The Indians are coming.........

With attention focused on the woes of the euro (and as Confucius said ‘Few things in life are more agreeable than seeing your neighbour fall off his roof), little has been paid to a major trend in Britain, which has been stealthily attracting foreign direct investment from where it counts for the future – the emerging markets, particularly India.

Last year the UK was the recipient of around £80 billion in foreign direct investment by way of acquisitions by the emerging markets. This is proportionately 4 times FDI in the US.

TATA, the Indian conglomerate, has, over the last 10 years, acquired Jaguar- Land Rover which is now having record sales and profits, and expanding its work-force when nobody else could make a go of it. It has Tetley Tea, Corus, the rump of ICI and goodness knows what else. It is Britain’s largest manufacturer, bigger even than British Aerospace, with around 40,000 employees. TATA Consultancy also employs nearly 5000. And they are not newcomers. They opened their first operation in UK in 1907.

Of course, Britain has a particular attraction for Indian investment. There is a multitude of historical, economic, social, sporting and other ties. In essence, India and Britain are joined at hip and thigh, as the saying goes. The enduring gifts of the Raj were the English language and the English common law – and cricket! There are over 5000 words in the OED which are of Indian origin – bungalow, khaki, askari, char etc. There is a large population of Indian origin. London has one of the largest Hindu temples outside India. Indians integrate well into UK society and intermarriage is not infrequent as it is with other races. They are law-abiding, industrious and enterprising. They also feature prominently in the Sunday Times ‘Rich List’ including No 1!

An Indian woman features in the list almost as a parable of individual enterprise. She came to England as the wife of a doctor. She tried a ready-made Indian dish in a supermarket and pronounced it to be rubbish. When she told the supermarket bosses, they said if she could do better they would sell it. So she did. And they did. And now she’s in the Sunday Times ‘Rich List’ of women.

Cemex (Mexico) now owns Ready-Mix Concrete. Thais have reopened a steel-works up North. The Japanese own Pilkington Glass. General Electric have Amersham Life Sciences, Telefonica has O2, and so it goes on.

The fact that foreign-owned factories tend to be much more efficient (Honda, Toyota, Nissan) leads to the inevitable conclusion that British industry was ruined in the 70’s by a toxic combination of megalomaniac union bosses and weak management. British workers, properly led, are as good as any.

Europe tends to be avoided. They have ‘national champions’ that their governments prefer to subsidise rather than be acquired by beastly foreigners. France, for example, declared yoghurt to be ‘strategically important’ when there was a bid for Danone. Long may it continue.

And the Chinese are coming, too.

Britain has just signed a double-taxation agreement with China. This will help British investment in China.

But it will also entrench the UK as the world’s biggest tax haven by the creation of ‘special purpose vehicles’ for vast amounts of Chinese money-laundering.