South India - A Dream Destination for business

EXTRAORDINARY AND PLENIPOTENTIARY DIPLOMATIST • November 2015 1Highlight: PM Modi’s visit to the UK

EXTRAORDINARY AND PLENIPOTENTIARY DIPLOMATIST • November 20152
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C o n t e n t s
Invest in Karnataka 2016............................................................... 6
Andhra Pradesh - Rolling out the Red Carpet................................ 11
God’s Own Country - Kerala Offers Ample Scope for Investment.. 14
Tamil Nadu - A Haven for Industrial Investments .......................... 18
Key Invest Zones of Kerala .......................................................... 22
Spotting UK’s Investment Terrain in South India ........................... 24
South Indian States - Potential Areas for Investment..................... 27
UK & South India - Being ‘Pound Wise’........................................ 34
India-UK Relations: Bonhomie that Stood the Test of Time............ 35
Modi’s UK Visit - The Buzz .......................................................... 38

EXTRAORDINARY AND PLENIPOTENTIARY DIPLOMATIST • November 2015 3
It’s my privilege to present the Investors’ Guide on South India – A Dream
Destination, which is a joint eﬀort of the Diplomatist and British South India
Council of Commerce (BSICC).
The Investors’ Guide highlights areas of investments in the states of South
India as well as the business-friendly policies of state governments, and will
encourage small and medium scale enterprises in UK to invest in South Indian
states - Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, and
Puducherry.
Finance, infrastructure, energy, education and healthcare are some of the
critical sectors for the rapid economic development. The UK companies, with
their proven expertise, can engage with South Indian states to tap into the plethora
of opportunities.
Talented English-speaking workforce, rapidly emerging middle class, culture
of entrepreneurship and improvisation make India a hugely attractive investment
destination for British companies.
The Investors’Guide provides an insight into the scope for future investment
collaboration between South India and UK companies. Thanks to the ease of
doing business, transparency, accountability, and eﬀective leaderships, UK
companies will continue to make South India their preferred destination.
From the
Publisher’s Desk
LINDA BRADY HAWKE
Publisher

By K V Thomas
A
ndhra Pradesh, a land of rich heritage,
legacy and culture has written a new
chapter in its chequered history with
the formation of Telangana state in June, 2014,
bifurcating 10 districts from undivided Andhra.
Seemandhra, comprising 13 districts and having
an area of 1.60 lakh square kilometres with an
approximate population of 5 crore is now engaged
in a challenging task of rebuilding its economy
and infrastructure. However, the state which
successfully overcame many historic battles and
struggles in the past is poised for steady progress
and development.
The history of Andhra actually begins from
the rise of Satavahanas who flourished after the
decline of Mauryan Empire. The golden age of
Satavahanas who ruled from 3rd century BC to
the first quarter of 3rd century AD was marked by
great literary and artistic activities and expansion
of trade and commerce across the seas. Maisolia
(the present Machilipattanam) in the Krishna delta,
the biggest seaport of 3rd century BC, was once
the colony of the Dutch, the French and later the
British. Historic battles were fought in this region
till the rise of Kakatiyas who ruled during 13th and
14th centuries. The Kakatiya dynasty also perished
with the advent of Muslim rulers who controlled
major part of Deccan where Vijayanagar Empire
checkmated the Muslim rulers for over 200 years.
Ultimately, the Vijayanagar also fell to the sword
of rivals in the famous battle of Talikotta in 1565
AD. Thus, the Deccan area comprising the present
Andhra came under the Nizam and the British until
India’s independence in 1947.
In the post-independence period, the Princely
state of Hyderabad ruled by Nizam was annexed to
Indian Union through a military operation in 1948;
the armed peasant struggle in Telangana during
1948-51 was unparalleled in the modern history
of India because of its militancy and bloodshed,
whereas the whole of Telangana was the citadel of
Left Wing Extremists for more than two decades.
Similarly, the movement for the separate Telangana
state that started as early as 1960 from the
academic campus of Osmania University caused
occasional upheaval and unrest. Despite such
adversities, the undivided state attained significant
development in its economy and infrastructure; the
GDP per capita (2013-14) of the state was much
above all India average.
The state has diverse geographical and
demographic features. The Coastal Andhra
comprising nine districts having deltas with fertile
and well-irrigated lands is the most prosperous
and wealthy, whereas Rayalaseema with 4 districts
is described as stalking ground of famines and
poverty. The Coastal Andhra having highly
productive agricultural sector is considered as the
Andhra Pradesh
Rolling out the Red Carpet
The state has diverse
geographical and
demographic features.
The Coastal Andhra
comprising nine districts
having deltas with fertile
and well-irrigated lands
is the most prosperous
and wealthy, whereas
Rayalaseema with 4
districts is described
as stalking ground of
famines and poverty

granary of South India. Besides paddy,
the other major crops in the region are
tobacco, chilli, groundnut, sugarcane,
jowar, etc. The long coastline of around
1000 kilometres with a major port at
Visakhapattanam and minor ports would
be conducive for ocean trade and fisheries
industry.
Andhra Pradesh is blessed with
natural resources especially land, water
and power. The state has vast stretches
of forest, government and public land
that can be easily acquired or used for
industrial ventures or public projects.
Forty major, medium and minor rivers
flow through the state. Major irrigation
projects have been taken up to improve
the supply of drinking and irrigation
water, especially to Rayalaseema area. The
state has now achieved a unique status of
‘zero power deficit’. The overall power
situation would be further improved with
the commissioning of new solar and wind
power projects and the gas-grid. With
surplus power, excellent domestic and
global connectivity, skilled manpower
and world class infrastructure, the state is
all set to emerge as the most favourable
destination for investors.
Demographically, upper and other
backward castes such as Kamma, Kapu
and Reddy communities constitute
major chunk of population with pockets
of plain and hill tribes in Srikakulam-
Visakhapattanam belt and East-West
Godavari region. Bulk of the population is
engaged in agriculture. The British rule in
the area resulted in the noticeable agrarian
transformation, especially after the
construction of Godavari-Krishna anicuts.
Cash crop cultivation gradually replaced
the growth of subsistence crops, which
led to the emergence of neo-rich farmers
who are now in the forefront of a number
of sectors such as healthcare, hospitality,
flour-oil mills, real estate, construction
and small and medium industries. New
technologies and innovative mechanisms
such as commercial farming are the main
facets of the agrarian sector. The human
development indicators are at higher level
in Coastal Rayalaseema regions.
The capital city of Hyderabad, now
falling under Telangana is the most
developed region in the undivided state,
with better infrastructure, hub of industries
and historic monuments/places of tourist
attractions such as Charminar, Golconda
forts, Salarjung Museum, Hussain Sagar
Lake, Lumbini Park, Birla Planetarium,
Makah Masjid, etc. Perhaps, it was the
only major urban centre in the state for
global business. Now the bifurcation
has been used as an opportunity to
develop other urban centres such as
Visakhapatnam, Guntur, Rajahmundry,
Tirupati, Ongole and Kurnool, which
will definitely give an impetus for the
growth of new industries and business.
Already flight of capital from Hyderabad
to other cities such as Vishakapattanam,
Vijayawada, Guntur, Ongole, etc has been
noticed.
Meanwhile, the state government
is also in the forefront of rebuilding/
building infrastructure in the bifurcated
state. It has initiated an ambitious
project of developing Amravati in
Guntur-Vijayawada belt as a world class
state capital with greater connectivity,
mobility and sustainability ensuring
economic development. Recently,
Andrew McAllister, the British Deputy
High Commissioner, while welcoming
the project articulated Britain’s interest
to associate with India’s 100 Smart City
projects in different states. Significantly,
3 cities from the state have been included
under the Smart City project of the Union
government.
The state government has worked out
a number of projects/ strategies to attract
investment. The Industrial Development
Policy 2015-20, contains a number of
guidelines such as allotment of land,
power subsidy and financial incentives for
new industrial entrepreneurs. The single
window clearance system introduced by
the state government was intended to
remove unnecessary hurdles that prevent
investors from obtaining necessary
sanctions for projects. The Andhra Pradesh
Infrastructure Mission (APIM) is the most
significant one. It is aimed at creating
infrastructural assets in core sectors in
a time bound manner. Three key sectors
identified under the mission are ports,
airports and tourism. Besides improving
the existing facilities in those sectors, new
projects would be taken up in selected
districts with the assistance of the Union
government.
One such ambitious project is the
proposed Beach Corridor straddling along
the coastline and traversing nine coastal
districts from Srikakulam in the north
to Nellore in the south. Basically, it is
intended to promote tourism on a large
scale by ensuring easy connectivity of
pristine beaches, natural rock formations,
wild life sanctuaries, panoramic
backwaters and river beds and deltas for
which the Coastal Andhra is famous for.
A novel programme namely, Destination
Tourism Promotion Bureau (DTPB), a
Public Private Partnership model without
any profit motives is being worked out by
the state for the development of tourism.

In view of the geographical diversity, rich
culture and heritage, the state has identified
nine themes such as beach and water-based
tourism, eco-tourism, Buddhist tourism,
religious tourism, heritage tourism,
infrastructure development, recreation and
adventure tourism, spiritual and wellness
tourism and medical tourism for the
promotion of this sector.
Equally important is the government’s
Knowledge Mission. This mission is
intended to fill the vacuum of Institutions
of Higher Education, Research and
Training in the state after bifurcation,
as majority of such institutions function
in the twin cities of Hyderabad and
Secundarabad, now part of Telangana.
A number of centres of excellence
in the areas of science, technology,
engineering, management and medicine
will be established in various districts.
Some of the renowned institutions are:
Indian Institute of Management (IIM),
Visakhapattanam, Indian Institute of
Technology (IIT), Chittoor, Indian Institute
of Science Education & Research (IISER),
Tirupati, All India Institute of Medical
sciences (AIIMS), National Institute of
Ocean Technology, etc. By developing the
state as a Knowledge education hub, there
would be manifold increase in the number
of professionals and skilled manpower
- crucial assets for knowledge-based
industries or investments.
The state has laid down a blue print for
increased investment in various sectors.
The Memorandum of Understanding
(MoU) have been signed with a number
of leading multinationals and Indian
corporate establishments such as Mylan
(global Pharma giant), Tech Mahindra,
Wipro, HPCL, Asian Paints, Hero Motors,
VEM Technologies, etc for launching
their new ventures. The state government
adopted the strategy of ‘Showcase Andhra
Pradesh’ before the global business
community. The chief minister, since
the bifurcation of the state, has visited
countries such as Japan, Singapore,
China and Davos and interacted with
the heads of major MNCs and business
groups. Bill Gates and Satya Nadella
(Microsoft), Sheryl Sandberg (Facebook)
and senior executive heads of Japan Bank
for International Cooperation, etc were
some of the prominent corporate figures
contacted by him. Meanwhile, foreign
delegations from a number of countries
such as UK, USA, China, Japan and
Singapore have visited the state to explore
the sectors for investment and business.
Some of the potential sectors for
foreign investment include IT, urban
infrastructure/development, commercial
farming, food processing, fisheries,
aerospace, defence manufacturing,
oil gas exploration, non-conventional
energy sources, tourism, transport and
communication network. UK is interested
in investing in solar and wind power
projects. Sumitomo Corporation, Japan
has recently signed a MoU for developing
food processing sector. Japan’s industrial
conglomerates also take keen interest in
petroleum, power, water, new energy and
industrial parks and have plans to set up
refinery and gas cracker units in the state.
A number of MoUs have been signed by
various Chinese firms in infrastructure and
engineering manufacture sectors.
Apart from governmental efforts,
a number of bodies such as Andhra
expatriate diaspora, trade & commerce
chambers, British South India Chamber
of Commerce, etc play a pivotal role
in attracting foreign investment. For
example, Microsoft’s Indian stalwarts
such as Satya Nadella, Sanjiv Sidhu,
etc having their ancestral roots in
Andhra have promised full support and
cooperation for the state in building up
its economy and infrastructure. A number
of leading expatriates in UK, USA and
Canada intend to make their investment
in cities such as Visahakapattanam,
Vijayawada and Guntur. During the
Second UK South India Business Meet
recently held in London, several corporate
houses in UK have shown interest for
investment in the state in sectors such
as tourism, Information Technology and
Communications.
The bifurcated state of Andhra
Pradesh requires massive investment for
its infrastructure, economy and overall
development. It is worthwhile to mention
that the undivided Andhra attracted
INR 124 billion FDI during the period
1991- 2010 of which 51 percent was
invested in Telangana, particularly in the
city of Hyderabad whereas the present
Seemandhra received 49 percent (Coastal
Andhra - 43.2%; Rayalaseema - 5.8%).
Thus, more the foreign investment, more
rapid will be the development of the state.
Let us hope that the state will march ahead
with massive investment in core sectors.
The chief minister,
since the bifurcation of
the state, has visited
countries such as
Japan, Singapore,
China and Davos and
interacted with the
heads of major MNCs
and business groups

God’s Own Country
Kerala Offers Ample Scope
for Investment
B
lessed with natural resources, human
development indices at par with the
most advanced nations in the West
and ever expanding infrastructure,
Kerala is emerging as one of the most
attractive destinations for investments.
The state enjoys diverse geographical features.
With the Arabian Sea in the West, Kerala is on the
transnational trade corridor connecting the Gulf to
Singapore, Europe and the Far East. The Western
Ghats in the East with undulating mountain ranges
and valleys form a protective barrier that provides
pleasant and equable climate throughout the year,
unique for whole of India. A network of 44 rivers,
long coast line running down its entire length,
serene beaches, endless stretch of backwaters and
lagoons and sprawling greenery everywhere earned
for it a fanciful epithet, the God’s own country.
Equally unique are its flora and fauna. Kerala’s
forests are rich with a variety of timber-trees,
medicinal plants, birds and animals. The pristine
silent valley and Agasthyavanam Biological Park
in Western Ghats are homes to a plethora of rare
species of plants and animals, making them one
of the seven biological hot spots of the world. The
marine life such as crocodiles, turtles, shrimp,
sardines, mackerel, lobster, tuna and squid are
abundant in the rivers, backwaters and lagoons.
The state has sprawling areas of coconut,
coffee, cardamom, coco, cashew, rubber and tea
plantations. From time immemorial, Kerala is
a major producer of a variety of spices such as
Pepper, cardamom, cinnamon, ginger, turmeric,
nutmeg etc, which attracted Nomadic Arabs and
ancient Phoenicians traders and voyagers as far as
from Rome, Damascus, Alexandria, Constantinople
(now Istanbul), etc. In fact, such adventurous hunt
for spices attracted the Dutch, the Portuguese, the
French and the British to the Coromandal coast of
Southern India, notably Kerala.
Now efforts are in the offing to revive the
ancient maritime route through an ambitious
‘Spice Route project’, a joint initiative of the State
Government of Kerala and Government of India,
aimed at re-establishing Kerala’s maritime trade
relations with the countries associated with the
ancient Spice-route. No doubt, such endeavours
would result in the revival of cultural, historical and
archaeological exchanges and help to boost tourism
in Kerala.
The state is also blessed with mineral resources
such as heavy mineral sand (thorium, titanium,
lithium, and zircon), china clay, iron ore, graphite
and bauxite, silica sand, lignite, lime-shell, granite,
etc. More than 90 percent of the total value of
mineral production in the state comes from mineral
A network of 44 rivers,
long coast line running
down its entire length,
serene beaches, endless
stretch of backwaters
and lagoons and
sprawling greenery
everywhere earned for
it a fanciful epithet, the
God’s own country

sand and china clay, which have high
demand in domestic and international
markets. There is much scope for launching
minerals-based industries in Kerala.
Just as the splendid natural resources,
the state having the highest literacy rate in
India provides highly skilled manpower
with low operating cost. Every year, more
than thirty thousand engineers come out
of engineering institutions including
prestigious bodies like National Institute
of Technologies (NITs) and Deemed
Universities. Apart from the newly
formed Indian Institute of Technology
(IIT), the other centres of excellence
include Cochin University of Science &
Technology (CUSAT), Indian Institute
of Space &Technology, Indian Institute
of Science Education and Research,
etc. The other alma-centres in the fields
of medicine, Agriculture, Veterinary,
Fisheries, Oceanography, Information
Technology (IT) and Management produce
skilled professionals whose services can
be extensively used in a mosaic of new
investment ventures.
Moreover, in terms of physical quality
of life especially in the areas of housing,
America’s and falling faster. Kerala’s
residents live nearly as long as Americans
or Europeans. Though mostly a land of
paddy-covered plains, statistically Kerala
stands out as the Mount Everest of social
development; there’s truly no place like it’.
Along with such favourable
demographic and socioeconomic
indicators, Kerala holds significant
industrial/investment potential due to
better infrastructure facilities, such as
power, the transport and communication
system, airports, ports and the availability
of rare minerals.
As regards to power, the total installed
capacity of the state is 2657.25 MW of
which more than 75 percent is generated
by 24 hydel projects. Serious efforts are
health, sanitation, etc, Kerala tops the
list of other states in India. Above all,
the cultural and social fabric of Kerala
woven on harmony, tolerance and unity
is a role model for other regions in India.
Perhaps, the words of Bill McKibben1
, the
renowned US environmentalist and author
truly reflect the unique socioeconomic
cultural scenario of the state:
‘Kerala, a state in India, is a bizarre
anomaly among developing nations, a place
that offers real hope for the future of the
Third World. Though not much larger than
Maryland, Kerala has a population as big as
California’s and a per capita annual income
of less than $300. But its infant mortality
rate is very low, its literacy rate among the
highest on earth, and its birth rate below
In the field of transport and communication, the
state is getting ready for a big leap forward. Its rail
and road connectivity is one of the best in India

on to tap the non-conventional energy
sources, particularly the tremendous wind
and solar power. Recently, the Cochin
International Airport (CIAL), as part of
its ‘green field initiative’ has installed
12 MW solar power system generating
40000-50000 units per day for the airport.
The non-conventional energy sources
are becoming more and more popular
among domestic and industrial consumers,
especially in the light of various incentives
and subsidies announced by the State and
Central governments.
In the field of transport and
communication, the state is getting ready
for a big leap forward. Its rail and road
connectivity is one of the best in India.
Despite constraints in the acquisition of
land, the state is going ahead with the
National Highway Development Projects
(NHDP), which would improve the road
connectivity.
Three international airports with the
fourth one taking wings would virtually
transform the God’s own country into
a global village with easy connectivity
world-over. The ongoing Kochi Metro
and the proposed Monorail are world
class Light Mass Rapid Transit Systems
envisaged to reduce overcrowding, traffic
congestion, transit time and air and noise
pollution in metros such as Cochin and
Trivandrum. Cochin, one among the 100
cities selected by the Union Government
under ‘Smart city’ project, is posed for
rapid development in infrastructure during
the next 5 years.
Integrated Transport system linking
road and water transports is in the offing
to improve transport facilities in major
cities/townships. The state has a major
port at Cochin and 16 smaller ports
along the 590 km coastline. While the
first and only International Transhipment
Container Terminal is located in Cochin,
Adani Group has already inked INR 7000
crore project to develop Vizhinjam in
Trivandrum as an International Deepwater
Multipurpose port. Such world class
facilities available in the state will give
an impetus to investors and export-
import houses to select the state as their
destination for investment/trade.
Here comes the crucial question: If
Kerala has such impressive infrastructure
and highly skilled manpower, why the
state has lagged behind in investment
and industrial development for decades?
This leads us to many ground realities.
First and foremost, the state was unable to
showcase its potential to the outside world;
but remained crippled and confined to
its own domestic shell due to ideological
controversies. The negative image and
fears crystallised through orchestrated
propaganda focusing on trade union
militancy, frequent strikes and lock-outs
and a society deeply mired in communist
ideologies haunted the new investors for
decades.
However, things have drastically
changed with the onset of liberalisation
and globalisation in the country during
early 1990s. At international level, the
economists like Dr Amartya Sen, Angus
Deaton2
through their comprehensive
research works on poverty and social
justice could undo many such perceptions
and fears on Kerala society. On the home
front, there was general consensus among
political parties that the state needs more
investment for stepping up the tempo of
development, even to sustain the past
gains of Kerala model development. The
hostility or antagonism against foreign
investment has come down; major
trade unions adopted realistic approach
shunning militancy and frequent strikes;
new concepts such as Public-Private
Partnership for investment became popular
and the government took a number of
innovative steps to promote congenial
climate for investment.

One of the pioneering steps was the
establishment of industrial estates and
dedicated infrastructure with a number
of concessions and incentives for the
new investors. Techno Park, India’s
first Technology Park had come up in
Trivandrum in early 1990s with the state-
of-art facility. It has now become a major
IT hub in the country with 120 leading
companies and 15,000 professionals. Such
policies and initiatives of the state coupled
with readily available local skills and
talents at low cost have prompted many
prominent software industries to set up
their operations in the state. Thus, new IT/
Cyber Parks have come up in other centres
such as Kochi and Kozhikode. With the
commissioning of Smart City, Kochi, a
joint venture of Dubai based TECOM
Investments and Kerala government,
Kerala may turn into another ‘Silicon
valley’ with an array of leading players in
this sector.
Just like IT, Kerala has immense
potential to promote tourism industry.
While the skilled human resources are the
main assets of the IT industry, Kerala’s
unique natural beauty is the major capital
of tourism sector. In fact, tourism industry
covers over one-tenth of state’s Gross
Domestic Product (GDP). The tourism
policy of the state envisages perfect
synergy between public and private
sector to create quality on all fronts so
as to provide world class experience to
tourists without deteriorating society
and environment, while strengthening
economy. Thus, leading amusement parks
with world class facilities have come up in
Kannur, Palakkad, Trichur, Ernakulam and
Trivandrum, which lately, have become the
most favourite destination of domestic and
foreign tourists.
Refrences
1
McKibben (2006)
2
Professor of Economics &International
Affairs, Woodrow Wilson School of Public and
International Affairs, Princeton University, who
conducted extensive research on health, well-being
and economic development in India etc.
of action was formulated to accelerate
development through more investment
in agriculture and industries. Almost
after one decade, the Congress-led state
government organised the Global Investor
Meet (GIM), in Kochi on January 18 and
19, 2003 and thrown open the doors for
large-scale private investment in the state.
The then Prime Minister Shri Atal Behari
Vajpayee inaugurated the GIM, in which
leaders cutting across political affiliation
strongly batted for more investment to
ensure all round development of the state.
The ‘Emerging Kerala-2012’ generated
substantial interest from entrepreneurs
and investors in various sectors. One
noticeable achievement of the Meet
was that it could create an atmosphere
conducive for investments, collaborations
and partnerships. Different strategies are in
the offing to attract the investors especially
to sectors such as tourism, hospitality,
travel, etc. Roadshows in foreign countries,
cultural seminars and designating icons
as brand ambassadors etc are part of this
strategy. Recently, Tennis legend Ms Steffi
Graf has been appointed as an Ambassador
for promoting Ayurveda and health tourism
in Kerala. Let us hope that she will win
more ‘Grand Slams’ for Kerala in the
state’s chase for more investment.
The pristine beaches, backwaters
and waterfalls, wild life sanctuaries,
monuments and historical places,
traditional art forms, martial art and
Ayurvedic massages and therapies
continue to attract tourists of all hues. The
Health Tourism has been making big bangs
attracting foreign tourists from around
the world. The efforts of the government
to promote tourism have opened up new
avenues in the hospitality and travel
sectors in which renowned groups have
made substantial investment.
There are many other potential sectors
for investment. The vast stretches of
Exclusive Economic Zone lying in the
coastal belt and almost equivalent to
the land area of the state are ideal for
developing fisheries economy. Inland
fresh water lakes, backwaters and
lagoons, irrigation canals and river-
beds increase its scope. The presence
of institutions imparting research,
technology upgradation and marketing
network promises more growth in the
future. Investments/industries based on
forest plantation, minerals and quarries,
cash crops and spices, construction and
manufacturing are attracting more and
more entrepreneurs. The expatriate Kerala
diaspora constitutes the major investors in
such sectors.
Gone are the days when the state
was unable to showcase its investment
potential. Now, the state vigorously
pursues an open door policy to attract
maximum investment in the state.
Ideologies or politics seldom create any
impediments for such endeavours. For
the first time, the Left oriented Centre
for Research and Studies organised the
International Congress on Kerala Studies
during 1994 in Trivandrum when a plan
Techno Park, India’s
first Technology
Park had come up in
Trivandrum in early
1990s with the state-of-
art facility. It has now
become a major IT hub
in the country with 120
leading companies and
15,000 professionals

Tamil Nadu
A Haven for Industrial
Investments
T
he southern state of Tamil Nadu is emerging
as one of the most preferred investment
destinations in Asia. The Department of
Industrial Policy and Promotion (DIPP) placed
Tamil Nadu third among the Indian states in
respect of foreign investment inflows. The very
fact that the state attracted INR 44,402 crore worth
Foreign Direct Investment (FDI) during the period
May 2011 to September, 2014 speaks volume on
the most conducive investment climate prevailing
in the state.
Tamil Nadu has better physical and social
infrastructure compared with many other states
thanks to the British Residency, which made
significant contributions to the region in the fields
of better education and healthcare, commerce
and industry, transport &communication and
stable administration. The tempo of development
to a great extent has been maintained during
the post-independent period. None can forget
the contributions of an array of distinguished
statesmen and political stalwarts from the state,
such as Shri C Rajagopalachari, Sarvapally
Radhakrishnan, K Kamaraj, CN Annadurai, MGR,
R Venkataraman, C Subramanium, K Karunanidhi,
APJ Abul Kalam and Kumari Jayalalitha.
Tamil Nadu has better
physical and social
infrastructure compared
with many other states
thanks to the British
Residency, which made
significant contributions
to the region in the fields
of better education and
healthcare, commerce
and industry, transport
&communication and stable
administration

The continuity of strong and stable
governments with proactive and investor-
friendly policies and programmes helped
to create pro-investment climate.
The unique geographical features
coupled with the abundance of natural
resources provide a fertile ground for
investment. Tamil Nadu has a coastline of
1,076 kilometres, which is the country’s
second longest coastline. The Eastern
and Western Ghats that meet in Tamil
Nadu are natural habitat of rich fauna and
flora. The water of 760 km long Cauvery
River irrigates large areas of Coromandel
– delta, which virtually is the granary of
Tamil Nadu. Rice, Ragi, jowar, maize,
bajara and pulses are the major food crops.
The cash crops include cotton, sugar
cane, tea, coffee, rubber, chilli and spices.
Limestone, mica, magnetite, salt, gypsum,
bauxite, lignite, etc are the minerals found
in the state.
The varied natural beauty coupled
with its rich art, architecture, culture and
heritage makes Tamil Nadu as a major
destination of foreign and domestic
tourists. The misty mountains and hill
stations such as Coorg, Nilgiris, Ooty
and Kodaikkanal, blue beaches and
lagoons such as Marina in Chennai, wild
life sanctuaries, waterfalls, botanical
gardens and theme parks always attract
nature lovers. Numerous temples with
marvellous Dravidian architecture and
aesthetic sculptures; shrines and iconic
monuments and structures encourage
Religious Tourism. Cities and towns such
as Madurai, Palani, Trichy, Tiruvalloor,
Tanjore, Kanchipuram, Mahabalipuram,
Velankanni, and Nagore have become
internationally famous pilgrimage centres
by virtue of famous temples, shrines and
darghas.
A ‘SWOT’ analysis may explicate that
the state offers more inherent strengths
and opportunities to investors. The
diversified physical infrastructure such as
roads, ports and rail, comfortable power
position, availability of skilled manpower,
harmonious industrious relations bereft of
labour unrest or militancy, peaceful law
and order situation, ideal work culture,
best incentives, subsidy packages and
transparent decision making mechanisms
are some of those strengths and
advantages.
Travelling within Tamil Nadu or to
any other part of the world from the state
has been made extremely convenient,
through extensive connectivity on land,
in the skies and across the waters. The
major cities of the state are well connected
by National and State Highways of
which more than 95 percent are multi-
lane. In order to further improve the
road infrastructure facilities, the state
government has taken up a flagship
scheme namely Comprehensive Road
Infrastructure Development Programme
(CRIDP) with a massive investment of
around INR 15,000 crore for widening
existing roads, constructing flyovers,
bridges and culverts. Major schemes are
also in the offing to create high-speed rail
corridors. The air connectivity is equally
excellent. Chennai’s international airport
having 650 plus direct international flights
a week and passenger traffic of over
4.50 million per year provides excellent
connectivity to Europe, USA, the Gulf
and East Asia. With the second largest

coastline in the country, a network of 3
major ports and 23 minor ports, the state
has effectively harnessed the might of
the oceans to provide the perfect gateway
for investors to reach out to the world.
The state has also developed an efficient
Inland water transport network.
Over the last four years, the
overall power situation in the state has
substantially improved. Apart from
conventional energy sources with
an installed capacity of 11,415 MW,
renewable energy particularly wind and
solar power sources have been exploited
by the state. The installed capacity of wind
power generation is 7,145 MW, whereas
the state targets 3000 MW of solar
power by the end of 2015. Meanwhile,
new thermal power projects led to an
additional power generation of 2,500-MW.
The state government has taken up steps
to improve the quality of power supply by
strengthening the transmission network in
collaboration with the Japan International
Cooperation Agency.
In respect of the availability of skilled
manpower, Tamil Nadu is No. 1 in India.
The state is blessed with a number of
institutions of excellence such as Indian
Institute of Technology (IIT), Chennai,
National Institute of Technology (NIT),
Trichy, Indian Institute of Information
Technology (IIIT), Srirangam, Madras
Institute of Technology and the famous
Anna University, etc, which provide
a pool of most talented engineers and
professionals who have the potential
to gear up core industries in different
sectors. Cluster level skill development
is an innovative strategy by which
Cluster Human Resources Skills
Development Committee (CHRSDC)
will be established in each major cluster
with the representatives of engineering
colleges and technical institutions in the
vicinity and the respective industries to
set targets of training and course modules
conducive for the growth of the particular
cluster. The initial focus is on auto, textile,
electronic hardware and leather sectors.
No doubt, the skilled manpower in the
state with healthy working conditions,
a serene industrial climate, committed
work culture and extremely competitive
wage structure that offers substantial
cost savings is the best capital for any
investment.
The government has taken a number
of proactive steps in order to attract
investors. The Vision 2023 document is
the most strategically important step in
this direction. It lays out the roadmap
of development for the state, aims to
achieve a consistent economic growth
rate of 11 percent per annum in a highly
inclusive manner and to identify and
remove the bottlenecks in development,
prioritise critical infrastructure projects,
and work to propel the state to the
forefront of development. The document
identifies 10 themes for the state, which
includes inclusive growth, world class
infrastructure and healthy investment
climate.
In pursuance of the targets fixed under
the Vision 2023 document, the newly
formulated industrial policy addresses
the issues of power availability, land
for industries, skilled manpower, roads
and ports, industrial water, etc. It also
envisages substantial investments to
create additional capacities in various
components of infrastructure in order
to achieve the targets during the 12th
The state is also a leading exporter of leather
products, readymade garments, tea, coffee, spices
and marine products. The state government has
enacted specific policy guidelines in respect of
each sector including the details of incentives, tax
concession, subsidies, etc

Plan (2012-17). Special emphasis
has been given to priority sectors
such as automobiles, biotechnology,
electronic hardware and aerospace.
The policy document also envisages an
investment of not less than $30 billion
through private and public sectors in
infrastructure development; increase in
power generation capacity; establishment
of a land bank of at least 53,000 acres
throughout the state; augmentation of
industrial water supply; effective handling
and safe disposal of industrial effluents
and solid wastes; establishing Corridors of
Excellence to improve port connectivity
and strengthening social infrastructure
such as housing, healthcare, technical
education/skill development, etc. to
support the manufacturing sector.
A salient feature of the state is the
presence of diverse industries. These
include automobile and ancillary
industries, IT, biotechnology, textiles,
chemicals, fertilisers, iron & steel, cement,
sugar, paper and paper products and
railway wagon & coaches. The state is
also a leading exporter of leather products,
readymade garments, tea, coffee, spices
and marine products. The state government
has enacted specific policy guidelines in
respect of each sector including the details
of incentives, tax concession, subsidies,
etc. Such policies and better infrastructure
have attracted Indian and foreign investors
to various sectors.
A unique example is the automobile
industry. No other industry has made
such spectacular growth in the state as
automobile industry. With the presence
of six leading carmakers in the world
namely, Ford, Hyundai, BMW, Renault,
Nissan and Mitsubishi-HM, Chennai has
now emerged as one of the major car
manufacturing centres in the world. The
private players such as Ashok Leyland,
TVS and Annamalai groups and other
joint ventures such as Mahindra, Fiat
India, General Motors India, and Honda
Siel Cars India have reached new heights.
In fact, the entry of Ford marked the
beginning of the modernisation of this
industry in the state. Later, leading names
such as Hyundai and Lancer Mitsubishi
stepped in with diverse variants of passen-
ger cars. Thus, during the period 2000-15,
the annual growth rate of automobile
exports was around 30 percent with a
record turnover $8 billion. Many ancil-
lary industries such as tyre factories and
manufacturing units of auto components
have come up on massive scale.
Leading car manufacturers such as
Ford Motors, Hindustan Motors, Premier
Automobiles have started rolling out
their vehicles from their manufacturing
units in the state, virtually fulfilling the
‘Make in India’ concept. This dramatic
transformation of the automobile industry
in Tamil Nadu is the result of the pro-
active policies of the state government
such as concessions in sales and output
The writer is Author & Public Policy Scholar
taxes, subsidized power tariff and better
physical infrastructure including land.
The main secret behind the success
stories of other industries such as IT,
textiles or biotechnology was such
proactive policies and sector-wise
packages and incentives. Besides, by
‘showcasing’ Tamil Nadu before the
global business community through
‘Global Investors Meet’ (GIM),
roadshows and other campaigns, there was
quantum leap in the total Foreign Direct
Investment (FDI) in the state, which
was $12.5 billion in 2010-14 as against
$6.8 billion during 2000- 2011. Now the
state has targeted 35 percent increase in
FDI aggregating to $17 billion, mainly
from Fortune 500 companies. The 70
percent rise in FDI during the last one
year (2014-15) is a clear indicator that the
state is posed to achieve its target of 35
percent growth. The initiatives by Prime
Minister Narendra Modi to create a more
investor friendly climate and encourage
more FDI will definitely pave the way for
such growth. Our ‘Act East Policy’ would
definitely give an impetus for Tamil Nadu
to establish more cordial ties with many
developing nations of the South East Asia
having ethnic and cultural similarities.

Key Investment
Zones of Kerala
By Dr Kakali Majumdar
K
erala, a state on India’s tropical Malabar
Coast, has nearly 600 km of Arabian
Sea shoreline. Predominantly agrarian in
nature, Kerala leads other states on almost all social
indicators. Its literacy rate is the highest among
the Indian states. In fact, in certain development
indices, it is at par with some of the developed
countries. This paradox is termed as the ‘Kerala
Phenomenon’ or ‘Kerala model of development’.
The state is bordered by Karnataka to the north
and northeast, Tamil Nadu to the east and south,
and the Arabian Sea on the west. Trivandrum
is the capital of the state. There are 14 districts
in Kerala; important cities include Kannur,
Kozhikode, Thrissur, Kolam, etc. Kerala can be
accessed through different modes of transport. It
is easily reachable through roads, railways and air.
Malayalam is the official language of the state.
Kerala is one of the economically developed
states of India in terms of human development
with a per capita GDP of INR 11,819, significantly
higher than the national average. The service sector,
tourism, business process outsourcing, banking and
finance, transportation, etc dominate the economy
with around 63 percent of the state GDP while
agriculture and fishing industry account for around
17 percent of GDP. Although, the manufacturing
industry is lagging behind, this is mitigated by
remittances sent home by overseas Keralites, which
contributes around 20 percent of the state GDP.
Agriculture in Kerala
Agriculture is the most predominant economic
activity in the state. Nearly half of Kerala’s
population is engaged in agriculture. Paddy is the
major food crop of Kerala. Despite this, the area
and production of paddy continues to decline over
the years. Though 50 percent self-sufficiency in rice
cultivation was achieved during the year 1974-75,
the area and production of paddy had declined at an
alarming rate in the later years.
Cash crops such as coconut, tea and coffee
are grown extensively, along with rubber, cashew
and spices. Spices that include pepper, cardamom,
vanilla, cinnamon and nutmeg are commonly
cultivated in Kerala. Kerala continues to enjoy a
near monopoly in the production of pepper, and
constitutes 97 percent of the national output of
pepper.
Industries in Kerala
Kerala government has come forward with
policy initiatives for greater industrial investment
and laid stress on facilitating more private
Kerala is one of the
economically developed
states of India in terms
of human development
with a per capita GDP of
INR 11,819, significantly
higher than the national
average. The service
sector, tourism, business
process outsourcing,
banking and finance,
transportation, etc
dominate the economy
with around 63 percent
of the state GDP

industrial investment in the state. Coir
industry is a major traditional industry
of Kerala, consisting of three major
sub sectors - fibre extraction, spinning
and weaving. Kerala handloom stands
second to coir in providing employment.
Handicrafts industry is also a major
sector of employment generation in
the state. Coconut shell carving, straw
picture making, cane work, bamboo and
reed weaving, ivory carving, bell metal
casting, screw pine and mat weaving are
the major handicrafts in the state. Bamboo
industry that mainly manufactures pulp for
making paper, bamboo ply, etc is also quite
significant in the state. Besides, the other
industries of the state are Khadi & Village
industries, Cashew industries, Fertiliser and
Chemicals Travancore Ltd. (FACT), etc.
The institutions promoting industrial
activity in the state are Kerala Financial
Corporation (KFC), Kerala State Industrial
Development Corporation (KSIDC), Small
Industries Development Corporation
of India (SIDBI), Kerala Industrial
Infrastructure Development Corporation
(KINFRA), Infrastructure Kerala Limited
(INKL), Directorate of Industries &
Commerce (DIC), Kerala Small Industries
Development Corporation (SIDCO),
MSME Development Unit (formerly
SISI), Kerala Industrial and Technical
Consultancy Organisation (KITCO),
Kerala Bureau of Industrial Promotion
(K-bip), Centre for Management
Development (CMD).
IT Sector in Kerala
The second important upcoming sector
in Kerala is Information Technology
(IT). The state is emerging as a future IT
centre of India, thanks to its high internet
connectivity (undersea cable landing
points at Kochi), along with skilled
labour. The government has established
two IT parks in the state - Technopark in
Trivandrum and Infopark in Kochi. The
Technopark in Trivandrum is the third
largest IT park in Asia, and the largest in
India. In addition to Inforpark in Kochi,
an IT park named Smartcity is under
construction by Dubai Internet City. Kochi
is a safe natural harbour, and hence one of
the most important ports of India. A recent
study by the Centre for Development
Studies in Trivandrum have shown
unemployment rate down to 9 percent.
Traditional low-wage cottage industries
such as the processing of coconut fibre and
cashew or weaving employ most workers.
More than a fourth of Kerala’s workers
provide service.
Tourism in Kerala
National Geographic Traveller
has selected Kerala as one of the 50
destinations of a lifetime and one of the 10
paradises of the world. Tourism industry
occupies a prominent place in Kerala’s
economy. It is estimated that around 6.5
lakh foreigners visit the state every year. It
is commendable that Kerala has recently
launched a tourism campaign in London,
which will be rolled out in other major
markets such as Germany, France, Italy,
Spain, Belgium and Switzerland. However,
lack of infrastructure facilities stands in
the way of harnessing the state’s tourism
potential to the full extent. Massive
investments for improving infrastructure
facilities to meet the present and future
requirements of both foreign and domestic
tourist arrivals are required for Kerala.
Fondly known as ‘God’s Own
Country’, the natural beauty of the
beaches, mountain ranges, wildlife,
backwaters and lush green areas offers a
marvellous view. A small town and a hill
station, Munnar, located in the southwest
of Kerala, is a resort town famous for tea
plantations, waterfalls, holiday facilities.
National parks and wildlife are also not to
be missed.
Important Centre or Institute in
Kerala
The state has one Indian Institute of
Management (IIM) in Kozhikode. One of
the major ship building yards of India is in
Kochi. The Southern Naval Command of
India has its headquarters in Kochi, and the
Southern Air Command headquarters is in
Trivandrum. There are three international
airports in Kerala - Trivandrum, Cochin
and Kozhikode. Cochin International
Airport is the first international airport
in India that has been built with private
participation, without the Central
government’s stake. The Directorate of
Economics & Statistics, Government of
Kerala is the nodal agency for collection,
compilation, analysis of statistics relating
to various sectors of Kerala economy.
Scope of Investment in Kerala
Kerala is one of the most preferred
destinations of economic activity in India.
The state is also one of the most investor
friendly states in India, which has gained
from FDI inflows in terms of technological
advancements, increased competitiveness
and growth in export production. Some
of the important factors that attract FDI in
Kerala are:
• Abundance of natural resources;
• Well-developed in terms of literacy,
education and health;
• Located on the transnational trade
corridor;
• Provides considerable advantage in
terms of cost structure to foreign investors;
• Well-developed communication
networks;
• Proactive policies and incentives to
various enterprises.
Kerala government offers various
investment opportunities in the tourism,
healthcare, biotechnology and IT (South
Press Trust of India, 2012). According
to Kerala State Industrial Development
Corporation Ltd. (KSIDC), the key
investment zones of Kerala are tourism,
IT, education, health service, food and
agro processing, rubber and agro based
industries, port and ship buildings,
infrastructure development, MSME, water
technology, etc.
References
Kerala State Information, cited on http://www.
newkerala.com/states-of-india/kerala.php#.
ViNxltIdDR1
South Press Trust of India (2012), Kerala emerging
as most investor friendly state in India’Updated:
November 30
The writer is I/c Director, School of Economics,
Shri Mata Vaishno Devi University, Katra, Jammu
and Kashmir
Tourism industry
occupies a prominent
place in Kerala’s
economy. It is estimated
that around 6.5 lakh
foreigners visit the
state every year. It is
commendable that
Kerala has recently
launched a tourism
campaign in London,
which will be rolled out
in other major markets

Spotting
UK’s
Investment
Terrain
in South
India
By Dr Arup Barman
S
outh India covers Andhra Pradesh,
Telangana, Tamil Nadu, Karnataka,
Kerala and Puducherry. With a
combined GDP of over $300 billion,
these South Indian states together
are among the top 30 economies of the world,
contributing over 22 percent of India’s GDP and 28
percent of India’s employment.
It is projected that South India in the next five
years i.e. by 2020, will become $1,200 billion
economy1
. South India has got large agricultural
base. Some of the main crops cultivated in South
India include rice, sorghum, and ragi. South India
was and still is the ‘promised land’ as far as spice
cultivation is concerned. Areca, coffee, pepper,
tapioca, and cardamom are widely cultivated on
the Nilgiri Hills and Kodagu. Education is highly
valued among the South Indian community, and
is seen as a gateway to better livelihood. It is
commendable that many of the nation’s most
prominent physicists and mathematicians have been
South Indians.
South India - An Industrial Hub of
Economy
The economic scenario in South India is
mainly driven by hi tech industries. Most of the
technology in India is centred in South India. South
India is the second hub of Information Technology
(IT) after Silicon Valley in USA. Along with
Bengaluru, other major cities of South India are
Chennai, Hyderabad and Coimbatore. Information
Technology is a growing field in South India.
Chennai has already established its credential as
an automobile production hub of the world, and
houses the automobile manufacturing giants of the
country. More than 65 percent of heavy vehicles in
the country, such as cars, buses, lorries, trains and
bicycles, are produced in Chennai, and it is referred
to as the Detroit of Asia. The manufacturing
units of BMW, Flextronics, Motorola, Dell, TVS,
Mitsubishi, Ford, Hyundai, Nokia, Nissan, Renault,
Royal Enfield, Hindustan Motors, Mercedes-Benz
are in Chennai.
Coimbatore (also known as ‘Cotton City’ and
‘Manchester of South India’) in Tamil Nadu is
the source of nearly 35 percent of India’s cotton
production. Erode and Tirupur are the largest
producers of cotton vests and textiles in India;
it exports much of its production to South East
Asian and European countries. Gobichettipalayam
is one of the largest producers of white silk with
the country’s first automatic silk reeling unit
established here. Namakkal of Tamil Nadu is one
of the largest producers of poultry in the country.
Currently, Guntur district port NizamPatnam is
South India is
the second hub
of Information
Technology (IT) after
Silicon Valley in USA.
Along with Bengaluru,
other major cities
of South India are
Chennai, Hyderabad
and Coimbatore

being built to implement this plan; the
Czech company Skoda is investing INR
100 billion in the project3. Erode is also
known as the ‘Turmeric City’, credited as
Asia’s largest market for turmeric.
Hyderabad of Andhra Pradesh is the
centre of all R&D in India. Southern states
Andhra Pradesh, Telangana, Tamil Nadu
and Karnataka together contribute to the
majority of industrial production in the
country.
Entrepreneurial Kickstart for
‘Make in India’
South India is emerging as an
entrepreneurship epicentre for the
entire country. Andhra Pradesh attracts
entrepreneurs and ventures to the
petrochemical, energy, infrastructure,
electronics, manufacturing, food
processing, and textile and in automobiles2
.
Karnataka has its own illustrious history
of success of industrial and technological
initiatives pioneered by the ingenious
entrepreneurship during the last three
decades. Today, Karnataka is the home
for more than 80 Fortune-500 companies
and more than 700 MNCs operation.
Karnataka’s biggest story is the growth of
Information Technology (IT)/Information
Technology Enable Services (ITES) led
sector, which accounts for more than 40
percent of India’s software export3
to
the rest of the world. It is projected that
Bengaluru (India’s Silicon Valley) will
overtake the Silicon Valley of USA, and
is anticipated that it will become the IT
capital of the world in 2020. The city is
home to over 200 software companies.
In the Indian entrepreneurial history,
we ﬁnd the name Kakinada of Tamil Nadu.
The capital of Tamil Nadu, Chennai is
the gateway to south India, an epicentre
of technical and engineering education
and entrepreneurial DNA. Chennai is
the second leading software exporter in
India, and it is the home of many software
companies, such as Cognizant, Covansys,
Xansa, Verizon, iSoft, Ascendas, Invensys,
Schneider Electric, etc. Infosys has set up
India’s largest software development centre
to house 25,000 software professionals
at an estimated investment of INR 12.5
billion in Chennai. Through the textile
manufacturing, Tamil Nadu is connected
to South East Asian and European markets
and manoeuvring FDI from European
nations to India. It has become the most
preferred BPO hub in India and South Asia.
The capital of Tamil Nadu, sometimes
referred as the ‘Health Capital of India’ or
the ‘Banking Capital of India’, has attracted
investments from international corporations
and the World Bank.
Tamil Nadu has a network of
about 110 industrial parks/estates that
Topography of Swanky Sectors for Investment in South India
Thrust Areas States
Andhra
Pradesh
Karnataka Kerala Tamil
Nadu
Agri and Agro Based √ √ √ √
Life Sciences and Bio-
Technology
√ √ √
Textile & Apparel √ √ √
Electronics & IT √ √ √ √
Mineral based industry √ √
Automobiles & Auto
Components
√ √ √
Petroleum, Chemicals (including
Fertilisers) and Petrochemicals
√ √ √
Energy and Power √ √
Aerospace &Defence √ √
Tourism √ √
Health Care and Medical √ √
Nanotechnology and other
sunrise sectors
√ √
Education √
Contract Research & R&D √ √
Infrastructure √ √
Water Technologies and water
Ways
√
Industrial Perk and Towshp √
oﬀer developed plots with supporting
infrastructure. Also, the government is
promoting other industrial parks such as
Rubber Park, Apparel Parks, Floriculture
Park, and TICEL Park for Biotechnology,
Siruseri IT Park, and Agro Export Zones
among others. The heavy engineering
manufacturing companies are centred on
the suburbs of Chennai. Establishment of
Biovalleys in Tamil Nadu by promoting
Biotechnology Incubator Park Near
Chennai, Women’s Biotechnology
Park Kelambakkam, Medicinal Plants
Biotechnology Park, Madurai, Marine
Biotechnology Park, Mandapam and
Bioinformatics and Genomics Centre
(BGC), Chennai are the mark of faster
Bio-Techno entrepreneurism in India.
The Thrust Areas for Investment
The governments of South Indian
states are well prepared in spotting
investment topographies for the states.
The common thrust areas for investment
among the states of South India that
constitute the investment topography is
shown in Table 1.
The heavy engineering
manufacturing
companies are centred
on the suburbs of
Chennai. Establishment
of Biovalleys in Tamil
Nadu by promoting
Biotechnology Incubator
Park Near Chennai

Andhra Pradesh offers opportunities for
investment, and is the first state to have a
Single Window Act in 2002 and currently,
it has a single-desk mechanism and the
maximum time for all clearances is 21
days. It is the most preferred logistics hub
and India’s gateway to East and Southeast
Asia. It is estimated that Andhra Pradesh
will attract investment to the tune of INR
2 lakh crore by 2020. Inviting global
investors to take advantage of industry-
friendly policies of Tamil Nadu, Chief
Minister Jayalalithaa has set an investment
target of $250 billion in the infrastructure
sector in the coming years. Kerala aims
to have at least 3,000 IT companies by
2020 under the state’s new Seed Support
System for early-stage investment to
assist new entrepreneurs under the new IT
policy of nurturing ‘one product start up
a day’4
. Kerala offers many advantages
as an investment destination, including a
transparent and responsive administration,
high literacy rate, skilled manpower, one
of the lowest attrition rates in the country,
top class infrastructure, proximity to
the international air and sea routes and
unparalleled data/telecom connectivity.
Karnataka wants to popularise itself as
globally branded state, inviting investors
across the country and abroad.
Search for Foreign Collaboration
India and UK share a long-standing
and highly collaborative relationship,
fuelling the prosperity of both countries.
Diplomats, both in UK and India, believe
that ‘they work together; and together they
are an unbeatable combination’. Britain
has emerged as the G20’s single largest
investor into India, making it the largest
foreign investor into India after Singapore
and Mauritius.
‘Make in India’ - Paradigm for
South India
South Indian leaders and business
houses are constantly searching for
competitive advantage, whether that takes
the form of innovation, quality, cost or
time - they being universal imperative that
will increasingly draw businesses together
in a globalised economy. India and UK are
accelerating the collaboration in advanced
manufacturing, digital innovation,
infrastructure, life sciences and health
care, biotechnology, retail, food, supply
chain and logistics. Skill and education is
another promising sector in South India’s
‘Make in India’ movement. In the context
of the relationship between UK and India,
all these will greatly increase the scope for
future investment collaboration.
The corporate environment remains
challenging for both large and smaller
companies. Despite tentative signs that
the economic environment in UK may be
improving, a focus on earnings growth
and cash flow remains the priority for
most businesses. Here, South Indian states
are offering significant attractions for
UK companies. India Agri-food Supply
Chain report produced by the UK India
Business Council (UKIBC) assesses the
The writer is the (Director (i/c), Centre for East
Asian Business Studies), Department of Business
Administration, Assam University, Silchar. He can
be reached at abgeet@gmail.com
References
1
http://www.thehindu.com/business/Economy/
south-india-major-driver-of-indian-economy-says-
sharma/article2074249.ece
2
Reddy U. Sudhakar. Andhra Pradesh hot on
investment trail (June 01, 2015, 01.45 am IST),
http://www.deccanchronicle.com/150601/nation-
current-affairs/article/andhra-pradesh-hot-
investment-trail
3
http://www.investkarnataka.gov.in/content/
investment-climate
http://www.business-standard.com/article/news-
ians/kerala-targets-3-000-new-it-companies-by-
2020-chandy-113072800628_1.html
4
http://www.newskarnataka.com/bangalore/invest-
karnataka-2015to-popularise-state-at-global-level-
siddaramaiah
current state of agri-food supply chains in
India, and identifies the opportunities for
UK companies. The report concluded that
India has fantastic potential for European
companies for investment, especially in
South Indian states. The ease of doing
business, investment climate, and the
visionary state leaderships have helped
in ushering ‘Made in India’ revolution in
the past. The ongoing efforts will appeal
to investors of UK, who would no doubt
help in ‘Make in India’ revolution in
future.

South Indian States
Potential Areas for Investment
T
he decisive leadership of Prime
Minister Narendra Modi is steadily
transforming the identity of India. The
country is no longer known as just a
low-cost service provider, but a world-
class manufacturing and export hub.
India-UK Business in Numbers
The UK has played a substantial role in the
Indian growth story. As India’s largest G20 investor
and employer, UK is the single largest G20 investor
in India. The British companies account for a
combined revenue of more than $54 billion and
almost 10 percent of all Foreign Direct Investment
(FDI) ﬂows into India. Around 335 UK businesses
currently operate in India in sectors such as diverse
as retail, infrastructure, construction, Information
and Communications Technology (ICT), creative
industries and healthcare. They collectively employ
more than 691,000 people across India, which
make up 7 percent of the total 1.96 million jobs
generated by FDI in India.
According to United Nations Conference
on Trade and Development (UNCTAD) World
Investment Report 2015, India acquired ninth slot
in the top 10 countries attracting highest FDI in
2014, moving up six places compared to last year.
India remains a hugely attractive investment
destination for British companies and several of
them are now household names in India. While the
UK’s core attributes are creative design, innovation,
sustainability, and manufacturing, India’s strength
lies in its talented workforce, rapidly emerging
middle class, culture of entrepreneurship and
improvisation and its domestic market growth
potential. Also the sheer size of the domestic
market – fuelled by growing purchasing power
and size of the Indian middle class, democratically
elected governments, a vast pool of talented
workforce, a legal and educational system rooted in
British tradition and English as an oﬃcial language
– are some of the many factors that make British
investments vie for India as a preferred investment
destination.
India remains a
hugely attractive
investment destination
for British companies
and several of them
are now household
names in India.
While the UK’s core
attributes are creative
design, innovation,
sustainability, and
manufacturing
Diplomatist Bureau

Karnataka
Distinguished as the Knowledge Hub of Asia, Karnataka
has been pioneer in the development of industries and providing
an industry-friendly ecosystem that nurtures the spirit of
entrepreneurship and innovation.
Its biggest success story is the growth of Information
Technology (IT)/Information Technology Enabled Service
(ITES) led sector, which accounts for more than 45 percent of
India’s software export.
Why Karnataka
• Karnataka is the 3rd largest FDI receiving state in the
country;
• The state is also home to largest number of Research and
Development (R&D) Centres in India;
• The World Economic Forum has identified Karnataka
among the top 4 innovation hubs in the world. World
Bank’s Investment Climate Index has ranked Karnataka
No. 1 for a ‘Healthy Business Climate and Attracting
Investments’;
• The state has the distinction of having built a healthy
eco system for Information Technology, Bio Technology,
Aerospace, Semiconductor, Electronics and Hardware.
What Govt offers
• Government has taken many steps to promote Ease
of Doing Business. One can apply online for most of
investment approvals;
• The government has also simplified procedures for purchase
of land for industries;
• New Industrial Policy 2014-19 provides an excellent
package of incentives and concessions for new investments;
• The state has set aside many vacant land and plots that
are available in various industrial areas for taking up
investments. Sector specific parks such as Aerospace Park,
Textiles Parks, Food Parks have been established to cater to
specific needs of the entrepreneurs of those sectors;
• A proactive government, investor-friendly policies,
excellent human resource, good infrastructure and a very
congenial industrial climate have been Karnataka’s Unique
Selling Proposition (USP).
Key Thrust Areas
Besides IT, some of the other key potential sectors
identified for investors are Bio-Technology, Nano Technology,
Automobiles and Auto Components, Aerospace, Machine
Tools, Animation and Gaming, Telecommunication, Agri
Business, Apparels, Minerals, Food Processing, Aerospace,
Oil Refining and Petro Chemicals, Tourism, Wellness Tourism,
Contract Research, R&D, Power Sectors and Infrastructure
projects. Puducherry is a Union Territory of India formed out of
four exclaves of former French India.
Key South Indian States and their
Potential Areas of Thrust

Puducherry
Why Puducherry
Puducherry is well established on the tourist circuit. Its main
highlights are:
• Eco-friendly and pollution free;
• Proactive administration;
• Attractive government incentives;
• Reliable connectivity – state-of-the-art communication
networks;
• French past and heritage – a very good marketing platform;
• Aurobindo Ashram and Auroville-unique spiritual centres that
draw thousands of visitors every year from round the world;
• Delightful beaches, backwaters and engaging landscapes
unique to the area;
• Stable socio-political environment;
• High socio-economic indicators;
• Skilled manpower available easily;
• Reliable power and good roads;
• Visible and growing demand for novel entertainment options
and avenues.
Key Thrust Areas
The following are the key areas earmarked for promotion by
the government of Puducherry with the potential to offer good
Return on Investment (ROI):
• Heritage and star hotels;
• Food courts and restaurants;
• Amusement parks;
• Arts & Crafts village;
• Boutiques;
• Eco-tourism
• Beach resorts;
• Yacht & Boat Marinas;
• Health centres and spas;
• Convention centres;
• Entertainment multiplex.
What Govt Offers
Puducherry, one of the most popular tourist destinations in
India, recognises tourism as an industry and offers a slew of
incentives for investors.
• Investment opportunities exist to develop star & heritage
hotels, amusement parks, multiplexes, food courts, beach
resorts, eco-tourism, health spas, art & craft village and other
tourism relates products;
• Incentives include investment subsidies and exemption from
luxury tax. Special incentives are also offered for heritage
hotels;
• All investments enjoy unstinting support from the government.

The state of Tamil Nadu is known for its decisive and stable
political leadership. The state has many inherent strengths and
competitive advantages to offer to investors. The state facilitates the
creation of foreign and local ventures, thanks to an investor-friendly
and transparent decision making process, coupled with sound
diversified industrial infrastructure, comfortable power situation,
abundant availability of skilled manpower, harmonious industrial
relations and high quality of work culture and peaceful life.
Why Tamil Nadu
• One of the top three fastest growing states in India;
• Cost effective;
• Sriperumpudur - India’s largest electronic cluster with world’s
largest mobile handset manufacturing unit
• Chennai - the largest automobile cluster hub and poised to
become No. 1 among world’s top 10 auto clusters;
• Rated one of the top three states in terms of infrastructure
development - CMIE index of infrastructure development;
• Power generating capacity of about 18083 MW, which is
second largest in the country;
• Communication – largest bandwidth and high tele-density;
• 19 industrial parks, 92 Special Economic Zones, 4 modern sea
ports
• Adequate infrastructure, large areas have been earmarked for
FDI projects;
• A steady supply of affordable skilled manpower;
• A reasonable cost of living.
Key Thrust Areas
• FDI in Tamil Nadu is dominated by investments in the IT
sector. Chennai and the Tamil Nadu region as a whole have
been attractive destination for FDI for the past decade.
Chennai has emerged as a major hub of software development
in the country, and has the potential to become an IT corridor
to South East Asia;
• The state also has a fair share of electronics manufacture and
assembling in India, and Chennai is world famous as the ideal
location for software projects in India. The region is also home
to the largest mainframe capacity in Asia;
• Opportunities for investment in software centres are facilitated
with new investor- friendly IT policy. Companies such as
Alcatel, TCS, Ramco, Pentafour, Cognizant, Singapore
Airlines, EDS, Infosys, etc have set up their base in Chennai.
Related segments such as medical transcription, call centres,
and GIS mapping are fast emerging as a preferred FDI
segment in Tamil Nadu.
• The automobile industry has undergone a dramatic
transformation in the recent past in Tamil Nadu and with the
introduction of the new generation vehicles, several tie-ups
with foreign companies have taken place. The sub-sectors
receiving foreign technology and investment are automotive
electronics, casting and forging, precision electric parts and
components, interior and exterior trims, decorative plastics,
complete systems and assemblies, safety and environment
related equipment;
• Tamil Nadu has attracted many major, automobile components
manufacturing facilities such as Ford, Hyundai Motors &
HM-Mitsubishi, SAME tractor project & expansion of TAFE,
Ashok Leyland - IVECO truck project, etc;
• Readymade garments including knitted and woven garment
sector is the biggest net earner of foreign exchange for India.
Tamil Nadu is a major player in this segment, owing to its core
competencies of low labour cost, local availability of a variety
of yarns and fabrics specifically cotton and a vast pool of
entrepreneurial talents;
• Tamil Nadu also has a rich resource endowment. Fruits such as
mango, banana, citrus and vegetables & spices are abundantly
available. Food processing & floriculture have been identified
as thrust sectors by the state government for special incentives.
Potential projects in this sector are (i) 100 percent EOU
Chicken Processing Project (ii) Freeze-dried food products
(iii) Integrated Floriculture Project (iv) Cold Chain (v) Food
irradiation facility;
• Tamil Nadu also has scope in pharmaceuticals as well. Orchid
Pharmaceuticals, Dadha Pharma, Malladi, Citadel, and other
companies have set up plants in Tamil Nadu.
What Govt Offers
• Land on industrial parks;
• Structured incentives package of support for projects
depending on investment size;
• Single window facilitation and in principal composite approval
on a fast track mode within 30 days;
• Dedicated project facilitation committee to oversee entire
project;
• 50 percent stamp duty concession on land from SIPCOT;
• Electricity tax exemption and capital subsidy depending on
investment and employment.
Tamil Nadu

Andhra Pradesh
Andhra Pradesh
The state has the second longest coastline of 972 km (604 mi)
among all the states of India, second only to Gujarat. As many as
9 of the 13 districts have sea coast along the Bay of Bengal, which
has created several manufacturing and export-centric industries.
Why Andhra Pradesh
• Large pool of skilled workforce;
• 8,500 MW installed capacity, 15,000 MW in pipeline, power
cost is affordable & competitive compared to other states;
• 100 percent reimbursement of stamp duty and transfer duty
paid by industry for land meant for industrial use;
• 25 percent of the tax paid during a financial year will be
ploughed back for 5 years (VAT reimbursement);
• Tailor made incentives for investments of $50 million and
above.
Key Thrust Areas
Over the years, Andhra Pradesh has established itself as a
preferred FDI destination in the following sectors:
IT, Bio-Technology, Nano Technology, Auto Components, ,
Minerals, Oil Refining and Petro Chemicals, R&D, Power Sectors,
Infrastructure and many others.
Key Regions with FDI projects
Visakhapatnam has emerged as a major industrial centre.
Several public and private sector establishments produce large
scale industrial goods ranging from steel, metals, petroleum,
polymers, fertilisers, heavy engineering equipment, ship building,
ports and fishing.
Kakinada has multiple fertiliser refineries and produces large
scale natural gas from the offshore of KG basin. Kakinada also
exports seafood and related products and produces agricultural
products such as rice and corn, edible oils, oil meals, processed
food products, chemicals, biofuel, etc.
Vijayawada is famous for processing of agricultural products,
automobile body building, hardware, textile, consumer goods
and small scale industries. Andhra Pradesh has one major port
at Visakhapatnam and several medium-sized ports such as
Gangavaram, Kakinada & Krishnapatnam; for the export of cargo
traffic.
Along with the above mentioned key regions, the state has set
up the following specially designated conclaves for FDI projects:
Special Economic Zones
• Tax-Free industrial areas deemed to be outside customs
territory of India enjoying single window clearances;
• Time bound clearance/approval – Provision for deemed
approval – Self Certification by the Industrial units.
Pharma City, Vizag
• Pharma City - A sector specific industrial park with globally
competitive facilities, which makes it an ideal destination for
bulk drug, pharmaceuticals & fine chemical units;
• A sector specific industrial park for pharma companies
developed by Ramky Group in association with Govt. of
Andhra Pradesh Plug & Play facility for pharma units;
• 6000 acres - Multi-Product Special Economic Zone (SEZ),
Domestic Tariff Zone (DTZ) and Free Trade Warehousing
Zone (FTWZ);
• Housing Companies Kobelco- Japan, Lavazza – Italy,
Control Components Inc – USA, Amphenol- USA, Venture –
Australia, BFGBahrain, Al-Reyami/ Rockworth – Dubai, and
Tablets India;
• Aligned with the Work-Live-Learn-Play concept.
IFFCO Kisan SEZ Limited
Agribusiness based SEZ on the concept of agroparks. It comes
with many customs duty and sales tax concessions provided by
the government of India to promote economic activity in notified
SEZs spread over approximately 1000 hectares and situated in
Nellore district of Andhra Pradesh on Pennar River basin.
• Has a dedicated railway siding;
• Three hours drive from international airport;
• Spread on both sides of NH-5 I

• Telangana is a state in South India. It was formed on June 2,
2014 with the city of Hyderabad as its capital.
• Lately, many big corporate names have inked deals with the
Telangana government, thanks to the state’s new industrial
policy that offers many benefits to FDI based projects.
Special Thrust Areas
Telangana state government recognises the following 14
sectors as thrust areas in which any investments will be accorded a
higher priority over others:
• Life Sciences including, bulk drugs, formulations, vaccines,
nutraceuticals, biologicals, incubation centers, R&D
facilities and medical equipment
Hyderabad is the bulk drug and vaccine capital of the country.
The govt feels while the leadership in formulations and bulk
drugs has to be maintained, new opportunities such as life-
saving drugs, new vaccines have emerged. There is an urgent
need to encourage this sector, especially in the emerging life
sciences areas;
• IT Hardware including bio-medical devices, electronics,
cellular communications, FAB
Telangana has a robust IT software sector, which will
complement IT hardware. The government of India has
approved IT Investment Region for Hyderabad as well as two
electronic manufacturing clusters.
• Precision Engineering, including aviation, aerospace,
defence
Hyderabad is home to a large number of defence aero-space and
defence research laboratories such as DRDO, DRDL, RCI, BDL,
MDN, Ordnance Factory, DMRL etc. In addition to the 5 large
Tata investments in aero-space, there is also the GMR MRO. A
group of innovative aero-space SMEs also exists in Hyderabad,
which has supplied components to the Chandrayan (India’s
Moon Mission) and Mangalyan (India’s Mars Orbiter) initiatives.
The government of India has also announced 49 percent FDI in
defence sector creating huge investment opportunities.
• Food processing and nutrition products including dairy,
poultry, meat and fisheries
Telangana is a large producer of agro-products such as cereals,
pulses, oilseeds, fruits and spices. It is also the market leader
in the poultry and seed business. To add value to agro-products
and to maintain and expand the existing strengths as well as
to partner with the national Food Processing Mission, there is
enough room for FDI based project in this sector.
• Automobiles, Transport Vehicles, Auto-components,
Tractors and Farm Equipment
The automobile industry is an important sector for the state. A
lot of FDI is still needed in this sector.
• Textiles and Apparel, Leather and leather value added
products such as shoes, purses, bags, artificial material
infused and coated textiles, paper and paper products
industry
There is tremendous potential for paper and paper products
industry in the state due to the growing demand for such
products.
Telangana
• Plastics and Polymers, Chemicals and Petro-chemical, glass
and ceramics
The products of this sector are consumed on a daily basis all
over the country. This sector is critical for a large number of
MSMEs also.
• FMCG and Domestic Appliances
The growth rate of the Fast Moving Consumer Goods and
Domestic Appliances sector has been phenomenal. Telangana
is centrally located in India and for the FMCG and Domestic
appliances sectors, transportation costs are very critical. It is
important to take advantage of the locational advantage of the
state, especially for this sector.
• Engineering and Capital Goods, including castings, foundry
and Ferro-alloys and other metallurgical industries
This sector is very important if the state has to capture the
entire value chain of the automobile, aero-space, petro-
chemicals, domestic appliances, and paper and textile sectors.
The thrust areas in this section will provide the supply chain to
other sectors.
• Gems and Jewellery
Hyderabadi pearls and lacquer bangles made by local
artisans are known all over the world. Value-addition to these
traditional products and diversification into other gems and
jewellery items has huge scope for investment.
• Waste Management and Green Technologies
This is the sector that will become mandatory for all industry.
Telangana has functional model of SPV/JV efforts of waste
management, which has tremendous growth potential.
• Renewable Energy and Solar Parks
This sector is a priority all over the world. Telangana has huge
stretch of land suitable for non-conventional and renewable
energy installations.
• Mineral-based and wood-based Industries
Most of the minerals such as granite, quartz and silica-sand
are exported in raw form with minimal processing within
Telangana. Similarly, bamboo and other MDF-suitable plant
material could also be exploited.
• Transportation/Logistic Hub/Inland Port/Container Depot
The state of Telangana is centrally located and has the potential
to become a major transit and logistic hub. Thus, logistics is
also one segment that has good investment potential.

Kerala
Chennai-Bangalore Industrial Corridor
Project
The Chennai-Bangalore Industrial Corridor
Project is an upcoming mega infrastructure
project of government of India. The corridor
plans to come up along Chennai, Sriperumbudur,
Ponnapanthangal, Ranipet, Chittoor, Bangarupalem,
Palamaner, Bangarpet, Hoskote and Bengaluru. It is
expected to boost commerce between South India
and East Asia by enabling quicker movement of
goods from these places to the Chennai and Ennore
ports.
The investment potential in the corridor is
more than $1 billion with the area expected to have
industrial clusters in agro and food processing, auto
and auto components, textiles, IT&ITES, electronics
hardware and renewable energy.
Further, since the Bengaluru-Chennai-
Hyderabad region is considered an aerospace
triangle whereby govt plans to create aero parks
across multiple locations, this could be an attractive
FDI segment for many UK-based aviation and air
defence related companies.
Chennai-Vizag Industrial Corridor - India’s
First Coastal Corridor
The Vizag–Chennai Industrial Corridor VCIC
is touted as one of the dream projects to transform
Andhra Pradesh as the most developed state within
10 years of its commissioning. Once completed,
Asian Development Bank (ADB) projections say,
manufacturing output will reach INR 3 lakh crore by
2025 and INR 7.82 lakh crore by 2035.
The Vizag–Chennai Industrial Corridor (VCIC)
is a key part of the planned East Coast Economic
Corridor that is poised to play a critical role in
driving India’s new ‘Act East Policy’. The policy
recently outlined by Prime Minister Narendra Modi
is a proactive initiative focussed on increasing
the integration of the Indian economy with the
economies of the Association of Southeast Asian
Nations (ASEAN). VCIC’s long coastline and
strategically located ports provide it with an
opportunity to create multiple international gateways
to connect India with the vibrant global production
networks of Southeast and East Asia that form the
bedrock of global manufacturing today.
Out of the four proposed economic nodes viz.
Visakhapatnam, Kakinada, Gangavaram-Kankipadu
and Yerpedu-Srikalahasti, Visakhapatnam node
will focus on pharmaceuticals, metallurgy, non-
metallic minerals, chemical, petrochemicals and
food processing and Kakinada node will promote
food processing, chemical and petrochemical, paper
and non-metallic minerals. Gangavaram-Kankipadu
node will focus on pharmaceuticals, metallurgy, food
processing and non-metallic minerals and Yerpedu-
Srikalahasti node on electrical equipment, textiles,
food processing, metallurgy and non-metallic
minerals. Once operational, all these regions will
offer excellent platform for any FDI projects.
There exists ample scope for UK companies
in the vibrant states of South India, and they must
actively engage with the region.
Kerala is one of the most beautiful tourist attractions in India.
Why Kerala
Besides being one of India’s most popular tourist destinations, Kerala also
enjoys the distinction of being the state with the highest literacy rate in the
country, along with lowest infant mortality and highest life expectancy rates
compared to any other state.
Telangana is also one of India’s most progressive states in terms of social
welfare and quality of life. The state also boasts of world-class health care
systems.
Special Thrust Areas
• The tourism industry in Kerala is thriving and offers immense scope for
the future. The efforts of the government have spruced up hotel and travel
industries in the state;
• Spices still dominate the commodities trade in Kerala. Three-fourths of spice
exports from India are sourced from Kerala, which offers excellent ROI;
• The state also leads in the production of cocoa, coffee, and tea. Agriculture
in the state has the tag of producing the highest income per cropped area and
hence, is a sound investment option;
• The state also has potential in the IT sector. Special concessions given to
the IT sector have prompted many major software industries to set up their
operations in the state. IT parks have already been opened up in Kochi and
Thiruvananthapuram;
• There is an abundance of natural resources in Kerala. The quarrying and
mining industry have rapidly grown in the state;
• The manufacturing industry also holds prospects. The chemical and fertiliser
manufacturing industry has grown manifold. The growth of tourism and
IT industries opens up the gates for the construction industry, which is yet
another area that is beginning to yield good ROI;
• The textile industry is also gaining in prominence;
• Another area is the fishing industry. Kerala contributes about half of the
country’s marine fish requirements. Marine life, such as shrimp, sardines,
lobster, tuna, and squid, has great demand overseas;
• Kerala holds significant industrial potential due to good infrastructure
facilities such as power, transport, airports, ports, and the availability of rare
minerals for any potential investor.

UK & South India
Being ‘Pound Wise’
By Alankar Srivastava
T
here is an emerging trend of looking beyond
traditional investment hotspots in India
such as Delhi and Mumbai. Apart from
large foreign companies, small and medium scale
enterprises in UK are also realising the potential of
South Indian states - Andhra Pradesh, Telangana,
Karnataka, Kerala, Tamil Nadu, and Puducherry.
South Indian states are witnessing an increase
in per capita income and a decrease in poverty,
thanks to effective governance and leadership.
Lately, more and more UK Small and medium-
sized Enterprises (SMEs) are making South India
their destination to explore and tap into the plethora
of opportunities.
The UK India Business Council (UKIBC)
has set up business centres in India along with
UK Trade and Investment (UKTI) and the British
Business Groups (BBGs). The business centres
look at ways to transform the way UK companies
operate and help them explore emerging markets
in India.
“The centre will help UK small and medium-
sized businesses work closer with more established
British businesses in India and provide them
with the support needed to capitalise on the huge
potential of the Indian market. The network
of centres across India will also increase the
number of UK companies doing business in India,
contributing to prosperity in both countries,” UK
Minister for Trade Lord Green said during the
launch of the business centre in Gurgaon.
Patricia Hewitt, Chair, UKIBC, sums it up
really nicely: “Bengaluru is a great city, in which
many British companies are already thriving,
particularly technology-focussed companies. This
is an incredibly interesting and positive time to
be in India, and UK businesses share the fresh
optimism among Indian corporates. There are high
hopes for a truly investment-friendly business
environment. We are in the right place and at the
right time to cater to the rise in interest, especially
among UK based SMEs wanting to explore the
Indian market.”
South India is not merely an outsourcing and
low-cost destination. Collaboration in innovation
and research will be a win-win situation for both
UK as well as South India.
The UK and Indian economies complement
each other. The Indian government has identified
development of certain sectors as the key to rapid
economic development. These include – finance,
infrastructure, energy, education and healthcare. It’s
here that the UK companies fit in so well, thanks to
their proven expertise.
Areas where UK Companies can Focus on
in South India
• Information Technology (IT);
• Automobile industry - UK industry can offer
expertise in vehicle development, testing and
validation programs, as well as supply chain
opportunities;
• Modernisation of airports;
• Increasing ports capacity;
• Setting up new water and sewage treatment
plants;
• Improving road connectivity;
• Setting up of industrial corridors to improve
industrial infrastructure;
• Creation of large scale manufacturing zones;
• Coal based thermal power;
• Oil and gas;
• Nuclear and renewable energy;
• Supply of raw materials and equipment;
• Research and Development (R&D);
• Licensed manufacturing;
• Joint ventures;
• Technical and vocational education.
South India and UK are working together
to increase the scope for future investment
collaboration. For the UK companies that are
aiming a turnaround in their economic fortunes,
South Indian states offer a tempting proposition.
The ease of doing business, transparency,
accountability, and effective leaderships will
encourage more and more UK companies to invest
in South India.
“Bengaluru is one of the future faces of India - hi tech, cosmopolitan and global in outlook. It is
a great place for British - Indian collaboration in science, innovation, trade and cultural relations.”
– Ian Felton, Deputy High Commissioner
British Deputy High Commission, Bengaluru
The writer is the Editor-at-Large of the Diplomatist

India-UK Relations
Bonhomie that Stood the Test of Time
By Ashish Pandey
B
oth India and the United Kingdom (UK)
share an extraordinary relationship.
Putting succinctly and indubitably subtly,
the alliance can be best illustrated as that of ‘the
courtier and the courted.’ The liaison finds its
derivation in the lengthy past and matures after
passing through various crests and troughs into
brawny perpetual bond.
From being ruled over 200 years to standing as
an equal trading partner, India has witnessed it all
and so has the UK. In short, the relations between
India and UK, at present, are both warm and
forthcoming.
Ministry of External Affairs, India in 2012
astutely described the relationship between the
two great nations: “India appreciates cooperation
extended by UK in a number of areas, which have
contributed to India’s overall development efforts,
particularly through capacity building, exchange of
best practices, knowledge sharing and sharing of
technology and technical expertise. The bilateral
cooperation between India and UK has been and
remains mutually beneficial.”
For those who are incapable to comprehend still
where the account is heading, will relate instantly
once we talk about English cricketing titans such as
Nasser Hussain and Monty Panesar.
Talking about Naseer Hussain, in particular,
the man born in Madras, India and later went on to
become one of England’s best Test cricket captains
shows how enormous the flow of talent, manpower
and ideas has been over the years between both
nations.
The ever underpinning association between
the two countries has been perfectly depicted in
a fantastic speech by Hugo Swire, the British
Foreign Minister in 2012. One of the excerpts from
the dialogue amusingly portrays the quintessence
of comradeship: “The Orbit, designed by Anish
Kapoor and funded by Lakshmi Mittal made a
permanent mark on the Olympics this summer
and will remain one of the sights of London. And
The decisive
leadership of Narendra
Modi is steadily
transforming the
identity of India. The
country is no longer
known as just a low
cost service provider,
but a world class
manufacturing and
export hub

I am wholly convinced that Lord Coe’s
successful stewardship of the London
Olympics was due in no small part to his
Indian heritage!”
He further goes on to highlight the
unparalleled contribution of the Indian
diaspora, in the English economy that has
generated over 700 businesses and more
than 100,000 jobs, with Tata leading the
pack.
The India diaspora in UK is one of the
largest ethnic minority communities in the
country, with the 2011 census recording
approximately 1.5 million people of Indian
origin in the UK equating to almost 1.8
percent of the population and contributing
6 percent of the country’s GDP. The
High Commission in London remains
in continuous touch with the diaspora in
seeking their advice on taking India UK
relationship forward.
Indian Independence and Change in
Ideological Divide
The British ‘Raj’ was the rule of Great
Britain in the Indian subcontinent between
1858 and 1947. The term is also referred
to as the period of dominion. As a result
of over 200 years of British rule, Indian
psyche remained suspicious of the UK for
many years after independence.
India supported the Soviet Union
during the Cold War era, while the UK
was part of NATO. The ideological divide
existed for subsequent years until India
entered the economic liberalisation epoch,
and Soviet Union disintegrated in the
1990s. This involuntarily led to a marked
departure from the rigid ideological
segregation of once.
The scenario improved considerably
when the then Prime Minister Narasimha
Rao invited British counterpart John Major
as Chief Guest to India’s Republic Day
parade in 1993. This acted as a major ice
breaker and catalyst for ‘modern-day’
bonhomie between the two nations. In
short, economic liberalisation and end of
Cold War acted as major triggers for the
re-bonding between India and the UK.
Nevertheless, it was after David
Cameron took over the reins as UK prime
minister that the rapport discovered its
true potential. Although it took him many
years to visit India after his arrival at the
Downing Street in 2010, the relationship
only grew better and within no time once
he did.
Incumbent Political Scenario
Since becoming the Prime Minister
of Britain, Cameron has been actively
involved in enhancing the Indian-British
relations on various dimensions, such as
‘business, energy security, climate change,
education, research, security and defence,
and international relations.’
His effort can be seen in his political
visits in India on February 18-20, 2013
and on November 14, 2013. Following
his visit, other politicians such as former
UK Foreign Secretary William Hague
and Chancellor of the Exchequer George
Osborne visited India to realise a trade
mission in July 2014. During their visit,
Osborne announced that a statue of Gandhi
would be erected in London Parliament
Square to commemorate the 100th
anniversary of Gandhi’s return to India
from South Africa.
Upon inaugurating the statue on March
14, 2015, Cameron stated, “Our ties with
India have remained close throughout
history and continue to go from strength
to strength – through mutual respect as
equals, through cooperation, trade, and of
course through the one-and-a-half million
Indian diasporas living in Britain today
who bring our two nations closer, to the
benefit of both.” He further commented
that the statue will “enrich the firm bond
of friendship between the world’s oldest
democracy and its largest.”
India UK Business Landscape
The decisive leadership of Narendra
Modi is steadily transforming the identity
of India. The country is no longer known
as just a low cost service provider, but a
world class manufacturing and export hub.
India-UK Business in Numbers
The UK has played a substantial role
in the Indian growth story. As India’s
largest G20 investor and employer, the
UK is the single largest G20 investor in
India. The British companies account for
a combined revenue of more than $54
billion and almost 10 percent of all Foreign
Direct Investment (FDI) flows into India.
Around 335 UK businesses currently
operate in India in sectors such as retail,
infrastructure, construction, information
and communications technology, creative
industries and healthcare. They collectively
employ more than 691,000 people across
India, which make up 7 percent of the total
1.96 million jobs generated by FDI in India.
India is Preferred FDI Destination
for UK Companies
According to United Nations
Conference on Trade and Development
(UNCTAD) World Investment Report
2015, India acquired ninth slot in the top
10 countries attracting highest FDI in 2014,
moving up six places compared to last year.
India remains a hugely attractive
investment destination for British
companies and several of them are
now household names in India. While
the UK’s core attributes are creative
design, innovation, sustainability,
and manufacturing, India’s USP lies
in its talented workforce, it’s rapidly
emerging middle class, its culture of
entrepreneurship and improvisation and
its domestic market growth potential. Also
the sheer size of the domestic market –
fuelled by growing purchasing power and
size of the Indian middle class, continual
democratically elected governments, a
vast pool of talented workforce, a legal
and educational system rooted in British
tradition and English as an official
language – are some of the many factors

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