Why Maharashtra is a Magnet for UK Investors
The UK India Business Council arranged a UK CEOs roundtable with the Chief Minister of Maharashtra
India today is a two trillion dollar market with an enviable rate of GDP growth playing an increasingly important role in global geopolitics – not only as the world’s largest democracy, but also as an economic powerhouse that is coming into its own, with 29 increasingly competitive states contributing towards this growth.
Given these multiple growth centres, it is important that UK companies in India engage individually and collaboratively at both the central and federal levels to ensure that regulators and government leadership understand the larger UK investor story, their practices, and their social economic contribution. Other benefits of this type of engagement are that governments are able to develop their ease of doing business policies and businesses are able to understand the drivers of different governments.
As was highlighted in a recent UKIBC blog, some States are better at engaging with foreign investors than others . At the same time, some businesses are better at engaging with States than others.
A recent example of how business to government engagement can go well is an exclusive roundtable the UK India Business Council organised with the Chief Minister of Maharashtra, Mr Devendra Fadnavis, in the margins of the Magnetic Maharashtra Investor Summit.
Chaired by the Chief Minister himself, the roundtable was attended by the country heads of major UK investors into the state including Vodafone, BAE Systems, Rolls-Royce, Perkins India, Barclays, Aviva, Diageo, and Turner & Townsend.
Mr Crispin Simon, the UK Government’s Trade Commissioner for South Asia, Mr Sunil Porwal, Additional Secretary of Industry, Mr Sanjay Sethi, CEO of the Maharashtra Industrial Development Corporation, and other senior government officials were also present.
Is Maharashtra Magnetic?
Maharashtra is a progressive state, one of the largest states in terms of its economic size and prosperity and also one of the biggest industrial states. The share of Maharashtra in manufacturing GSDP is 19.3 per cent of the overall GSDP.
It is no surprise that the State is also popular with UK businesses, which have invested more in Maharashtra than any other State this century. Between 2000 and 2016, UK businesses invested US$7.47 billion. In the eighteen months between April 2015 and September 2016, Maharashtra attracted around US$600 million worth of FDI from the UK, which is 32% of the total FDI from the UK during this time period.
So, although already successful, the State is not resting on its laurels. It is aiming to be a trillion dollar economy by 2025. Its strategy includes developing better industrial and urban infrastructure, simplifying the regulatory environment, and constructively engaging in a two-way dialogue with business.
The roundtable with the Chief Minister was a great example of this. He listened to the views of the CEOs, and contributed hugely to a thorough and thought-provoking discussion on the scale and nature of UK investment into the state, which blended into an encouraging discussion about future investment plans, and about how to harness UK businesses’ enthusiasm to collaborate with the State Government to improve the operating environment.
The example of the interaction with the Maharashtra Government is one other States should follow. It was small, focused, and personal. The Chief Minister was in listening mode, he showed a real interest in helping the companies, and he took away several actions.
The discussion also gave the UKIBC members an opportunity that, of course, they took to understand the Government of Maharashtra’s drivers and to establish a stronger shared vision of strategic business co-operation with the State.
Business and government, when they work together, can change the pace and mode of economic growth. Let’s have more of this.