Asian entrepreneurs in the West Midlands will be recruited to help firms break the Indian market, after a report warned companies are failing to do business with the emerging economic giant.
A report by West Midlands Minister Liam Byrne and UK Trade and Investment, the Government body led by Lord Jones of Birmingham, found businesses in the region believed trading with India “too difficult”.
But this could lead to economic disaster – as the Indian economy is expected to dwarf ours and become the second largest.
The report said the thriving Asian business community in the West Midlands could play a leading role in helping firms do business in India.
Trade between the UK and India is currently worth £8.7 billion a year, and growing at a rate of ten per cent per annum. Economists have forecast that India will overtake the UK and become the fifth largest economy in the world within ten years and the third largest economy, behind the USA and China, by 2025.
It will overtake the USA to become the second largest economy by 2050, according to predictions.
However, the report warned that some businesses preferred the familiarity of doing businesses with Europe. It said: “For some West Midlands companies and organisations, India currently falls into the ‘too difficult’ category – one to watch for now, but not yet familiar or easy enough for those more used to the regulation and certainty of Europe.”
But the study said West Midlands business groups with members who already understood India well, such as the Minority Business Forum and the Institute of Asian Businesses, could play an important role in helping other firms and offering advice to bodies such as the chambers of commerce.
It said: “It is important to ensure that both ethnic and non-ethnic business groups interact fully with each other and share information as widely as possible, so that the relative business advantages of each group may be shared and developed.”
The document set out plans to establish an India Co-ordination Group to oversee a plan to make the most of trade and inward investment opportunities.
Firms need advice about how to build contacts in India and where the best places are to do business in a country 13 times the size of the United Kingdom, the report warned.
Advantage West Midlands, the regional development agency, and UKTI had an important role to play in offering help, the report said.
West Midlands universities will also be targeted to ensure they are making the most of the potential market for their intellectual property and facilities in international markets such as India.
Mr Byrne (Lab Hodge Hill) unveiled the Action Plan after a visit to the Black Country manufacturing firm Stokes Group Ltd, which was acquired by Mumbai-based Mahindra & Mahindra in 2006, in a deal which safeguarded 285 jobs.
He said: “The number of Indian companies in the West Midlands has doubled since 2006, and this year we saw the biggest deal of all – Tata’s acquisition of Jaguar Land Rover made it the largest foreign investor in the region, employing over 13,000 staff.
“I saw on my own trip to India earlier this year that these signs are only a glimmer of what could lie ahead.”
The report received cross-party backing when it was warmly welcomed by Peter Luff (Con Mid Wortcestershire), Deputy Chair of the Parliamentary All-Party India Group.
He said: “Business might be a bit scared of what looks like a difficult market. But this is a really good time for British small and medium sized businesses to think about engaging with India, where a huge and rapidly-growing middle class is hungry for goods and services.”