Why aren't we wooing Indian entrepreneurs like the US?

It's all very well the UK seeking greater trade links with India - but are we offering the right incentives?

by
Last Updated: 26 May 2011
David Cameron is going all out to impress India with this week's trade mission, which includes senior cabinet ministers, various business bigwigs and assorted luminaries from the worlds of academia and sport. But as he tries to establish closer links between the UK and one of the world's fastest growing economies, the nagging question remains: what's in it for India? After all, our expertise largely lies in the wrong areas - and in fact, the Coalition's proposed cap on immigration might actually keep Indian entrepreneurs out of the UK. Whereas the US, for example, is considering a scheme that would give residence rights to entrepreneurs who come to the country, start a business and create jobs. Isn't it time for Britain to start doing more to attract international entrepreneurs?

In an article in The Hindu newspaper, Cameron himself asked the question: ‘It’s clear why India matters to Britain. But why should Britain matter to India?’ But although he went on to talk a bit about cricket and curry, the truth is that very few British companies have had much of an impact over there. BBC economics editor Stephanie Flanders suggests this is because Britain's strengths, like retailing and financial services, 'are the parts of the Indian economy that are still most closed to foreign companies’. So they might not want our input there.

But the most awkward issue for the PM on this trip so far has been the coalition's proposed cap on non-EU immigration - which could of course directly affect any Indian entrepreneur wanting to set up shop in this country (or any Indian business wanting to bring staff across - as one exec told Flanders: ‘when it’s the man in charge of getting you to invest in Britain, it’s all smiles, but when you’re talking to the official in charge of letting your people into the country, it’s a whole other story.’) The Indians don't like the idea, and nor, apparently, do some of the PM's own Cabinet - including Business Secretary Vince Cable.

The US, by contrast, seems to be taking a more enlightened approach: former Democratic presidential candidate John Kerry has just put forward the ‘Start-up Visa Act’, which would allow any foreign citizen who can raise at least $250,000 in venture capital to start a business there. Once they’ve created five jobs, achieved $1m in revenue or managed to raise another $1m, they’re in for good. Which we reckon sounds like a pretty good deal for all concerned. New Tory MP Jo Johnson (once the FT's Delhi bureau chief, now chairman of the All-Party Parliamentary Group on India) reckons Britain should be doing something similar - and we're inclined to agree. If the PM really wants to see some results from this India trip, maybe he needs to re-think his immigration policy...

In today's bulletin:
Business nervous as Government targets forced retirement

Shell profits while BP toils
BSkyB profits jump - and BT back in the black
Editor's blog: driven round the bend
Why aren't we wooing Indian entrepeneurs like the US?

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today