India

Lord Bilimoria Excerpts

Tuesday 18th October 2011 Lords Chamber

[Lord Bilimoria]

My Lords, 2011 is the 20th anniversary of India’s economic liberalisation. In 1991, India was a closed, protected, insular, inward-looking country and economy. Over the last 20 years, India has taken a gigantic leap on to the world stage as an emerging global economic superpower. As we have heard from the noble Lord, Lord Ahmad, while our economy is struggling, India’s GDP is today is growing at over 7 per cent.

In 2003 I was appointed the UK chair of the Indo British Partnership by the British Government. Subsequently I was the founding chair of the UK India Business Council and am now its president. I have been privileged to accompany our current Prime Minister and both his predecessors on their visits to India, and the relationship between Britain and India is today stronger than ever.

Trade between our countries has increased from £5 billion a year in 2003 to £13 billion today. However, we are just scratching the surface. As the Indian Cabinet Minister Kamil Nath said when I shared a platform with him in London last week, investment has to be a two-way street, and we have seen huge investment going both ways. As the noble Lord, Lord Loomba, said, Tata is now Britain’s largest manufacturer, owning Jaguar Land Rover and Corus, British Steel. We have seen giant investments going the other way into India—for example, Vodafone.

My own business Cobra Beer formed a recent joint venture with Molson Coors, the last of the global giant brewers to go into India, and we now own the only brewery in the state of Bihar. I am a director of Booker Group plc, a FTSE 250 company, and the original sponsors of the Man Booker Prize, which is being announced this evening. At Booker we have just opened our second wholesale cash and carry branch in Pune after having opened up in Mumbai two years ago.

This investment has been happening but it is against a backdrop where actually very few reforms have been taking place in India. The major reform of air service between the two countries opened up in 2004, and now there are over 100 flights a week, but there are so many other barriers and so many reforms we are crying out for. As the noble Lord, Lord Parekh, said, foreign universities still cannot operate in India. British lawyers cannot operate and open up offices in India. British banks can only open a handful of branches a year. Our insurance companies can only own 26 per cent of Indian insurance companies. Lloyd’s of London is the world’s most important reinsurance market but India is the only major country in the world where it cannot operate to this day.

I chair the Cambridge-India Partnership Advisory Group and we have so many exciting plans for India, to build on our strong links going back to Jawaharlal Nehru and beyond. All these reforms, if they took place, would benefit India and would help it attract the $1.7 trillion of infrastructure investment it desperately needs. As members of the EU, we cannot even enter into a bilateral free trade agreement with India, but have to do this through the EU. Could the Minister inform us when the EU-India free trade agreement that we have been talking about for four years will actually be signed?

I thank the noble Lord, Lord Parekh, for initiating this really important debate. We sit together on the Prime Minister of India’s global advisory council. India is a country of two stories: an emerging global economic superpower on the one hand and a country where, as we have heard, hundreds of millions of people live on less than a dollar a day. India is a country where corruption has now reached tipping point in its prevalence and magnitude, leading to the emergence of Anna Hazare and the Jan Lokpal Bill.

There are those in the UK who say that we should not be providing aid to India. However, I have seen the amazing work that DfID, the British Council and our team at the British high commission are carrying out on the ground; for example, in Bihar, where we have our brewery. Bihar is a state of over 100 million people and one of the poorest states in India, but through sheer good governance it has been turned around over the last six years under the leadership of its inspirational Chief Minister, Nitish Kumar, and the Deputy Chief Minister, Sushil Modi. There are initiatives to provide bicycles for schoolgirls and uniforms and books for schoolchildren. The Chief Minister is recruiting 300,000 school teachers and introducing the Right to Public Service Act—all this is turning around the state. However, we are talking about a country of 1.2 billion people.

As a country, Britain is so close to India. Our relationship is wonderful and yet we shoot ourselves in the foot by introducing the new Immigration Rules. Until 2010, the number of Indian students had been increasing multifold. I am a member of the advisory board of the Judge Business School at Cambridge University and the Cranfield School of Management. Both institutions have seen a significant drop in the number of applicants from India, and I am hearing that the Indian students are saying, “Does Britain want us any more?”. What are we doing? Do we not want to attract the brightest and the best? Dr Manmohan Singh, India’s Prime Minister, is himself a graduate of both Oxford and Cambridge. My own family has been educated here for three generations. These are generation-long links.

What are the Government doing to rectify this situation? I am a member of the UK-India Round Table. I fought so hard for foreign graduates to work in the UK for two years after graduation, as the noble Lord, Lord Parekh, spoke of. There is a perception that this rule has been removed and this is deterring so many foreign students, especially Indians, as this is a way of earning extra money to pay for the expensive higher education and to gain some work experience in this country. To build bridges, can the Minister clarify the situation?

Our links with India are so strong, whether it is the armed forces, culture, sport, cricket or the four Indian Booker Prize winners. We could do so much more to further our political links; we could have more exchange between our two Parliaments. Could the Minister look into this opportunity to further our political links?

To conclude, the reality is that the whole world has woken up to “incredible India”. In the words of Dr Manmohan Singh:

“India is an idea whose time has come”.

India was highlighted in the Queen’s Speech by the Prime Minister as a country we want to have an “enhanced partnership” with. However, we need to do so much more. We are competing with the rest of the world to engage with India. Given our special relationship, we in Britain could do so much more to encourage British industry, particularly SMEs, to do business with India. If only India would implement all the reforms that have been on the cards for so long. If those two things happened, I would be happy, and in the words of Mahatma Gandhi:

“Happiness is when what you think, what you say, and what you do are in harmony”.