East and West Investments: True 2-Way Street

hague-osborneHistorically, it was western countries exporting to and investing in eastern countries. That has not been the case though for some time now. In the UK’s Chancellor of the Exchequer George Osborne’s recent statement, it was announced that £120m in funding is being allocated to new investments into India from the UK.

These days the west actively looks for investments in the east. Thus Osborne went with British PM William Hague to Mumbai to seek out investments. Some examples of these include: Cipla – a Mumbai-based pharmaceutical firm – to invest £100m into the UK for drug-based research; Mahindra – automotive manufacturer – investing £20m into the UK for the development of its electric vehicle technology, with the hope of having a car on sale in the UK within the next 12 months. JCB – construction machinery manufacturer – is set to open a further two plans in India. In total during the trip, the deals amounted to approximately £370 million (around Rs.3,800 crore).

In the military field, India’s Defense Ministry signed a contract valued at £250m with MBDA, the UK’s missile maker for “the supply of advanced short range air-to-air missiles (ASRAAM) to the Indian Air Force’s fleet of Jaguar aircraft.”

Currently, India is Asia’s third largest economy and has just encountered a political change of a new government led by Narendra Modi. Of this appointment, Osborne said, “I believe a stronger relationship with Britain will help deliver the new economic policy of the Indian government. Prime Minister Modi is seeking more investment in India’s economy – and I want British companies to provide it, and the British government to support it. Good days are coming for the financial partnership we can forge to build, literally, the infrastructure of the future.”

Since 2010 there has been an escalation in UK exports to India by 50 percent as well as an increase in imports by a third.