA) with ASEAN, a number of Indian companies are relocating to ASEAN. In the Union Budget of 2015-16, the Finance Minister Arun Jaitley announced that the Government is keen to phase out corporate tax exemptions and bring down corporate tax to 25 per cent from 30 per cent over the next four years. Most companies have welcomed this announcement as they prefer lower taxes compared to subsidies and tax exemptions. This is because subsidies and certain tax exemptions (for example, the export linked subsidies) can be actionable or even prohibited under the World Trade Organisation’s Agreement on Subsidies and Countervailing Measures. In the Union Budget of 2016-17 only the corporate tax rate for companies with a turnover of 50m rupees (£520,898) or less has been lowered by one per cent to 29 per cent plus surcharge and cess. There has been no tax reduction for large companies thus far.

foreign companies to invest in India and establish their value chains. Conditions related to inflow of FDI in sectors, such as retail and insurance, are restrictive and do not allow for the establishment of a best business model. It is expected that some of these sectors will witness further FDI liberalisation in the next two years.

INFRASTRUCTURE PROJECTS One of the key problems in successfully executing infrastructure projects in India is related to land acquisition which is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR). The private sector has raised concerns about the high rate of compensation under this Act and the Government has been trying to amend it, but this has been hampered due to the lack of majority in the Rajya Sabha. Another barrier faced by infrastructure projects is transparency in government procurement. The Government is in the process of drafting the Public Procurement Bill 2015 to usher in greater transparency in public procurement, support the ‘Make in India’ campaign and facilitate free trade talks with ‘THE GROWING HIGH TARIFFS AND IMPORT regions such as the European INDIAN MARKET DUTIES Union. The third barrier is AND ITS LARGE These are key problems for bureaucratic delays and CONSUMER BASE businesses in India and companies requirement of multiple HAVE ATTRACTED trying to establish value chains. clearances. The Government is A NUMBER OF COMPANIES A company located in a special trying to set up online e-biz portals FROM COUNTRIES SUCH economic zone (SEZ) in India to reduce such delays. AS THE UK TO EXPORT (which is treated as a foreign TO INDIA AND INVEST LABOUR MARKET REFORM territory) trying to export to IN THIS COUNTRY.’ While the Central Government is the domestic tariff area (DTA) PROFESSOR ARPITA MUKHERJEE trying to revisit the labour will suffer due to the high regulations to boost manufacturing autonomous/unilateral tariffs. and create jobs, some states such This is unlike a product imported as Rajasthan have already taken from a country with which India the lead in reforming labour regulations, and it is has a FTA. A number of Indian expected that other states will follow suit. companies are, thus, relocating to The Government has taken steps in the right countries such as Thailand, which is not only direction to facilitate ease of doing business, but adversely affecting the Indian SEZs but is also now needs to introduce reforms in areas such as leading to loss of employment and investment. To FDI liberalisation in retail, implementation of the ensure the ‘Make in India’ campaign is successful, GST, streamlining the tax regime, and increasing the Government needs to reduce the autonomous/ efficiency and transparency in governance structure. unilateral tariff and give SEZs the same tariff lines as These reforms will attract more business from enjoyed by Indian FTA partners. This is a key reform, countries such as the UK. which is likely to be implemented soon. FDI POLICY Recent reforms have liberalised FDI limits or conditions on FDI in a number of sectors including defence industry, broadcasting, insurance, horticulture, railways, marketing of food processed in India, single-brand retail and construction sectors. However, there are FDI restrictions in some key sectors such as multi-brand retail, accountancy services and legal services, which are prohibiting

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WHAT NEXT? Contact Arpita Mukherjee at arpita@icrier.res.in

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Return on investment The fast-growing Indian economy is seeing a large amount of returning diaspora, which can only enhance it more, explains Dr Didar Singh of FICCI VIEWPOINT Alwyn (Pittu) Didar Singh is Secretary General, FICCI. He is a former civil servant who, until recently, served as the Secretary to the Government of India in the Ministry of Overseas Indian Affairs. Prior to this, he was Member (Finance), the National Highways Authority of India, Department of Road Transport and Highways at New Delhi. He has also served as Joint Secretary with the Ministry of Heavy Industries and Ministry of Commerce (Foreign Trade). Dr. Singh was a member of the Global Agenda Council on Migration (2012-15) part of the World Economic Forum (WEF), and has been conferred an award for his service to the Indian Diaspora by Global Organisation of People of Indian Origin (GOPIO International). He functions as Chair of the Diaspora group of KNOMAD, World Bank. He was named a Distinguished Alumnus of St Stephenâ&#x20AC;&#x2122;s College in 2012, and in July 2014 also awarded an Honorary PhD from the University of Birmingham With 1.2 billion people, India has a resource like no other. As a result, over the next 40 years, the nation will provide human resources to the world-wide economy. By 2025 Goldman Sachs estimate the country will contribute 110 million professionals to the global workforce. At the same time, India is recording the worldâ&#x20AC;&#x2122;s highest return migration. Each year, 100,000 nationals return to India to benefit from the improving economic situation. Diaspora can provide a competitive advantage in two ways. The professionals fulfill a need through their individual expertise, but more importantly they

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build a bridge between economies. Those who remain abroad continue to send remittances, which can contribute huge amounts to certain states. The Indian diaspora, whether it is in the US, the UK or Australia, has come to expect certain ways of working. So, the return of the diaspora will only encourage the changes that Prime Minister Modi is putting in place to encourage inward investment and bring India truly into the 21st century. COMPETITIVE FEDERALISM At the heart of Modi’s new policies is competitive federalism, which encourages competition between states. For the returning migrant worker, and potential investor, this policy is improving the ease of doing business. Consequently, it hopes to increase the quality of life across the nation. The policy is underpinned by several key government campaigns: ‘Make in India’ is the manufacturing initiative aimed at providing jobs for the local population. However, this policy only works when states begin to compete with each other to provide a better economic environment to attract businesses to invest. Similarly with ‘Skill India’ – if the skills don’t exist, the investors won’t come. The Central Government is providing a basic incentive to each state government and urban development body to kick-start their ‘Smart Cities’ and ‘Digital India’ programme. The success of these campaigns depends on urbanisation. Here alone there is a huge opportunity for investment actually worth $10bn. That’s the amount of investment that will be required to construct the necessary sanitation in these cities, and provide the equipment to maintain it. It’s a very rough calculation, but those are the kind of figures we are talking about. Today the age of subsidies is over. The Government cannot dole out subsidies and special incentives to people – it’s a non-starter because it doesn’t go beyond a certain limit. It’s the business environment alone that determines why people seek work in different locations across the world. As a result, if you improve the ease of business you’re improving the business environment.

‘FOR INDIA, WHICH HAS A HEALTHY TECHNOLOGICAL SECTOR, WE NEED TO INNOVATE AND ADAPT TECHNOLOGIES TO LOCAL HIGH QUALITY, LOW COST SOLUTIONS.‘

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THE FACE OF DIASPORA It’s a totally different kind of migrant that returns to India. The bulk are engineers, scientists, and entrepreneurs. These professionals have worked in business environments in the UK or US, and come to expect a different, more modern, way of working. States need to offer the best opportunities to attract these individuals. Today’s migrant has a greater link back home, especially in terms of remittances. At $70bn every year, India has the world’s largest amount of remittances. It’s an enormous amount of money that stabilises many state governments. For example, a staggering 31 per cent of the state domestic product of Kerala comes in the form of remittances. The more investment in India, the better the working and living environment becomes. This is also relevant to the large group incubators – people tend to think of incubators for start-ups but they are also for big companies coming together. In Silicon Valley, one third of all enterprises have Indian origins. Engineering students who went to the US to do their Masters or further studies entered start-ups. We refer to their return to India as ‘brain gain’ – a reverse ‘brain drain’. The India software sector was a big success in the late 90s and 2000 onwards, and created a different connection with the Indian diaspora, initially with the US and now with the UK as well. We are living in a globalised world. There’s a common market and professionals go wherever they find their expertise is of value, or they acquire their skills in Silicon Valley, Singapore or London and then they move on. They don’t look at trade relations; they look at the market and where they can make money. India and the UK have a common ecosystem. There’s a very large number of Indian companies that have come to the UK, and a similar amount of UK companies that have gone to India. They know the systems in both places, but as the business and technology improves, individuals, professionals and corporations will then move, depending on how they perceive their success in that ecosystem.

Right: Dr Singh with Dr Jyotsna Suri, President, FICCI (centre) and Rt Hon Patricia Hewitt, Chair of the UK India Business Council Below: Dr Singh receiving his Honorary Doctorate from University of Birmingham

THE PRESSURE OF POPULATION The demographic dividends in India mean we have to build an economic environment in which jobs get created. That is the real pressure on all state governments, as jobs are required across every part of India. Consequently, this compels the Government to pursue a forward-looking economic policy. The world is changing. India is changing. Traditional sectors, including manufacturing and agriculture, are recording a minus growth in terms of employment. Therefore, as we’ve seen in developed countries like the UK, the US and across Europe, the service sector is expanding.

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‘THE INDIAN DIASPORA, WHETHER IT IS IN THE US, THE UK OR AUSTRALIA, HAS COME TO EXPECT CERTAIN WAYS OF WORKING.’

For India, which has a healthy technological sector, we need to innovate and adapt technologies to support sectors, such as agriculture, food processing, retail and marketing. As the health and education system, the retail and agriculture system improve, more jobs will actually be created. The potential in many sectors is so high that skilled people returning to the nation go straight into work. This gives India the human capital, not just to up-skill its own workforce, but to support businesses within countries all over the world.

WHAT NEXT? Contact Dr Singh at didarsingh.com

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Technology is the great equaliser between small startups and industry giants, and itâ&#x20AC;&#x2122;s changing how business in the 21st century is being done, says Matt Preschern, Executive Vice President and CMO of HCL Technologies

Scoring an equaliser for future business 24

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DIGITAL INNOVATION As a fast-growing global IT services company with a strong Indian heritage, HCL Technologies is something of an innovator in the technology industry. Founded in 1991, the company is now worth around $7bn dollars and operates in 31 countries around the world. Executive Vice President and CMO Matt Preschern has more than two decades of leadership experience in marketing and strategic business development, and is responsible for leading all marketing functions, including global business and strategic marketing, sales enablement and corporate communications. He describes HCL as “a very employee-centric company with core values of trust, transparency and flexibility.” The company’s management mantra is ‘employees first, customers second’. Matt explains: “If we can create an environment where our employees are empowered, and they’re the ones who feel it’s their own business and can take action with respect to their relationships with clients, we firmly believe that this will create a different set of relationships with our customers.” HCL is headquartered in Noida, Uttar Pradesh, India, with significant presence in Chennai and Bangalore in the south of the country. Matt makes regular visits to India from his base in New York and describes his experience of the businesses and workforce there. “There is a tremendous skill set in the Science, Technology, Engineering and Maths (STEM) area. If I look at HCL for example, we have a really strong engineering background and a highly skilled workforce. When it comes to technology and innovation I believe the UK and India are growing at speed. These are some of the underlying foundations that allow an entire country – as well as HCL – to participate, collaborate and innovate with many European and other Western nations. “We’re seeing many businesses which are really focusing on innovation, on business transformation, but at the same time lowering costs. I’m very encouraged to see how technology is becoming an underlying and really pretty pervasive element of innovation and business transformation.” DIGITAL ECOSYSTEMS Behind HCL’s innovative approach to business is its creation of ‘digital ecosystems’ with its clients and partners, described by the company as ‘service offerings and solutions across industry verticals that are strengthened by alliances with global technology vendors, customers and niche service providers.’ The company recently acquired Point to Point Products, a leading cloud solutions design company, and in 2008 acquired Axon, the key FAP

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consulting company. “There are so many areas where we either partner with companies or we bring them into the fold,” explains Matt. “It’s a core element of our effort to grow in the UK and to partner, whether in the digital space or in the IT space, and to help companies on their specific transformation journey.”

‘NEW TECHNOLOGY IS LEVELLING THE PLAYING FIELD AND REDUCING THE BARRIERS OF ENTRY.’ MATT PRESCHERN

MANCHESTER UNITED One such organisation is Manchester United Football Club. HCL recently signed a groundbreaking global partnership with the club to transform the digital experience of its worldwide fan base. The club has over 650 million global followers, 99 per cent of which will never set foot inside the stadium. Consequently, HCL is developing a United Xperience Lab housed within Old Trafford Stadium that can be used to explore ways in which technology can create a unified fan experience for supporters. “From a fan perspective you will see the start of specific efforts in the mobile space,” says Matt. “We’re working closely to improve the experience

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that fans can have through the mobile app. Three out of four fans who attend a football match use a mobile device during the game for additional information such as player stats. Interestingly, two out of three people who watch a football match at home use a device, whether mobile or otherwise, to look up information online while they watch the game on television. “Whether you’re a 14-year-old fan in Australia, South America, or in Singapore, just because you can’t be in Old Trafford there still needs to be a possibility to experience Manchester United and Old Trafford in a different way. So you’ll see a lot more posts on the website and in the mobile space, but also with the entire ecosystem of its partners.” SPORTS VERTICAL Matt believes this is an exciting new area in sports technology. “The sports vertical, this notion of how you experience something if you’re not physically able to attend in the stadium, transcends various sports,” he says. “Tennis is clearly one sport where you see a lot more technology being embedded. “We’re increasingly starting to see sensors embedded into racquets that allow you to measure racquet speed and contact points. Technology is

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being used to create higher performance with the underlying analytics and also revolutionise the experience. I went to the US Open and one of the very first apps I downloaded was the US Open app to ensure I get all of the player stats, their ranking in the world, the records for the year, as well as other things. For now we are 100 per cent focused on Manchester United to make this a resounding success for the club, its fans and other companies, but I do think there will be opportunities to do the same for other sports and clubs.” HCL’s partnership with Manchester United is based on more than digital transformation. “We’re very proud and humbled to have been chosen to work with Manchester United, and we’ve been proud to demonstrate our ability in the digital space and to also develop and run things at scale on a global basis, which was ultimately one of the key differentiators,” says Matt. “The other thing we found is that our belief in an employee-centric and value-based culture was a very good fit with Manchester United. I met with the team in New York; I’ve been to Manchester multiple times and met various team members there as well, and found the cultural alignment is truly complementary.”

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CREATIVE DESTRUCTION HCL is innovative not only in the technology it produces, but also in the ethos of the company, and how it is structured with its ecosystem of employees, partners, customers and niche markets. A banner headline on the HCL website reads: “Technology is allowing new-age start-ups to overcome the domination of established industry behemoths, ushering in the era of the 21st century enterprise.” And this is something at the core of HCL and how it operates. Matt quotes Yale Professor Richard Foster’s study into ‘creative destruction’, which looks at how large companies are being crushed by innovations elsewhere: “Half a century ago, the average lifespan of a Fortune 500 company was roughly 50 years. By 2010 that average lifespan had been reduced to 18 years,” explains Matt. “At the same time, the number of ‘unicorn’ companies valued at $1bn or more have grown from 45 to 105 in the past decade. So some projections say that by 2020, roughly three quarters of all Standard & Poor’s 500 Index companies did not exist in 2000.” He believes this happens for a number of reasons. “New technology is levelling the playing field and reducing the barriers of entry. There’s a significant change in customer expectations and how you need to adapt to the digital age. And now there’s new competition from these nimble, blend digital companies which are causing widespread disruption.” How does business compete with this? Matt explains: “First, you have to provide a consistent experience across all touchpoints, physical and digital – whether the customer visits a webpage, accesses social media, receives a bill or calls an 0800 number. Second, make sure your underlying infrastructure and technology are agile and lean enough to allow you to develop and create digital apps and services at the rate and pace that’s required. “Third is the notion of ecosystem – a new level of collaboration between employees, suppliers, providers and smart assets. And last, is a really strong focus on outcomes. If you’re a traditional ‘bricks and mortar’ company, you have to rethink your approach to customer experience. Are you agile and lean enough to truly compete? We believe that for companies, technology becomes the truly great equaliser, and it can help you make these changes in 21st century enterprise.”

WHAT NEXT? Contact Sumit Narain at sumit_n@hcl.com www.hcltech.com

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Commercial beacon in the heart of the UK Leeds City Region offers significant international opportunities in various industrial sectors, says David Shepherd, Director of Trade and Investment, Leeds City Region Enterprise Partnership 28

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business networks, that enables companies to enjoy exceptional and sustained growth. With over seven million people living within an hour’s drive, the location boasts a vast talent pool including the UK’s largest manufacturing workforce. Alongside the ready pipeline of 41,500 annual graduates from the region’s nine higher education institutions (the largest higher education cluster outside London), the region offers a diverse and available workforce that is highly skilled and adaptable. It is also home to thriving international businesses, including Dr Reddy’s, Mastek, Vivimed, Elecon Engineering, and the Hinduja Group. Additionally, the City Region boasts the highest concentration of Science, Technology, Engineering and Maths (STEM) graduates outside London. It also has one of the top graduate retention rates in the UK, with 50 per cent of students from Leeds City Region universities opting to stay and seek employment following graduation. Added to this large-scale business base and exceptional ‘THE REGION IS HOME TO A pipeline of talent is an inherently VAST NETWORK OF LONGinnovative approach, which is at ESTABLISHED ACADEMIC the heart of the business AND PRIVATE RESEARCH environment within the Leeds City CENTRES SPANNING THE Region. The area is home to a REGION’S KEY SECTORS.’ vast network of long-established DAVID SHEPHERD academic and private research centres spanning the region’s key sectors. The collaborative and open approach to innovative thinking, especially between academia and industry, brings new ideas, new materials, and new products and services to market, ultimately creating exciting commercial opportunities.

Bradford City Park

INDUSTRY PROFILE With a Gross Value Added (GVA) figure of £62.5bn, Leeds City Region is an economic powerhouse with a global reach. It offers operating costs that are 28 per cent lower than London and the South East, creating exceptional opportunities for growth across a multitude of business sectors. A number of collaborative and connected UK cities make up Leeds City Region, underpinned by the major city of Leeds. It is an obvious business location, offering unmatched and cost-effective access to the correct skills, infrastructure and

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FINANCIAL AND PROFESSIONAL SERVICES HUB As the UK’s most prominent financial centre outside London, Leeds City Region is a prime location for financial and professional services. This has been proven by the wide range of companies that have already located in the region, ranging from global banks to innovators in financial technology. This well-established cluster of high quality financial and professional services firms, coupled with an open and collaborative ecosystem, makes it an excellent location for this sector. Indeed, TheCityUK, a membership body that champions UK financial and professional services, has identified Leeds City Region as the UK’s second centre for banking. The location was also recently named a Financial Centre of Excellence by UKTI, recognising the strength of the financial cluster, its contribution to the economy and the supporting infrastructure and assets the region offers. Particular strengths within the financial and professional services sector include legal services,

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investing in new premises, a sign of their confidence in Leeds City Region as a location which will in turn fuel future growth.

York Minster, York

HEALTHCARE HOTSPOT Leeds City Region also hosts a diverse and influential healthcare ecosystem with four of the five NHS England headquarters calling the region home. This has made this region unlike any other, providing unrivalled opportunities for businesses looking to supply into the NHS. Healthcare is a priority worldwide, particularly to both India and the UK. The UK is home to the NHS, the world’s largest publicly funded health service. The region is committed to enabling healthy and productive lives which, coupled with an open and collaborative ecosystem, has seen the City Region become a leading health innovation hub.

insurance, banking and financial ‘THE CITY REGION IS technologies. Leeds City Region’s HOME TO THE HIGHEST established network includes a CONCENTRATION OF presence from major international SCIENCE, TECHNOLOGY, firms, such as DLA Piper, ENGINEERING AND MATHS Handelsbanken, Deloitte, TSYS, (STEM) GRADUATES ICICI Bank, and TD Direct OUTSIDE LONDON.’ Investing. These businesses are DAVID SHEPHERD benefiting from the unparalleled and cost-effective access to talent, business networks, and low-cost yet high value office space available. Additionally, the region has seen extensive commitment from global firms based here, with major international players including KPMG, PwC, Addleshaw Goddard, and Squire Patton Boggs

Dean Clough Courtyard, Halifax

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EXCELLENCE IN ADVANCED MANUFACTURING Leeds City Region has distinct advantages in manufacturing in three key areas: market size, skilled workforce and supply chain. Best placed to address the challenges facing the future of manufacturing, Leeds City Region provides the perfect location for companies to grow, innovate and improve efficiency. Manufacturing in Leeds City Region contributes over £7bn to the UK economy. It is the UK’s largest overall manufacturing base, hosting double the national average of companies in the advanced manufacturing sector. With the greatest concentration of high-value manufacturers in the UK, and renowned for its scale, diversity and excellence, Leeds City Region is already shaping the rapidly changing manufacturing environment. A key point of differentiation lies in the Region’s ability to provide high quality bespoke engineering solutions across a diverse range of key growth sectors and technical competencies, including precision technologies, robotics, metrology, digital manufacturing and smart materials. This strength combined with its vast talent pool, a strategic position at the heart of the UK, and the close proximity to major ports, makes Leeds City Region a strategic and competitive destination to locate global manufacturing operations. DIGITAL AND TECHNOLOGY Technology innovation and data analytics are rapidly changing the way we do business and transforming markets across sectors. Technological advancements are unlocking the power of intelligent data and driving competitive advantage – areas where Leeds City Region is ahead of the game, having developed initiatives such as ‘coding clubs’ in all Leeds primary schools, as well as hosting Google’s first ever Digital Garage. The Region has established a firm lead in the ‘data revolution’, establishing itself as a world-class

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Leeds University

IMAGE: WWW.SHUTTERSTOCK.COM

location in data management and analysis of big data in both private and public sectors. Arguably, big data has had the most transformational and disruptive influence since the industrial revolution. The pioneering research taking place, and the approach to hosting and interpreting data via Leeds Data Mill, Leeds Open Data Institute and Leeds Institute for Data Analytics, has provided unique access to some of the worldâ&#x20AC;&#x2122;s largest databases and world-leading academics and researchers who continue to work in innovative ways with these data assets. Additionally, Leeds City Region has unequalled digital connectivity and is home to the only independent internet exchange outside London, which affords exceptional resilience, data transfer speeds and cybersecurity. Reducing the risk of data loss, while providing low-cost/high capacity data routes internationally, the City Regionâ&#x20AC;&#x2122;s exceptional connectivity enables split-second transactions around the world, in turn generating efficiency. Finally, and crucially, Leeds City Region Enterprise

Partnership (LEP) can offer support to businesses that are considering further growth or expansion into the UK. Support ranges from a comprehensive service, including market intelligence, to aftercare and ongoing support once a business has been established in the region. The LEP can also help you identify, secure and access funding, property and talent to find the perfect solution to support your business growth goals. With unrivalled access to markets, an exceptional talent pool, and attractive support packages available, Leeds City Region is the ideal place to invest and gain market access in the UK.

WHAT NEXT? For more information please visit www.investleedscityregion.com or email invest@the-lep.com or follow us on Twitter @LeedsCityRegion

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Chief Minister of Andhra Pradesh, Nara Chandrababu Naidu, has big plans for the recently bifurcated state. He tells Sarah Cartledge why he believes its new capital city, Amaravati, has the potential to become one of the top ten cities in the world

Driving force INTERVIEW Nara Chandrababu Naidu has nearly 20 years’ experience in state government, as both Chief Minister and in opposition in the original and then the reduced State of Andhra Pradesh. Throughout this time he has emphasised the need to push for the development of better information and communications technology (ICT) in India. As part of this drive, Naidu was instrumental in setting up the Microsoft software development centre in Hyderabad, the second such place outside of Seattle in the US. The centre is home to T-Hub, India’s largest technology incubator in developing accelerators and start-ups, and is recognised by Microsoft as representing India’s technology talent. Despite growing up in a farming family in a remote rural area, Naidu has always had an eye on the future. From the days when he used to walk a mile and a half to primary school, his emphasis has been on education and improvement for the state’s inhabitants. In 2000, he was voted IT Indian of the Millennium by a poll in India Today and 20:20 Media. Now he has the opportunity to create a new city, Amaravati, that will fulfil his aspirations to create a 21st century India. It’s clear from the rousing reception he was given at a conference near Westminster that the majority of London’s Indian diaspora believe he can achieve his goals. As he walked in to the room he was surrounded by a huge crowd of well wishers, treating him almost as a film star. And his dynamic personality and reputation is a major part of his success, both in the UK and India. BUILDING A CITY Despite starting off with a revenue and power deficit, Andhra Pradesh has become one of the fastest growing states within two years. In his vision for a Smart City Naidu has been supported by the Singapore Government whcih has provided

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three potential plans for the city and the capital region. “It is very dynamic planning,” he explains. “The capital is not only an administrative city, but one with economic equity, dynamism, social equity and wealth creation for the state. “We are building nine cities within the capital, including an administrative city, a justice city, a financial services city, a knowledge city, a sport city, a health city and so on.” Naidu is passionate about the growth potential of Amaravati, and takes confidence from business growth within the region. “We are doing very well with businesses,” he says. “This year, the level of growth in India is 7.6 per cent, whereas growth in Andhra Pradesh is 10.9 per cent. We’re number one in the country. We have ensured the creation of 220,000 jobs by building several industrial zones and corridors, food parks and other business spaces to touch a growth of 10.9 per cent against the national average of 7.5 per cent.” “From being ranked second in the Ease of Doing Business in India rankings, to being a state with third highest FDI in India and China, to becoming the first state in India to ensure energy efficiency by lighting up over 90 per cent of the state’s households with LEDs, we have come a long way.” In addition, the State now has a power-surplus. Naidu is working on increasing revenues from agriculture by making it profitable, while simultaneously balancing industrial development. He is keen to win over the agriculturally-based community by landpooling – encouraging farmers to donate their land to the new city area for a financial return in the future. “The state has many advantages - very dynamic people, river resources, water resources and wealth. Wherever there is a sea coast, there is four to five times better development compared to inland. I want to promote the city of Amaravati in a big way and our aim is to make it one of the top ten cities in the world,” he says.

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FOREIGN INVESTORS Current investment opportunities in Andhra Pradesh appear promising. At the beginning of January the State received commitments for investment worth Rs 4.78 lakh crore or 4,780,000 rupees (£47.8bn) at the CII Partnership Summit held in Visakhapatnam. The proposals involved 331 Memorandum of Understandings (MoUs) that the state signed with companies and promised to create a million jobs. Naidu firmly believes a bright future awaits the new State of Andhra Pradesh. “We have created excellent industrial policies, even sector-wise. We are giving excellent incentives for all different sectors including electronics, automobiles and agro-processing,” he says. “Population, growth of education, better conditions for the population and technology advances are very strong, especially in IT.” The Chief Minister is also gearing the State up for tourism, particularly ecotourism, and building the necessary infrastructure in the forms of ports, airports and roads to encourage visitors and businesses alike. “These are the initial years which will shape our State’s future. And we are treading

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‘I WANT TO PROMOTE AMARAVATI CITY IN A BIG WAY AND OUR AIM IS TO MAKE IT ONE OF THE TOP TEN CITIES IN THE WORLD.’

carefully, taking baby steps towards development,” he comments. “I have experience. I have a vision. By 2022, Andhra Pradesh will be ranked among the top three states of India. By 2029 it will be the place with the highest happiness index in the country. By 2050, it will be the best destination in the world. We are working to reach that and the citizens of Andhra Pradesh will reap the benefits.”

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Amaravati: A vision for a truly 21st century city 34

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Amaravati, India’s latest pioneering Smart City development, is offering unlimited opportunities for foreign investment as the new State of Andhra Pradesh looks set to become India’s modern gateway to east and southeast Asia, says Jack Ball

INFRASTRUCTURE As part of Prime Minister Modi’s dynamic vision for India’s future as a global commercial hub, the Indian Government has launched the Smart City Development Programme, designed to create first class cities for a modern India. Amaravati in the State of Andhra Pradesh is set to be ten times larger in scope and vision than Singapore (widely regarded as the most successful Smart City to date). Amaravati is India’s fifth planned state capital city and has been conceived as a result of the 2014 Andhra Pradesh Reorganisation Act that split the existing state of Andhra Pradesh into two. India’s newest 29th state, Telangana, was formed, leaving the residual smaller state of Andhra Pradesh standing at 160,309 sq.km in size and spanning 974km of India’s eastern coastline with Amaravati as its capital. Coined the ‘People’s Capital of Andhra Pradesh’ by the state government, the city’s development agenda is ambitious. With a population just shy of 50 million, world-class levels of infrastructure will provide a backbone for development in the State, offering unrivalled opportunities for all manner of industry to flourish. It will be the first State in southern India to offer round-the-clock power to industry, with a particular focus on renewable energy projects. In terms of connectivity, and in addition to the six currently in operation, six ports are under development and a further four are in the planning stages. Complimenting six existing airports, a new Aerotropolis and five ‘no frills’

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chosen to be the capital of Telangana (although for the next ten years between 2016 and 2026, Hyderabad will remain the de jure capital of the smaller Andhra Pradesh). With Mr Naidu now leading Andhra Pradesh’s development agenda there is confidence that he can recreate the success of Hyderabad in the form of Amaravati. EASING INVESTMENT Chief Minister Naidu’s policies to boost vital foreign investment into the State have been everything but traditional. The State Government now boasts a Single Desk portal that aims to have all approvals to set up a new business obtained within 21 days, as well as an online facility for tracking the progress of investments. There are also specific country desks for respective partners, a fully operational online system for legal registrations and renewals, and a web-based advanced query system to identify industrial land, connectivity and infrastructure. In terms of tax regulations, a 2014 Deloitte survey revealed that both India and China have the most complex tax structures. This is, of course, a valid concern for potential investors. However, further to Mr Naidu’s policies to simplify industrial protocol in the state, Andhra Pradesh has now

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airports are to be developed, as ‘WHAT WAS INCREDIBLY well as 45,000km of road and GRATIFYING WAS THE 7,040km of rail networks. FACT THAT THERE WERE In Amaravati alone, more than SO MANY UK COMPANIES 1.5 million jobs are to be created, OUT THERE ALREADY. ’ supporting a resident population ALOK SHARMA, UK PRIME of around 2.5 million by 2050. MINSTER’S INFRASTRUCTURE Nearly 115km of public transport ENVOY TO INDIA corridors and 650km of road networks will form the bulk of the city’s new state of the art infrastructure. Additionally, to protect Andhra Pradesh’s unique cultural identity, a heritage and tourism network of roads, waterways and a metro of over 200km will also be developed. The visionary behind Andhra Pradesh and Amaravati, as a leading jewel in India’s wider Smart City development agenda, is the State’s Chief Minister Shri Chandrababu Naidu. Chief Minister of Andhra Pradesh between 1995 and 2004. Prior to bifurcation, he has been attributed with the development and subsequent success of Hyderabad, an IT and technology hub in its own right. A city whose economic growth has also boomed as a result of its manufacturing, tourism and biopharmaceutical strengths, Hyderabad was

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implemented another online system for registrations and return filing under VAT and other state taxes in the hope of clarifying procedures. They have largely come off the back of Prime Minister’s Modi’s ‘Make in India’ workshop in December 2014, whereby state governments agreed to a ‘98 point plan’ for business reforms at state level, aimed at enticing future foreign investment into India and reduce the regulatory burden on those businesses hoping to operate in the country. A 2015 World Bank Assessment Report illustrated the results of his efforts. Andhra Pradesh scored an impressive 70.12 per cent in terms of the states’ overall implementation of the agreed reforms. The State was beaten only by Gujarat, which scored 71.14 per cent. An ‘India in Business’ 2015 federal government mirrors these achievements. It highlights how the state is leading nationally in creating a conducive business environment. Andhra Pradesh leads in double digit figures in areas such as labour regulation compliance, land allotment and obtaining construction permits, environmental procedure compliance, ease of setting up business and registering and complying with tax procedures. The State’s reforms are a symptom of the wider

efforts by the Indian Federal Government to increase competition among individual states, a process commonly referred to as competitive federalism. Simply, this policy refers to the encouragement of states at the localised level to compete directly amongst each other for foreign investment in industries that are pertinent to their economic needs or development agendas.

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THE UK AND ANDHRA PRADESH Speaking at the UK India Business Council’s March 2016 event showcasing investment opportunities in Andhra Pradesh, the UK Prime Minster’s Infrastructure Envoy to India, Alok Sharma, commented on the UK’s continuing relationship with India: “I’ve recently come back from a week’s visit in India and had the pleasure of speaking at the ‘Make in India’ conference. What was incredibly gratifying was the fact that there were so many UK companies out there already. This shows that our relationship with India is actually very strong. It is one that goes back a long way and is also incredibly deep.” Trade figures between the UK and India support Mr Sharma’s assertion. Of the £48.04bn total G20 investment into India between April 2000 and March 2015, £14.43bn came from the UK. This makes the country the largest single contributor of Foreign Direct Investment (FDI) into India. Currently the largest UK investment industries are Chemicals and Drugs & Pharmaceuticals, standing at 26 per cent and 17 per cent respectively. Mr Sharma also highlighted the UK’s contribution to develop Amaravati as part of the Indian Government’s Smart Cities Initiative. Touching upon Prime Minster Modi’s visit to the UK in November 2015, Mr Sharma noted the UK’s continuing cooperation with the Indian Government, citing Amaravati as a particularly exciting prospect for those UK companies with expertise in infrastructure and urban planning and transport (of the £6.49bn worth of opportunities valued in Amaravati by 2020, £3.09bn lie in urban transport). Indeed future collaboration in these sectors has been an important facet of the UK and India’s healthy industrial relationship. “The UK Prime Minister decided that our relationship on infrastructure was so important that he needed to appoint an individual to help facilitate that work going forward. I’m very much looking forward to working very closely with both the Union Government and state governments to make sure that we push further on our joint work on infrastructure development,” Mr Sharma explains. And, given his pivotal role in successfully developing Hyderabad, Chief Minister Naidu is certainly up to the task of making Amaravati into a first class ‘Smart City’. “One thing that I will take

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from the meetings I have had with Chief Minster Naidu is not just his vision, but his energy. He is someone who has a history of getting things done and we look forward to working with him on the planning and execution of an incredibly successfully project at Amaravati”, says Mr Sharma. It is Mr Naidu’s vision for Andhra Pradesh to be the preferred logistics hub, and the country’s gateway to east and southeast Asia by 2029, that is driving the development for Amaravati to lead the state well into the 21st century. Chief Minister Naidu echoed these sentiments; “Both Prime Ministers are very keen to promote India and the UK in a big way in the near future. There are so many memorandums of understanding (MOUs) between us to make Amaravati into a Smart City and I’m very happy and thankful to the Government of the UK for including Amaravati in the list of Smart Cities. The UK has a very strong base in technology and also has some of the best practices.” He also touched upon the UK’s shared values and India’s expanding economic importance globally: “India is the gateway between east and west. Sixty-five per cent of India’s population is under 35 years of age. No other country can enjoy this privilege and no other country is going to compete with this advantage. India and the UK have many similarities; we are some of the oldest democracies. With Britain’s role in India, our people are well versed in English and this is one of the best advantages that India and the UK share today.” According to the 2011 census, the official urban share of the Indian population stood at 31 per cent. The Agglomeration Index – an alternative measure of urban concentration – estimates that the share of India’s population with ‘urban-like’ features measured by population density, population and travel time to the city centre actually stood at 55.3 per cent in 2010. And urban areas are expected to house 40 per cent of India’s population, whilst at the same time contributing nearly 75 per cent towards India’s total GDP. The Government’s mission aims to promote cities that provide core infrastructure, give a decent quality of life to its citizens, a clean and sustainable environment and application of smart solutions. The focus is on sustainable and inclusive development, looking at compact areas, and creating a replicable model that will act like a lighthouse to other aspiring cities. Amaravati looks set to fulfill this promise.

WHAT NEXT? Visit www.amaravati.gov.in

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Amaravati by day

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Healthcare in India is expanding rapidly, and integrated, innovative and affordable solutions are the way forward, as Dr Pramod Prabhakaran at the Central and Northwest London NHS Foundation Trust tells Sarah Cartledge

Standardising care in India HEALTHC ARE India’s healthcare system has a number of innovative high quality institutions. However, standardised high quality care for the masses remains an issue as the country moves forward. Demand for better access to safe, effective and affordable healthcare in India is increasing as both incomes and popular expectations rise. “Healthcare in India is expanding considerably and quickly. But the expanding middle class want easy access to high quality healthcare with better affordability,” says consultant Dr Pramod Prabhakaran, Division Medical Director and International Lead at the Central and Northwest London NHS Foundation Trust (CNWL). With the NHS’s 68 years of experience in providing high quality standardised care across the UK, the CNWL NHS Foundation Trust is now building partnerships with India’s healthcare system to help the country build a more effective, accessible and regulated healthcare system. With hundreds of courses and placements on offer, CNWL is a leader in medical, nursing and allied health professional education across Northwest London and attracts increasing numbers of international healthcare professionals seeking NHS training. “The challenge in India is how to bring a kite

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mark or a trademark to an institution that indicates to the public the care they are receiving is the same across the whole system,” he explains. “This is particularly relevant to the primary care system. India needs an excellent standardised primary care.” But many professionals in India’s healthcare network are trained through a variety of sources making it difficult to regulate the standard of care available. The country’s healthcare system is also shifting its focus from communicable to noncommunicable diseases such as heart disease, cancer and strokes. Having trained for 16 years in both the NHS and Indian healthcare system, Dr Prabhakaran’s personal experience of India’s healthcare provision highlights the current disparities in care. “Last year I went home to Bombay and my seven-year-old daughter developed a chest infection. I ended up having to seek treatment from three healthcare professionals, with the last one being a large established hospital, where her treatment was better managed and she recovered,” he says. “People want to be assured of a healthcare standard so that they’re not having to go to three places to treat the same condition.”

Below: India trade mission

POLYCLINICS AND INTEGRATED CARE “In many parts of India people have to travel long distances to get to hospital,” he explains. “But now they want a comprehensive offering of enhanced primary care, including minor injuries, urgent care and some specialist care, supported by innovative technology to help access and communication.” This has been proposed in the form of polyclinics, healthcare facilities separate from the hospital but with trained doctors and nurses in primary care, as well as a variety of specialities providing out-patient care. “It is an assurance of not having to go to a large hospital and still receive the high quality that one would find there,” says Dr Prabhakaran. “If you had a number of polyclinics in a satellite model linked to a hospital, we could then populate the specialists from the hospital into the polyclinics too.” And localising this model within the Indian context has resulted in some promising

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Neonatal intensive care unit of a local hospital in Raxaul, Bihar

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developments. “We’re looking at ‘PEOPLE high quality partnerships for the WANT TO BE development of our Indian model. ASSURED OF A We will work with businesses, HEALTHCARE employers and training providers, STANDARD some of which have already been SO THAT THEY’RE NOT identified,” he says. HAVING TO GO TO THREE A strong desire to localise this PLACES TO TREAT THE care framework wherever possible SAME CONDITION’. means there is a great opportunity DR PRAMOD PRABHAKARAN for collaboration between high quality care and technology providers in India. “Our offer is to have high quality polyclinics supported by excellent health informatics and digital health solutions. But we don’t want a made in the UK solution; we would want to ‘Make in India’. We will bring our expertise to work with our local partners. This ensures the agreed framework between the Trust and its partners is sustainable once the initial investment of expertise from the Trust has been exhausted. “We also want to be able to take our staff out to India to teach, practice and train, as well as bring in staff from India to supplement their training in the UK,” Dr Prabhakaran continues. “As an organisation we can make healthcare work in every setting, whether that’s a leading hospital, primary care, a nursing home or the home of an

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individual patient. Our offer is to provide integrated, innovative and affordable solutions.” Dr Alex Lewis, previously Medical Director of CNWL, recently visited Delhi and Mumbai in India together with Pramod as part of a high level trade delegation. Alex notes: “We had the opportunity to meet some of the most influential healthcare leaders in India. The visit to both New Delhi and Mumbai afforded us the opportunity to engage with government officials, providers large and small, and other interested parties. What became clear is that at many levels, the needs of the people of India and those in the UK are the same, with our solutions of access, affordability and quality resonating with most, if not all, of those we met. “We look forward to continuing our engagement and relationship with India and the healthcare sector, which we feel will build on our success as part of this mission.”

WHAT NEXT? Contact Dr Pramod Prabhakaran at pprabhakaran@nhs.net

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Analysing Indiaâ&#x20AC;&#x2122;s Investment Treaties: Implications for investments 44

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India’s Bilateral Investment Treaties are playing a signifcant role in attracting much needed Foreign Direct Investment into the country, say Rupa Chanda, Indian Institute of Management and Dr Pralok Gupta,Indian Institute of Foreign Trade

FINANCIAL, LEGAL & PROFESSIONAL Since 1994, India has signed 83 Bilateral Investment Treaties (BITs), also known as Bilateral Investment Promotion and Protection Agreements (BIPAs). Of these, 72 have come into force. These agreements seek to provide conditions that promote foreign investment in India. However, in recent years, several foreign companies have filed, or threatened to file, dispute notices under these treaties. These filings compelled India to review its BITs and to come up with an amended model BIT in December 2015. This article will examine the important features of India’s existing BIT and the newly released model BIT, as well as assess how effective treaties have been in attracting FDI into India.

Indian Government buildings, Raj Path, New Delhi

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KEY FEATURES OF INDIA’S BITs India’s BITs do not give companies the right to make investments in India. First, the investments have to be made and only then can any rights under the BITs be exercised. A close examination of the various provisions of India’s BITs reveals three important features: 1 There is an overall commonality in approach and structure, as all of them have a basic framework which covers provisions such as Definition, Most Favoured Nation (MFN), National Treatment, Settlement of Disputes, Subrogation, Entry and Sojourn of Personnel, Repatriation, Promotion and Protection of Investment. 2 There appears to be slightly greater coverage under the BITs with developed as opposed to developing countries. 3 The coverage of provisions is broadly the same in India’s BITs and in its investment chapters under comprehensive trade agreements. Across all the BITs, dispute settlement provisions are the most detailed provisions, with detailing regarding the resolution of disputes, constitution of

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arbitration tribunals, timelines, allocation of costs involved, etc. Some of India’s BITs contain additional clauses such as sharing of costs, permissibility of compensation, specifying that the treatment of taxation matters would take place under a particular DTAA, for example. By and large, the structure and contents follow a similar pattern across the BITs with customisation of selected provisions for some partner countries. FREE TRADE AGREEMENTS A comparison of India’s BITs provisions with those under investment chapters, in its existing comprehensive Free Trade Agreements (FTAs) with Singapore, Korea, Malaysia and Japan, reveals considerable similarity in scope and content. However, there are some noteworthy differences: 1 The investment chapters in the FTAs tend to include more exceptions and carve-outs, as well as references to social and environmental measures, which provide a strong basis to balance investment protection with the host state’s right to regulate. 2 FTA investment chapters do not contain specific investor promotion and protection clauses, which are present in BITs. This clearly highlights the primary focus of BITs on investment promotion and protection, as opposed to the broader integration objective of FTAs. 3 While BITs contain dispute settlement provisions between the state and the investor, under FTAs there is only scope for disputes between signatory parties, i.e., the governments. 4 There are some ambiguities in case of co-existing trade and ‘OVERALL, investment treaties with a DISCUSSIONS partner country. This allows WITH UK similar provisions to be BUSINESSES interpreted differently under the INDICATE two agreements. THE IMPORTANCE OF 5 Precedence between the two THE REGULATORY treaties is not clarified, nor are ENVIRONMENT FOR the terms and conditions for ATTRACTING FDI.’ precedence or carve-outs RUPA CHANDA explicitly mentioned. Overall, investment provisions under the BITs are more foreign investor-friendly than those under the FTAs INVESTMENT DISPUTES India has recently seen a spate of disputes filed against it by foreign investors. A total of 12 known and 17 estimated treaty claims have been filed against the nation, putting India 11th on the list of countries with investment claims in the world. These disputes include the notable cases of White Industries, Vodafone and Khaitan Holdings Limited. An analysis of these disputes reveals that a variety of factors pertaining to the BITs texts, such as

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outdated BITs provisions and ambiguities regarding their scope and interpretation; failure to reflect new issues and ways of doing business in these agreements; and failure to anticipate loopholes and inconsistencies across different kinds of treaties, have contributed to the recent increase in cases filed against India. The Khaitan case revealed the inadequate guarding of MFN provisions in India’s BITs by not incorporating adequate exceptions. It also implied that inordinate delays in Indian courts in disposing matters related to a foreign investor can, potentially, violate India’s BIT obligations. This is not due to the violation of ‘denial of justice’ but due to a violation of the ‘effective means’ standard, which requires a lower threshold than ‘denial of justice.’ Also, a tribunal can find a violation of the ‘effective means’ standard, even when the concerned BIT does not contain such a provision, as long as it contains a broad MFN provision which can be used to import investor guarantees from other BITs1. NEW MODEL BIT India’s new model BIT was made available for public comment in April 2015, and the final

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version was released in December ‘THEREFORE 2015. The draft model BIT THE NEED released for public comments OF THE HOUR was heavily biased towards IN INDIA IS safeguarding the Government’s TO INITIATE interests, but the final version has POLICIES TO IMPROVE toned down many of its provisions THE BUSINESS CLIMATE.’ and has thus tried to balance the DR PRALOK GUPTA interests of investors as well as each state. It is structurally different from the 2003 model treaty and contains several new provisions such as standard of treatment, transfers, obligations of the home and host state, anti-corruption obligations, disclosures, taxation, compliance with host state laws, security exceptions, and relationship with other treaties. It has four important differentiating features compared to the earlier model BIT: 1 It narrows the scope for disputes by changing the definition of investment. 2 It excludes measure by local government, taxes, government procurement, subsidies and IPRs from its scope and thus carves out important

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areas prone to investor disputes. 3 It puts emphasis on the exhaustion of local judicial remedies within a period of five years before any dispute can be taken for international arbitration, and 4 It clarifies that the rights and obligations under other existing agreements will not be affected by the BIT. PERCEPTIONS OF UK INVESTORS Discussions with existing and prospective UK investors in the Indian market reveal that the BIT has not been instrumental to the investment relationship. While the BIT adds some legal certainty and predictability to the regulatory environment in India, the major constraint facing UK and all foreign investors is the difficult business environment. This is also reflected in various ‘Doing Business’ index parameters, including starting a business, paying taxes, and enforcing contracts. India also compares poorly on governance parameters, including civil justice and judicial efficiency, which have a bearing on the investment climate. Overall, discussions with UK businesses indicate the importance of the regulatory environment for attracting FDI and that a BIT cannot fundamentally change the prevailing perception among foreign investors about a country. UK businesses and legal professionals also expressed their concerns about the new model BIT of India in terms of its relatively more pro-state as opposed to investor orientation. Key issues highlighted include the narrower definition of investment, the blanket carve-outs of key measures such as taxes and IPRs, and the requirement to exhaust local judicial remedies. LOOKING AHEAD BITs can make little difference to FDI inflows in the absence of a streamlined business environment and without further liberalisation of border and behind-the-border barriers. While there is a need to balance private investors’ rights and sovereign rights in the context of India’s BITs, any changes in India’s approach to BITs should not go to the other extreme and become too narrow in scope and protectionist in orientation. Therefore, the need of the hour in India is to initiate policies to improve the business climate, and to use BITs to provide an extra layer of legal certainty and protection to foreign investors.

Ranjan P (2012), ‘The White Industries Arbitration: Implications for India’s Investment Treaty Program’, Investment Treaty News, International Institute for Sustainable Development 1

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The UK and India – an unbeatable team Founder of Cobra Beer, Lord Bilimoria, explains why the UK and India are a dream team, and why UK SMEs should be setting their sights on the country

INTERVIEW An Indian immigrant and founder of Cobra Beer, Lord Karan Bilimoria continues to be an invaluable asset to the UK as the country continues to strengthen its commercial ties with India. He is currently one of a group of ambassadors within Britain’s business community to the International Festival for Business 2016 (IFB2016) in Liverpool. The event is backed by the UK Government and brings together thousands of global businesses, making it the world’s largest business festival where companies can enjoy an international platform to connect, network, strike deals and conduct international commerce.

“I was involved in the first International Festival of Business in 2014 which was very London-centric. Since then there has been a resurgence in cities such as Manchester, Leeds and Liverpool, so when Liverpool offered to host the IFB 2016 I thought it was a wonderful idea,” says the life peer who has more than 30 years’ experience of operating in both the Indian and UK markets.

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“IFB is a catalyst for promoting the regions and showcasing opportunities all over Britain. It’s a great way to bring in businesses from around the world, including India.” INDIAN LINKS Raised in India and with three generations from both sides of his family educated in the UK, Lord Bilimoria’s family history exemplifies the historical ties that both countries share. “My father’s father was one of the few Indians to be commissioned at Sandhurst Royal Military Academy in 1931; my mother went to Birmingham University as did her brother who did his PhD there.” Given his family’s extensive history with the country, Lord Bilimoria came to the UK at 19. “I felt incredibly at home here,” he says. “Indeed I was the third generation to be educated in England.” Qualifying as a chartered accountant in the City of London, he then went on to complete his law degree at Cambridge University. It was after his return from leading the University’s polo tour to India as captain when his entrepreneurial spirit began to take shape. “The polo stick makers in India asked me to sell some in England, so I bought the sticks and started to try and sell them here. I then got my first

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‘I SAY TO EVERY COMPANY, WHETHER YOU ARE BASED IN THE UK OR INDIA, THAT YOU HAVE TO THINK GLOBALLY FROM DAY ONE.’

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‘I REALISED THAT I DIDN’T WANT TO PRACTISE LAW AND I DIDN’T WANT TO BE AN ACCOUNTANT – I WANTED TO START MY OWN BUSINESS WITH THE IDEA OF COBRA BEER.’

COBRA BEER Given his first taste of successfully operating his modest import operation from India, it came as no surprise that Lord Bilimoria opted not to pursue a career in law following his degree at Cambridge. “I realised that I didn’t want to practise law and I didn’t want to be an accountant,” he says. “I wanted to start my own business with the idea of Cobra Beer.” This idea was simple and stemmed from his student years carefully fostering his love of beer. “I found many lagers very fizzy, gassy and quite harsh. But I loved the English ales; to this day I’ve always liked the well-known brands like Hook Norton, Sam Smith’s, Young’s or Fuller’s.” It was at this point that he decided to build the unique Cobra taste, unifying his preference for a smooth ale taste and the refreshing quality of a lager to create the perfect accompaniment to Indian food, which can often be spicy to a European palate. From the outset, the notion of building a truly global Cobra brand was imperative and one that Lord Bilimoria still maintains as critical to all commercial success to this day. “We wanted a globally appealing taste to somebody who liked American, European or even Japanese lagers.” To date, Cobra has won 83 gold medals, making it one of the most awarded beers in the world. It is manufactured in three locations in India, two in Belgium and in the UK, and it is exported to countries all over the world. “I say to every company, whether you are based in the UK or India, that you have to think globally from day one. In order to go global you’ve got to

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customer to pay me half the money up front for the first order.” Operating out of his flat in Fulham and building upon his initial success of selling his polo sticks, Lord Bilimoria then expanded his import business from India. “After we started selling the sticks to Lillywhites and Harrods, I then imported other products from India including high fashion items that we sold to stores in Knightsbridge, one of which was Princess Diana’s favourite boutique. We then began to sell leather goods to Selfridges.”

have the right attitude. You must continuously aspire to grow, to achieve all of the time and against all odds.” IFB2016 It is with his message of exporting and encouraging businesses, particularly at the SME level, that has led Lord Bilimoria to become one of a select group of ambassadors for IFB2016. Building upon its launch in 2014, the 15-day event is designed to highlight British capabilities from all corners of the UK and help businesses from around the world build connections and strike deals. It also helps foreign businesses appreciate the commercial opportunities available to them outside of the London market. With key growth sectors represented, there are plentiful opportunities for those businesses coming from overseas to partner with UK companies. These include 80 world-leading conferences and seminars, over 30,000 delegates from over 100 countries and free one-to-one appointments with suppliers, buyers and investors via the International Festival for Business Club. “I encourage businesses to go to the IFB2016 because you learn so much and you can do so much networking. There is the chance to meet businesses from all over the world and you make amazing contacts. So it’s a great opportunity for British businesses to showcase our best capabilities in every field you can imagine. Let’s bring people to Liverpool, not just to promote Liverpool, but the UK outside of London.”

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Public-Private Partnerships Unbundled John Davie of Altra Capital has been devising PPP strategies for more than 20 years. In this invaluable handbook he demystifies the process and provides expert guidance at all stages.

The PPP Book is considered to be one of the definitive guides to the multifaceted and integrated ecosystem required to deliver successful PPP projects.