View from India: UK and India synergise to foster prosperity
India and the United Kingdom share strong economic and social ties. India is the second-largest investor in the UK. As of 2019, Indian companies in the UK generated 48 billion pounds and employed roughly 105,000 people. The UK is also the sixth-largest foreign investor in India, with a total investment of around $31bn (£23bn) to September 2021.
India ranks 46th in the Global Innovation Index in 2021 by the World Intellectual Property Organisation, and occupies 63rd place in Age of Doing Business as per the World Bank Ease of Doing Business 2020. Several factors have made India conducive for global investments. It’s not just the diverse business landscape or the fact that the country is one of the world’s fastest growing economies. The Government of India (GoI) has chalked out policies for economic growth. A case in point is the Make in India initiative and Production Linked Incentive scheme (PLI) among others. The Ministry of Heavy Industry & Public Enterprises has rolled out an Industry 4.0 initiative titled SAMARTH Udyog Bharat 4.0. The endeavour is a step towards the creation of a sustainable ecosystem for leveraging Industry 4.0 set of technologies in every Indian manufacturer by 2025, from multi-national corporations to large, medium or small-scale Indian companies.
The country is home to a large engineering base which can tap the Bharat 4.0 programmes. Moreover, there’s an increasing demand for fintech services which rely on Industry 4.0 technologies. In a nutshell, the government-led policy initiatives intend to improve the domestic market and make it on par with global competitors. The sum of all this has probably made the country a hub for investments. “A liberal foreign direct investment policy is an added attraction. Other highlights include procedures like the National Single Window System and the Industrial Land Bank for facilitating the Ease of Doing Business. India has achieved $400 billion exports in FY22 and most of it is from capital goods,” said Vimal Kumar, program director, Finovista, at the recent UK-India webinar on Digital Manufacturing and Connected Supply Chains.
The tides are favourable for foreign investors. Challenges of location have faded away as the pandemic has brought remote connectivity to the forefront. The country is home to skilled labour and a large youth workforce. Let’s not forget the internet has raised the aspirations of rural India. That’s one angle. The other is increasing urban migration. Both aspects have contributed to the consumer economy, which is a high-volume bracket. Global investors see potential in this. And with this comes a booming start-up ethos. “India has a vibrant start-up ecosystem, whose overall market size is estimated to be 320 billion. Start-ups, by their very nature, streamline their offerings. They can zero in on a particular area and tailor services accordingly. All this calls for an innovative bent of thinking,” added Kumar.
Some of the challenges such as healthcare, climate change and transport have compelled people to foster an entrepreneurial spirit and use technological interventions for chalking out real-time solutions. Rapid adoption of digital services and sensor-based applications has also enabled the growth of the start-up-entrepreneurial community. This is the story of New India, where innovative business models are being presented with gusto. Given this premise, it’s understandable that start-ups can attract overseas investors.
Reality check indicates that technologies such as blockchain, artificial intelligence, machine learning, augmented-virtual reality, mobile payments and apps lure investors. After all, these technologies have a game-changing impact on industries, as they have aided companies to keep in virtual touch with customers and vendors during the pandemic.
“In the auto industry, UK and India intend to explore newer materials and focus on battery management,” highlighted Kumar. “As for defence, the idea is to reinforce India as an export nation. India has expertise in technology. UK’s expertise lies in the manner in which research percolates to the industry. Both can benefit from one another.”
Telecom is another promising area. The UK-India collaboration may collaborate towards rural connectivity 5G deployment and rollouts. As for electronics, the intent is to conduct joint research on chip designing to minimise the use of the current critical metals.
No surprise that the UK-India Roadmap 2030 is for paving the way for deeper engagement in people-to-people interaction, commerce and economy, defence and security, climate action, and health. PLI and Make in India initiatives could open out opportunities for UK companies to work with Indian ones. Likewise, UK can tap India’s large SME base for making components. The UK-India synergy could be oriented towards bio-similar.
“The vision is to generate economic growth, drive business and support innovation through global collaboration. This can happen by raising the bar for domestic production to be on par with global standards,” observed Krunal Ramesh, innovation analyst - manufacturing and materials, Innovate UK.
The UK-India partnership is being encouraged through UKRI (UK Research and Innovation). Initiated in 2018, UKRI is a non-departmental public body sponsored by the Department for Business, Energy and Industrial Strategy (BEIS). It brings together the seven disciplinary research councils, Research England, which is responsible for supporting research and knowledge exchange at higher education institutions in England, and the UK’s innovation agency, Innovate UK. “UKRI aims to support research in UK and innovation through strategic partnerships with the Government of India (GoI) and other governments. UKRI’s joint funding with India has resulted in around 258 projects,” explained Geeny George Shaju, acting deputy director, UKRI India, British High Commission (BHC) India.
UKRI has collaborated with India for several projects. For instance, there’s the Joint UK-India Clean-Energy Centre whose purpose is to integrate photovoltaic and storage technologies for improving standards of living. One hopes such collaborations will dissolve silo operations, generate employment and validate technology at a global level. The sum of all this is meant to develop new market channels, build a customer network and strengthen the global value chain. We hope things will look up as the lockdowns have eased, travel is beginning to pick up and people are heading to malls and restaurants. One wishes that this bounce-back mechanism can bring in investments that could lead to newer frontiers in technology.
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