By Dipankar De Sarkar, IANS
London : A quarter of a century after Japanese car companies boosted Britain’s economy under Margaret Thatcher, India is being seen as the country that could do an “encore”, with Britain’s minister for trade and investment saying that the next generation of investment wouldn’t be powered by a Nissan, “it’s going to be a Tata”.
Lord Digby Jones arrives in New Delhi Monday with a power-packed delegation representing 60 major British companies, 26 of them from the car industry. The visit is in two stages: the first is to focus on striking business deals in automotive, infrastructure and environmental industries and the second will follow as part of Prime Minister Gordon Brown’s delegation.
Jones, whose background is in business, wants Indian companies led by the Tata Group to bring the “second generation of inward investment” into Britain – just as Japanese carmakers did 25 years ago during the Thatcher years.
“If you look at Nissan, opening in Sunderland in 1983 – 25 years ago – within three or four years and within four miles of the plant, the top 10 auto component manufacturers in the world were there, making bits and selling them to the Nissan factory,” Jones told IANS in an interview.
“Not one was an Indian or Chinese company. They were large American, German and Japanese companies, and they created huge investments in Britain – lots of jobs – paid corporation tax, built schools and hospitals.
“What we are looking for is an encore to that success story. I would call it the second generation of inward investment into this country.”
Nissan’s setting up in Britain was a major economic success story of the 1980s, following sweeping economic reforms introduced by the ruling Conservative Party under Prime Minister Margaret Thatcher. The keys to the first car that rolled off the Sunderland plant were given to Prince Charles and Princess Diana.
Although the 25 years since then have seen the sell-off of Britain’s best-known car models, including Rolls Royce, MG Rover, Lotus, Jaguar and Land Rover, the car industry itself has been roaring under foreign ownership – partly as a result of Thatcher-era reforms such as a single union representing all workers in a plant.
Now, says Jones, India and Britain ought to forge a new partnership in manufacturing, which would be based upon the knowledge economy and complementary skills.
Giving the example of the tie-up between Britain’s Ultra Motor and India’s Hero Group to produce environment-friendly electric mopeds in India, Jones said he wants to do the reverse so that Indian companies can set up in Britain and manufacture for British companies.
Taking what he calls a “rifle rather than shotgun approach”, he has targeted India’s Rico Auto Industries to spearhead such a move, with Tata Motors poised to buy out the British marques Jaguar and Land Rover from the US company Ford.
“What we want to do is get Rico to bring their expertise and their knowledge to Britain. When you read, as I do, that Tata may well buy Jaguar, and they own Corus, and the major component of a motorcar is steel, you’ve got to start thinking to yourself, ‘there’s something made in heaven here – a match’,” Jones said.
“What I’d love to happen is that Rico makes things in Britain and sells them to Tata in Britain – you need a launch.”
“I want Tata to be followed by components manufacturers, and companies that train people, just as 25 years ago they all followed Nissan into Britain.
“The next generation isn’t going to be a Nissan, it’s going to be a Tata,” Jones added.
The British minister will focus on two other areas during his stay in India – Britain’s expertise in raising finance through ‘public private partnerships’ (PPP), particularly for India’s infrastructure sector, and British green technologies that he said could be financed through multilateral agencies.
However, Jones said Indian protections in the legal, accountancy and banking sectors presented a “blockage” toward raising private finance, pointing out that India granted only 12 licences for foreign banking operations in all of 2007.