India Inc creates 4k new jobs in Uk; replaces Japan as largest Asian supplier of FDI

Discussion in 'Economy & Infrastructure' started by Singh, Jun 24, 2009.

  1. Singh

    Singh Phat Cat Administrator

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    LONDON: Indian companies are still investing in the UK in droves, though the action seems to have moved to the medium and small sector.

    India retains its position as the second highest foreign employer in the UK, after the US, according to the 2009 UK inward FDI official data.

    This year, Indian inward investors created 4,149 new jobs, with 108 new projects, up 44% in the absolute number of projects. Indians account for 11% of new jobs created by foreigners in 2008-09, out of around 35,000 new jobs.

    Indians have been responsible for 7,966 British jobs in 2008-09, including ‘safeguarded’ as in jobs protected by the entry of foreign employers, at a time when the UK jobless figures peaked at over 2 million for May.

    Last year, however, thanks to the mega Tata deals, India created over 19,000 British jobs, with just 75 new projects. While the number of projects has risen, the sizes have dropped. The US, still the largest inward investor in the UK, set up 621 new projects this year, but employed only 12,888 new people. It had created over 29,000 jobs last year, with only 478 new projects.

    Indian investment into the UK, which measures FDI in terms of the number of jobs created and protected and not absolute value, has exponentially gone up in the recent past, rising from an almost non-existent base of 892 jobs in 2003-2004 to about 37,664 over the past few years.

    India also replaced Japan as the largest Asian supplier of FDI projects this year, with significant investments in IT, life sciences and advanced engineering. Biocon established its European HQ in the UK and Dr. Reddy’s acquired a clinical trials unit.

    In the communications sector, GTL Europe opened four new offices, while engineering company Dynamatic Technologies continued to expand its operations in the UK, says the UK Trade and Investment report. UKTI is the UK government’s main inbound and outbound investment department.

    Despite the recession, UK has managed to retain its position as the world’s second favourite destination for setting up new projects, second only to the United States. New projects, including establishing offices and headquarters, have gone up – 251 HQ and European head offices were set up - but this year’s results show a marked decrease in M&A and joint venture activities, down 6%.

    Another key trend is the change in sectoral composition – creative industries emerged as the fastest growing new sector, with inward investments rising by about 65%, though on a lower base. Software, advanced engineering, business services, ICT and Life sciences were the other favourite sectors for foreign investors.

    Reiterating UK’s stance on ‘open for business,’ Lord Peter Mandelson, business secretary said “The UK maintains the best effective regulatory environment for global investors and businesses to thrive. We have to assess the merits of regulations, to consider if there are alternatives and, if there aren’t, ensure they are smart and do not serve to suffocate businesses,” he said.

    India Inc retains appetite for UK cos, creates 4k new jobs- Jobs-News By Industry-News-The Economic Times
     
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  3. Sridhar

    Sridhar House keeper Moderator

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    Even is US we have created around 30,000 jobs

     
  4. Daredevil

    Daredevil On Vacation! Administrator

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    India is the only developing country with the abnormality of more outgoing FDI compared to incoming FDI. This tell us that our domestic industry is very well developed and indeed giving MNCs a run for their money in foreign shores. Good job by Indian businessmen. This is what separates us apart from Chinese model of development where it is completely state-driven while in India it is industry/market driven.
     
  5. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    This trend will continue as the Indian economy grows.
     
  6. Koji

    Koji New Member

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    False. If it was state driven, then China would've experienced the high growth rates pre-1980's. The fact that China exploded after the market reforms tells you that China's growth is driven by industry/market as well.
     
  7. Daredevil

    Daredevil On Vacation! Administrator

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    Tell some one else. Not me.

    Just look at FDIs into China and correlate it with growth rates of China over years. Whenever there was increased FDI, there was increased growth. Many foreign companies have invested in China taking advantage of tax-breaks and cheap labor which resulted in cheap made-in-china products right from bolts and nuts to computers.

    Most of the companies established by Chinese citizens are backed by state and mostly established by former CCP/PLA employees utilizing the loans given by state-owned banks not on the worth of business plans but on the worth of individual and his significance in CCP/PLA. And we know what kind of products they produce - melamine contaminated milk, toxic chairs, toxic pet food, toxic toothpastes and low quality cheap electronic knock-offs which doesn't even last the life of my toilet paper :D.
     
  8. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    The Chinese method is to first to build the infrastructure and then generate a market.This theory is accepted by all analysts.

    For eg: Any ISP will provide 250000 ports(especially state owned BSNL) when they start off, after demand grows they increase the capability to 1000000 ports. As market grows, BSNL takes the count to 5 million ports. This is how market dynamics works in India.

    In China, the ISP will already have 20 million operational ports and will keep adding ports faster than the market growth.

    In cars too, China makes the cars first and then looks for buyers. In India companies first find the buyers and then make cars.
     
  9. Antimony

    Antimony Regular Member

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    That model probably means that they would have lower Total Cost of Ownership compared to Indian companies. If initial cash is available that is a possibility. The corollary is that if demand does not take off, then you wasted your investment.
     
  10. badguy2000

    badguy2000 Respected Member Senior Member

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    one hand, India itself is hungery for fund. on the other hand, India domestic fund would rather invest oversea than invest in India.

    what is the meaning of the case?

    the reasonable explaination is that India's investors are not satifactied with the investing sourounding like infastructures and feel that to invest over sea is better option than to invest in India.
     
  11. badguy2000

    badguy2000 Respected Member Senior Member

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    unlike India, China started to mass-invest oversea ,after China has acculmulated too much fund and is not short of fund any more
     
  12. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    badguy,

    that is too short sighted a vision, to begin with no company gets into a business to do charity and then it depends on the vision a company has. india has had numerous companies who even after having all the resources to take over the best of the names in the international business do not feel the need to take over international businesses or move international for they just want to focus on the domestic market from where they get adequate growth, a perfect point in case is reliance industries limited and this becomes a case study since there are indian companies which as low a turnover of some 10-20m usd have shown the ability to taking over off shore businesses. the whole point looses the argument given when india last fiscal was able to attract somewhere between 35-40b usd as fdi which quite clearly shows india is a very attractive destination for investments.

    this in fact speaks volumes of the vision of an indian business man and his entrepreneurship skills which further shows the appetite he has to go international and face and beat the competition in their own home ground. if any thing one should sit and admire the indian businessman who if he keeps going the same way will not just come up with a few leading international names that we all know of toady but they will swell in numbers in another 10years time from now with occupying some of the top 10 slots in most categories, not only that if one is to check a few lists presented by forbes for the best performing upcoming businesses world wide for the past few years, indian businesses have always scored well and have been few of the top rankers on that list.

    these are also ambassadors of the country as they generate employment in the host country and in times to come they will be a tool of indian diplomacy since through them india will most certainly be able to push its agendas in the international arena. mind you the driving force of indian growth for the most part since 1991 has been our private businesses and as they rise this will be the rise of a soft india when in days to come the best businesses owned will be by the indians with their hq in india. its all about vision my friend and if the vision is to grow turnovers at a speed of few multiples then one the bast path of doing the same is by taking overseas businesses and mind you such opportunities are not many in india since most of the businesses are on the same path.
     

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