In a drab 1960s office block on the unfashionable Pinner Road in Harrow, North
London, a dozen or so lab technicians in white coats are poring over
clinical research for Intas Pharmaceuticals.
The $150 million company was set up more than 35 years ago in the western
Indian city of Ahmedabad by Hashmukh Chudgar, but it spread its wings into
the British market five years ago at the behest of Nimish, Binish and
Urmish, the founder’s sons.
Their office is unremarkable, hidden away in a grey world of semidetached
mock-Tudor homes, a parade of shops and careworn commuters trooping on and
off the Metropolitan Line.
But Intas is not only extraordinary in itself as the largest contract
manufacturer by volume of generic drugs to the EU. The Chudgar family
business in sprawling suburbia also represents a creeping counter-offensive
that promises to transform the British economy: Indian insourcing.
The Anglo-Indian relationship is still so dominated by memories of Empire –
the novels of E. M. Forster and Rudyard Kipling, television series such as
The Jewel in the Crown, not to mention the cricket – that it is all too easy
to see the ties between Britain and India through the prism of the past.
In the first wave of immigration, they came seeking a better life as
shopkeepers, traders and restaurateurs. Today Indians are arriving as
bankers, scientists, PhD students and software engineers.
Seventy miles from Harrow, to the west of the Fens, India’s biggest software
services provider has taken over the old Pearl Assurance call centre on the
edge of Peterborough, in an even larger concentration of Indian capital in
unexpected quarters. From its “innovation lab”, Tata Consultancy Services
(TCS) provides software solutions for a host of blue-chip companies,
including British Airways, Virgin Atlantic, National Grid, Welsh Water,
United Biscuits, Norwich Union and AXA.
More than a thousand employees, a third of whom are Indian, work on high-end
technology projects for clients, including a leading media company that is
aiming to rival the dominant digital television provider.
The £5 million facility has 18 British companies in the pipeline and a
potential order book value of about £120 million.
Mike Scott, the mathematician who heads the centre, has spent almost his
entire career with British Telecom. He is an evangelical convert to the
Indian way of doing business and, happily, his old employer is now TCS’s
biggest customer. “There is a massive intellectual power in India,” he said.
“It is amazing how bright and well trained they are. I saw nothing like it
at BT.”
As India bids for superpower status, it is having a transforming effect on the
British economy. The singular evidence of this was Tata Steel’s successful
£6.7 billion bid for the remnants of British Steel completed this year in a
deal that changed all foreign preconceptions of Indian enterprise.
This new view of India’s purchasing power was reinforced a few months later by
the £600 million acquisition of Whyte & Mackay, the world’s
fourth-largest whisky distiller, by Vijay Mallya’s UB Group.
But these deals tell only part of the story. Below the banner of big
headlines, Indian businesses are making inroads in a cross section of
industries from healthcare to auto components and software design to film
production.
They already own some of the most British of institutions, from steel furnaces
in Doncaster to the maker of the Queen’s favourite towels, and are casting
their acquisitive eyes over genteel favourites such as Jaguar. Yet the
process of Indian inward investment into the UK has only just begun because
the Indian outward journey is still in its infancy.
India is the future workforce of the world: half the 1.1 billion population is
under the age of 25, and its 14 million-strong pool of young professionals,
replenished by 2.5 million graduates a year, is nearly twice the size of
both China’s and America’s. By 2025 India will eclipse Germany as the
world’s fifth-largest consumer, McKinsey, the consultancy firm, predicts.
India’s invisible hand has been at work in British business for some time, but
because of a comfortable bilateral relationship, rooted in the shared –
albeit uneven – experience of imperialism, it is only just coming to notice.
Think London, the foreign direct investment agency for the capital, says that
India is the second-largest investor by projects after the US. Sixteen per
cent of the £52 billion that flows into London each year comes from India,
creating 634 jobs from 19 projects last year. These figures are impressive
even before you consider that they do not include the Corus and Whyte &
Mackay acquisitions. And they are symptomatic of a newly confident and
capital-rich India, which has entered the global market seemingly from
nowhere.
Before 2000, an Indian company had never made a significant overseas
acquisition. However, according to McKinsey, Indian companies bought more
than 100 foreign businesses during 2005 for $4.5 billion.
“Once they have taken the decision to move out of India, the world is their
next market,” Kevin Gold, managing partner at the London law firm Mischon de
Reya, said.
Indian entrepreneurs, freed from the capital constraints of their
predecessors, are suddenly taking flight from their domestic markets. London
is often their first stop and is increasingly a bridgehead to continental
Europe.
“India is generating newfound wealth,” Sunil Dwivedi, head of India at Think
London, said. “It wants a world platform and London is the natural choice
because of historical and language connections. We have seen this coming for
at least three years.”
This year India’s total outbound M&A investment may exceed the $30
billion target for inbound investment, according to Ernst & Young and
the Federation of Indian Chambers of Commerce and Industry. Investment by
Indian companies into the UK has already eclipsed investment into India by
British companies.
“There is an amazing reversal in the tides of capital flows,” Naina Lal
Kidwai, HSBC India chief executive and the first Indian woman to graduate
from Harvard Business School, said. “You don’t see a Corus happening every
day, but the trend continues. Indian companies see London as a gateway to
Europe.” Small to medium-sized businesses represent the fastest-growing
sector, particularly in private wealth management, retail banking and
reinsurance. There are more than 10,000 Indian-owned businesses in London,
employing 49,000 people. “If the Tatas can do it, smaller companies think
they can do it, too,” said Anita Nandi, head of the City of London’s India
office, which opened in Bombay in May to foster bilateral trade and
investment.
“Five years ago, they wouldn’t even have thought of getting out of their rural
markets,” she said. “Technology means you can be sitting in a village in
Madhya Pradesh but still doing business in London.” In pockets around
Britain, thousands of Indian companies are quietly thriving in an amenable
corporate environment where language and law are all terribly familiar.
“The UK values people who come to live in Britain on the work they do and not
their colour,” said Lord Paul, the Indian-born industrialist who is one of
Britain’s richest men 40 years after he settled in London. “Any immigrant
feels comfortable here, and Britain has gained because of its openness.”
Behind the complaints about white-collar jobs lost to sweat shops on the
sub-continent, Indian companies are making a significant contribution to the
Government’s coffers and advances in science and education.
TCS already generates about $800 million of its $4 billion global turnover
from the UK, where it is reporting year-on-year revenue growth of 45 per
cent. Employing 4,000 people in the UK, its economic impact is tangible. The
idea that it is draining money from the British economy is outdated.
Much like the East India Company believed that it would have a civilising
impact on India, Indian companies believe that they can import a superior
technical knowledge to make Britain a more efficient place.
“In the narrow context, people see the offshoring. They do not see the full
impact of our investment – the tax we pay, the academic institutions we
support,” A. S. Lakshmi, TCS’s UK head, said. “But I think all the major
political parties recognise we bring competitiveness to British companies.
We help them become nimbler and open their eyes to new opportunities.”
The empire is striking back, but the process of reverse colonialism is just
getting started in the remaking of corporate Britain.
Indian firms doing business in Britain
Tata (steel, IT, hotels, tea)
Wockhardt (healthcare)
UB Group (spirits)
ICICI (financial services)
Bharat Forge (auto components)
HCL (outsourcing)
Ranbaxy (pharmaceuticals)
Apeejay Surrendra (tea)
Monocon (refractories)
Cognizant (IT)
UTV (film)
Godrej (consumer goods)
Kotak Mahindra (broking)
Reliance (life sciences, telecoms)
Onwards, upwards
— India is the second-fastest-growing economy after China. GDP growth in first
quarter was 9.1 per cent. Full-year growth is expected to be at its
strongest in 20 years
— India has 36 dollar billionaires and 83,000 dollar millionaires. It also has
more than 200 million people who survive on less than a dollar a day
— Bombay’s unofficial population is 20 million. It is forecast to eclipse
Tokyo as the world’s most-populous city by 2020
— Per capita income in India will rise 26 per cent, from $831 to $1,021, this
fiscal year, moving it into the category of lower- middle-income countries,
as designated by the World Bank
— The UK is India’s fourth-largest trading partner behind the US, China and
Belgium
— India represents 16 per cent of the flow of foreign direct investment into
London
— There are 1.3 million people of Indian origin in Britain; 437,000 live in
London. The capital is home to 173,000 Indian citizens
— There are 160 multinational Indian companies in London. More than 10,000
Indian-owned businesses in the capital generated a combined turnover of
$14.4 billion, or 5 per cent of the city's economy. India is the
second-largest foreign creator of jobs in the UK, after the US
In ref to student preferring USA because of the the lack of equal opportunities how do you think Asian's born and bred in this country feel? We are disadvantaged in this country by being not the NEW (affluent) Indians and in India by not being Indian enough! no, I'm just an over educated , under employed immigrant with nowhere to go looking enviously at the opportunities in India. There is a huge swathe of bilingual Asian talent in this country which are ignored by the same multinationals wooing the new India and their talent. Could it be any more ironic.
nina, london,
History does bind both India and Uk, but the newfound confidence amongst Indian businessmen, born out of economic reforms, has led to expansion of economy. Near double digit growth rate has helped Indian companies to gfow and spread their wings.
The emerging trend is undoubtedly benefical to both the countries.
Dr Suresh Samani, ahmedabad, India
Well done India. Achieved by its own important resource - the people. No oil, but not hamstrung by religion - and a form of democratic stability seemingly unachievable in most Middle Eastern countries who should take note.
Whether the UK played a part in its past may or may not be significant - India has worked hard and educated themselves well since then in any case.
Meanwhile, we turn out thickies well versed in media studies.
Phil, Preston,
Your correspondent seems ot be of the mind that the East India company wanted to "civilise" India. I would put this down to ignorance if it were a common street-brat, but being a correspondent for the times, one should surely know better. The East India company's main aim was to rape the geographical entity known as India for all it was worth. India's share of world GDP dropped from a massive 21% to a pathetic 3% during the British Raj. Other than making Indian people hungry for progress and generally brighter for the miserable experience, the Raj certainly did not help India in any shape or form.
Neeraj Soman, Philadephia, PA
India's greatest jewels are her people. Indians work hard and contribute positively to the economies of any country in which they live, from the US to the UK.
It is possible to be positive about India without being negative about Britain. Come on Britain, stop acting like a churlish teenager at a grown-up party! Instead of looking back at "Midnight" of 1947, look at the Indian sunrise of 2007.
Dr T Shah, Aberdeen, UK
It is said that a virtuous enemy is better than a dishonest friend.Even if the India was used to feed the industrial revolution in Britain,it gained some important things like the foundations of parliamentary democracy,subservient armed forces,modern law and scientific temper.Besides,in one way or the other,except for the period from 1857 to 1914,Indians were part of the mechanism called Raj.Incidentally,many englishmen fought against British East India company and were employed by Marathas,Sikhs and others often as soldiers of fortune.This includes the british gunners who fought for Rani Jhansi in the most famous of Raj battles.
kumar, London,
It is and has to be two way process rather than thinking narrowly of call centers. Without any doubt the language has been a great contributor. I went to Switzerland to do my degree from India but could not be master of newly learned language. So I came to London and completed my degree in computer science and have never looked back. Today we Indians are the true ambassadors yet loyal to both countries and pride ourselves for being law abiding citizens of the host country. It is this background of democracy, secularism and respect for all religions. Our upbringing has been passed on to the younger generation to respect elders, push children for highest education with full financial and moral support. Above all most Indians don't take their religion over binding but private belief. We hope to continue contributing as well as benefiting from Indian community prosperity irrespective of religion.
Sunder Aswani, LONDON,
Make hay while the sun shines ... so the saying goes? In the 1970s, Paul Ehrlich cautioned against the forthcoming Malthusian nightmare in India in his tract, "The Population Explosion." Turns out he was too pessimistic.
Similarly, this euphoria and bonhomie about India's growth, assumes a linearity in the schema of global trade. This is premature jubilation. India's growth and China's ascendency must be seen against the analyses forwarded by organizations such as the World Resources Institute and Worldwatch. This global "boom" in manufacturing and services is unsustainable due to limited reserves of extractable materials. The loudest "boom" will be heard when this "boom" goes "bust".
So what gives? India and Britain, must jointly create their own version of The Giant Leap and A Cultural Revolution ... and create a "Sustainable Renewal Thrust" to create innovative ecological and economical solutions. Mere trade in consummables and services is not sustainable or enough.
Marvin Kendall, NYC, USA
Indeed, the railways and english language are often given too much mention than deserved. Why english language and railways didn't help India prosper or even fight poverty from 1947 to 1990s? There is lot more in India's past than British rule and in India's present than english language. Today's India is prospering due to good economic policies set in early 1990s, stable democracy, educated hard working ambitious young population and de-regularisation of a lot of bureaucratic strongholds. By connecting it to oppressive British rule 60 years back seems almost ludicrous.
Please let us forget the British raj nonsense. It is not a subject of pride to anyone in India or Africa or any part of world except may be few people in Britain who do not fully understand how much pain and suffering the British raj caused to world in those times. The history is behind us, let us build a better business relationship based on balanced trade interests and help both countries prosper and benefit.
Meena K, Bangalore, India
Indeed, the railways and english language are often given too much mention than deserved. Why english language and railways didn't help India prosper or even fight poverty from 1947 to 1990s? There is lot more in India's past than British rule and in India's present than english language. Today's India is prospering due to good economic policies set in early 1990s, stable democracy, educated hard working ambitious young population and de-regularisation of a lot of bureaucratic strongholds. By connecting it to oppressive British rule 60 years back seems almost ludicrous.
Please let us forget the British raj nonsense. It is not a subject of pride to anyone in India or Africa or any part of world except may be few people in Britain who do not fully understand how much pain and suffering the British raj caused to world in those times. The history is behind us, let us build a better business relationship based on balanced trade interests and help both countries prosper and benefit.
Meena K, Bangalore,
I feel often very surprised to see mention of East India company and British Raj on many of articles on modern India. I would say what is happening in India today has absolutely nothing to do with British Raj. In fact that part in history of India was one of the worst time of India in terms of social oppression, poverty and unrest. India was totally crippled financially by exploitation of British Rulers. When British left they very irresponsibly ended up partitioning India leading to further economic and social disasters. The journalists writing articles please stop glamorizing British Raj. Modern Indian young generation back in India will be furiously surprised if they come to know that most of the British media articles on modern India today end up giving some credit to British Raj.
Having said that almost every young generation Indian including me looks at Britain in very different perspective of a modern western nation full of potential business opportunities and friendly ties.
Durva Shiv, Bristol,
The article is very good and informative. It makes me proud of being an Indian. Gone are those days when Indian academic qualifications were looked down , and were evaluated to be much inferior. Not any more, thanks to globalisation.
However, I must say, we Indians enjoy living here. It is a great country which gives us hope, and our children are enjoying the benefits of British education. In the early seventies, I did not see a single immigration officer in Heathrow, but today, there are dozens, and they are the children of the first generation Indians, who came and worked in this country as labourers, and shopkeepers. This country gave them hope, and opportunities. Today Indians are the second richest community after the Jews.
GOD bless United Kingdom and India. I love them both.
T. Ghosh, Southall,
Please, don't try and validate the East India Company's notion that they could "civilise" Indian's by commenting on this within the same context of Indian companies thinking they can import superior technological to Britain. The regions that make up India had seen numerous cultural and civilising influences and a huge economic exchange being at the centre of the global economy which was based in Asia for much of "civilised" human history. For hundreds of years this was the case, well before indigineous Britons even dared venture beyond the coast of Northern France.
Andrew Campbell, Madrid, Spain
A very interesting article. At the beginning of globalization, when most of the Indian companies were scared of losing theeir market share to foreign companies are gone. Interestingly Indian communists and many of the Indian companies sang the same chorus together about problems of globalization.
In reality, the opposite thing is happening. globalization is having the highest impact on India. Even the Indian companies are modernizing themselves.
I will like to see more liberal ways of doing business between both UK India and US. More flexibility in bilateral trades, more collaboration in research and education and finally more competitiveness as a whole to both of them.
Good Luck!
Ravi, stockholm, Sweden
All is well. However the way British government changes its policies on immigration, encouraging and then discouraging and then encouraging and then discouraging again those who want to come and live here, is very poor.
As much as Britain needs India, many Indians want to come and live here too, will Britain absorb this influx....NO they wont. Atleast this is what the present policies confirm.
Dr P Mulay, Wadebridge Cornwall, uk
England should be proud of India's achievements. After all it was Britain, which laid the foundations of India's capital markets, education, railways, postal service, and last but not the least - the rule of law.
Nusrat, Crestwood, USA / New York
UK should have country specific exemption for Indians to immigrate. Irrespective of how much the Indian economy booms, there will always be a surplus of highly qualified professionals who will look to the world for a career. Further, they usually make good immigrants who provide value for their adopted communities.
Vijay, India,
Thank you so much for an insightful article and for something that will shape our future. The rise of India is the one of the greatest and unexposed stories of our time. An excellent article with the UK perspective.
Biren Bhatt, Copperas Cove, Texas/USA
There should be more colaboration in higher education. English is the official language of higher study in India. So, in medicine and engineering educattion, UK should contribute more in India (faculty exchange, teachers training...). USA has already beaten UK as preferred destination for engineering graduates.
Nikus, Bangalore, India
It is great information, it says upwards and I am sure the mutual associations are going to good for both....
Shiva, Bangalore, India
This facts-rich article proves the remarkable growth of India and its impact on the rest of the world, which can't be and shouldn't be ignored by the traditional giants. Good Luck India for its development and the rest of the world for joining in the process!
Mohammed, Lancaster, UK
Indians are not only shrewd business men and women, they are also professionals - Doctors,Lawyers, Accountants,
Dentists,University Lecturers,Professors,Writers etc..etc
all making their mark in this country.
A visit to the NHS will solid proof on my claim!
With their obsession on muslims, it's a scandal that the people of this country ignore the tremendous contribution made by Indians to this country...recognition is well overdue!
Satish Patel, London, UK
This is a fascinating and insightful piece. As a British businesman who has done business with India for a decade I really appreciate Ashling's objective and knowledgable piece that is prepared to cut across more established prec-conceived myths.
Nigel Lang, Bristol, UK
It is only the begining, and more is yet to come.
San Atri, Reading, UK