India’s British sterling success storyJuly 13th, 2008 - 12:46 pm ICT by IANS
By T.S.V. Hari
Chennai, July 13 (IANS) Indian businesses have created at least 19,000 new jobs in Britain in the past 12 months and helped save some 14,000 existing ones, British Deputy High Commissioner Mike Connor says. The 14,000 jobs saved were at the ailing Jaguar and Land Rover unit that Tata Motors acquired in Britain earlier this year, Connor told IANS in a chat here.
At the existing basic wage rate of six pounds ($11.9 or Rs.510) an hour for eight hours a day, these jobs translate into a minimum contribution of 530 million pounds ($1.05 billion or Rs.45 billion) a month to Britain’s economy. Annually, it works out to 12 billion pounds ($23.8 billion or Rs.1.02 trillion).
It is indeed a far cry from 1947.
India’s foreign exchange reserves then stood at Rs.15.47 billion (all held in pounds sterling) with the pound worth Rs.13.5.
But what India gives to Britain today is almost thrice that - or approximately 15 months’ wages to a workforce of 34,000 - at just two enterprises in Britain.
“Kindly desist from doing the math in Indian rupees,” the diplomat quipped.
“The salaries are more than double the minimum wages in sectors into which Indians have invested in the UK. Therefore, the figure ought to be much more.
“Bilateral trade between our countries is a two-way street at roughly eight billion pounds per year either way. The balance of payments is fair to both the sides,” Connor said.
“During the last five years, 5,290 projects have come to India and roughly a fourth of it came to the south with 10 percent year-on-year growth.
“Virtually 60 percent of auto parts manufactured in Sriperumbudur (60 km west of here) are products of British R&D. Even some of the transmission parts of Tatas’ Nano are manufactured to British specifications.
“The ever increasing outsourced jobs in India originating in Britain pay wages comparable with British and Indian PPP (purchasing power parity). Further, all British companies around Chennai are headed by Indians.
“Thanks to joint ventures like the Marks and Spencer with Reliance Retail one can buy clothes of British quality in India - at Indian prices.”
But there are a few blushes too.
Primark, a leading British apparel company, cancelled a sizeable order from Tirupur, Tamil Nadu, over allegations that the Indian suppliers employed child labour.
It’s a charge denied by manufacturers in India, but Connors called it an “aberration”.
“Being a signatory to the International Labour Organisation’s convention, British companies cannot source products that are manufactured with unfair practices. Virtually 99.99 percent of what is made in India is welcomed in Britain - be they goods, services or skilled manpower,” Connors said.
Companies of Indian origin registered in Britain can operate anywhere in the European Union, are taxed at only 28 percent, and can repatriate profits limitlessly, an aide added.
Out of a market cap of nine billion pounds ($17.9 billion) in companies of Indian origin in Britain, three billion pounds ($5.96 billion) were subscribed through the London Stock Exchange.
Britain offers India huge inputs of technology in mobile telephony, road and rail transport systems and shipbuilding yards.
One with British technology is coming up in Cuddalore, Tamil Nadu.
Three trade delegations offering major tie-ups are due before October. Dynamatic Technologies Ltd, (aerospace and automotive components), Symphony Services Corp (product engineering outsourcing services), Infosys, Wipro, Satyam and Dr Reddy’s Labs are among the larger Indian companies doing business in the UK.
“We even allot rent free business accommodation in central London for three months. Now that is something loved by thrifty Indian businessmen,” Connor said.
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