Mr Bikhchandani, Lord Bilimoria, distinguished co-panelists, distinguished guests, I’m delighted to be here. And the UK is delighted to be TIE’s country partner.
It’s said that a diplomat is someone who can tell you to go to hell in such a nice way that you look forward to the journey.
I’m not going to tell you to go to hell. I am going to tell you how Britain and India – and the rest of the world – can get to heaven. Not the heaven above, but the heaven we all want to see down here on earth: thriving societies in which there is sustainable growth and rising prosperity in which everyone shares, and in which everyone can fulfil their full potential.
Let me illustrate my argument with two case studies: of the countries I know best, the UK and India.
How Britain is thriving and will continue to do so
Let’s start with the UK. The last few years have been tough for us. We have been buffeted by the world economic downturn, then hit again by the Eurozone crisis. Some of the elements which have helped the UK economy in the recent past, such as North Sea oil, have run out.
We could have chosen to accept a future of managed decline, dwelling on Britain’s past glories. We reject that course completely. We think
Britain’s best days are ahead of us. While we are rightly proud of our past, we are confident of our future.
Why are we confident? It’s because the UK has some big assets which fit us well for the challenges of the 21st century.
- is and intends to remain one of the world’s largest economies: the seventh largest.
- has the right economic fundamentals: a highly educated and flexible workforce, a strong banking system, a stable democracy, the rule of law, and macro economic policies which support growth.
- is one of the most business-friendly environments in the world. The current government has cut red tape. It has cut corporation tax. The UK already has the lowest corporate tax rate in the G7: we cut it to 24% this year. And we will bring it down to 22% by 2014, which will make it one of the lowest in the world.
- We make it easy for entrepreneurs: the UK is ranked first in Europe by the World Bank as the easiest place to set up and run a business: it takes just 13 days to establish a business in the UK. And we actively encourage talent to come to the UK and thrive: example – a new type of visa we have introduced for graduate entrepreneurs, which will allow Indian and other foreign students who have developed world class innovative ideas to stay in the UK and develop their business.
- welcomes inward investment. Example: Jaguar Land Rover, acquired by Tata and now hugely successful. Think about that. How many other countries would allow a foreign investor to acquire one of their flagship national companies? The UK didn’t just allow it, we welcomed and facilitated it. And it turned out to be great for Tata and great for us, generating thousands of new jobs and more growth. That openness to foreign investment has meant that the UK has become the largest recipient of FDI in Europe and the second largest recipient of FDI in the world after the US.
- is the place to be if you want to do business in Europe. We offer direct access to the largest single market in the world, that of the EU, and great connectivity to other parts of Europe.
- is the place to be if you want to be a global player. The UK is where the world raises its capital and trades its shares, through the City of London and the Stock Exchange. The UK is in the right time zone, allowing you to talk to Asia in the morning and America in the evening. Heathrow Airport handles more international flights than any other airport in the world. And the UK speaks the world’s language, English.
- is a world leader in the things which drive prosperity and growth: science, technology, and innovation. Examples – the iPod, designed by a Brit; the Internet, invented by one; and the Higgs Boson, the so-called God particle which explains why the physical world works, predicted by a Brit – and found earlier this year. And we work hard at fostering innovation. Example: Tech City in East London, now Europe’s fastest growing cluster of digital and creative companies.
- is a world leader in education. According to the latest rankings, of the top six universities in the world, four are British.
- can do difficult things well. Example – the London 2012 Olympics: delivered on time, on budget, with friendliness, good humour and style.
So while we have been going through a difficult period, we in Britain are confident that we will soon see the return of strong and sustainable growth. There are some signs of that already: employment, already much better than the EU average, is rising. And others agree: UK Government debt has retained its AAA rating. And last year Indians invested more in the UK than in the rest of the EU altogether.
So while Britain may not have experienced chaos, it has experienced turbulence. My message is that we are coming out of it, and we are thriving.
Why India is thriving and will continue to do so
I am equally confident about India’s future. Mostly because of what I see when I travel around this great country.
Shortly after I arrived I met a senior Indian politician – I won’t name him. I asked him what he’d learned from his time in politics. He thought about it, and said: “I’ve concluded that your personal happiness is in direct proportion to your distance from Delhi”. I’ve taken him at his word, and spend as much of my time as possible outside Delhi, in what many people would call the Real India.
And the real India is not the same country as the one you read about in the media or some of the statistics.
In the real India the growth rate is not 5% but 10% or more. In the real India, almost everyone’s standard of living is rising. In the real India a vast and growing middle class, well educated and with a big disposable income, is generating more prosperity and helping ensure lasting stability. In the real India, parents rich or poor are making huge sacrifices to put their children into the best education they can afford – the best of all investments for the future of their child and India.
In the real India, I meet every day astonishing talent, and there’s a lot of it here in this room. In the real India, I see every day examples of world class excellence, in medicine, research, business, education, the creative arts. One of my enduring memories is visiting the InfoSys campus in Mysore. Now I have been to Harvard Business School, and the InfoSys campus is bigger and better. For me that sends out a very powerful message, not just about Infosys but about India. The message is: India does not aspire to be good, it aspires to be the best in the world, and in many instances, it already is.
In the real India, I see the unity in diversity of which Nehru spoke, and which is a truly powerful driver of creativity and growth. In the real India, I meet everywhere talented young Indians who have gone abroad for their education and first business startup, but who are now coming home because they see even greater opportunities here in India: and when the talent comes home in this reverse brain drain, you have one of the strongest of all reasons to be confident about India’s future.
And finally, in the real India I see something that is probably more important than any of the other things I’ve identified: I see optimism.
Everywhere and at every level, I meet people who think that while today is good, tomorrow will be better. You can’t quantify the economic and social benefits of optimism. But they are huge, and India has them – as it has many other things – in industrial size quantities.
What that means for the UK/India relationship
I don’t like meaningless happytalk. I do like what I call grounded optimism: confidence which is founded not on simple faith but on facts. And the facts as I have laid them out do make me confident about the future of both the UK and India, and about the future relationship between our two countries.
That relationship is strong, wide and deep. My ambition is to make it even stronger, wider and deeper. And we are seeing progress. In the economic sphere, for example, we are on course to meet the target set in 2010 by our two Prime Ministers of doubling trade by 2015. In 2011, total bilateral trade (goods and services) grew by 16% to £17 billion, and UK goods exports to India increased by 40% to £5.7bn, which means that India is now the UK’s largest market outside the EU.
And investment both ways is growing too. In 2011, a UK company made the largest ever investment in India: BP’s oil and gas joint venture with Reliance. The UK is now the third largest investor in India and India is now the 5th largest investor in the UK.
The state of the UK/India partnership
But I think we can and should do better. Given the ties between us, we should be much more ambitious. I see a real opportunity to create a partnership of equals in building the future our peoples want.
India’s strategic goal is transformation: inclusive development that benefits all its people. The UK offers what India needs to achieve that:
- India needs inward investment to build the country its people want: the UK specialises in raising and delivering investment capital.
- India needs infrastructure: roads, metros, railways, ports, airports: the UK specialises in infrastructure.
- India needs to build new cities and manage the successful expansion of its existing ones: the UK specialises in urban planning and architecture.
- India wants to create a bigger manufacturing sector at the top end of the value chain: the UK specialises in precisely the high tech manufacturing required.
- India needs power, from both traditional sources like oil and gas, and renewable sources like wind and solar power: we specialise in all those areas.
- India wants to educate the 500 million of its young people who will be coming onto the labour market in the next ten years: we specialise in education and skills.
So there is a close match between what India wants and what the UK offers, and between what the UK wants and what India offers. That’s a good basis for an even stronger partnership in the coming years.
I said I’d tell you how to get to heaven, or at least how to get to lasting growth and prosperity. I hope that my reflections on the UK and India have given some hints of that.
But it’s not complicated. In short, countries will succeed, wherever they start from, if they invest in their own people: in health, education; if they invest in the physical infrastructure necessary for growth: roads, airports, power; if they build the institutions necessary for stable, democratic and open governance and the rule of law; and if governments do the right things. The job of governments is to create the right enabling environment for business and growth, and then get out of the way and let their people’s natural talent and creativity flourish without constraint.
There’s a large European country, which I will also not name, in which there’s a saying: “the economy grows at night, while the government is sleeping”. We in Britain don’t believe the government should sleep. We do believe it should only get involved in the things it really needs to – and that ultimately growth and prosperity will not be driven by government or bureaucrats, but by the private sector and entrepreneurs like you. Our task is to free you and where necessary, support you. And yours is to let your imagination run wild and invent the future.