How chancellor woos India

Hague and Osborne

I am currently running on two hours sleep and a mild vegetable curry I had for breakfast in my hotel.

So I feel considerably less full of vroom than the tractors and cars made by the Mumbai plant of the Mahindra Group, where I have been traipsing behind the chancellor as he tours the factory floor, in the atmospheric conditions of a Turkish bath.

For George Osborne, it's hours of beaming over gear boxes and transmission systems, as if they were beautiful newborn babies.

Welcome to the grounding reality of winning foreign direct investment for the UK.

Not mega

Mahindra represents an interesting case study of how to persuade overseas companies to place their bets on Britain.

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Mr Cameron and his Chancellor will need to do a good deal more cooing over Mahindra's babies, to win its big money”

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Today it announced a £20m UK investment in electric-car research and development for Formula 1 vehicles.

OK, so not exactly megabucks. But Mahindra's automotive president, Dr Pawan Goenka, told me that the point was to develop technology that could be used for ultra-low-emission mass-market cars - and that would be a big deal.

Dr Goenka also gave me an insight into how hard it is to secure only £20m: it required the British Prime Minister David Cameron to have a private meeting with him.

Also it turned into a reality, thanks to subsequent spadework by Oliver Letwin, the cabinet office minister.


As I implied, £20m is hardly going to transform either the UK or Mahindra.

But Mr Letwin told me he sees it as the proverbial mackerel-catching sprat.

What did he mean?

Well Dr Goenka told me Mahindra would within six months decide on a much more substantial £100m research investment.

He said UK government subsidies would be helpful, if Mahindra goes ahead.

But the bigger prize would be mass-market production of electric cars.

I asked Dr Goenka how likely it was that Mahindra would become a big manufacturer in the UK, and not just an exploiter of valuable UK technology.

All he would say is that his company was minded to do something in Europe... one day.


Mr Cameron and his chancellor will need to do a good deal more cooing over Mahindra's babies, to win its big money.

Which may say something about where the real power lies, in a globalised economy that allows multinationals like Mahindra to invest their precious job-creating cash more or less wherever they choose.

Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 247.

    Britain started appeasing the wrong kind of Indians since 1947- in form of auctioning (British) university degrees, scholarship & granting permanent residency/citizenship.

    Talented & able Indians with any sense of self-respect hardly stay there. UK can never attract right kind of Indians (or any non-white person frm its former colonies) unless it accepts (NOT mere tolerate) racial diversity.

  • rate this

    Comment number 246.

    Brian @242
    to get a deal signed"

    In the vein of, "Once you can fake sincerity…"

    You echo Nick Clegg in his dismissal of 'ever closer union' - along with Heaven on Earth - as 'flim-flam', and so risk undoing all George's good work… "just spin and flattery".

    Can we agree multi-tasking, for George and ourselves? Political affinity, social instability & Typhoons, all have trade relevance.

  • rate this

    Comment number 245.

    I never imagined that condition of Britain, the urgency to attract Indian investment/businessmen, will be so dire that we would see the statue of Mahatma Gandhi in front of British Parliament-

    And Brit politicians FOOLISHLY think that Indians like Goenka, Modi, Birla, Mittal, Ambanis etc (NOT Tata though) can help developing Brit society & economy!

  • rate this

    Comment number 244.

    Jay @241
    "try to attract
    NOT the spoiled"

    Spoiled or not, by intent or in effect, few with reason & care beyond rescue 'for humanity'. In team-building, especially urgent or critical, perhaps better one 'honest injun' than twenty with bald commendation as 'talented'. Little Britain will one day be amongst those blessed by Mighty India, and vice-versa, in terms of vocation not monetary advantage.

  • rate this

    Comment number 243.

    Perhaps Mr Osborne should start addressing India's woeful and criminal treatment of women before he starts climbing into bed with big business. Do we really want to condone India's treatment of women, and the terribly damaging caste system that perpetuates it, by pretending it's not happening?


Comments 5 of 247


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