By Subrata Majumder
The fourth Bengal Global Business Summit in February 2019 showcased hope for resurgence of business opportunities, with Chief Minister Mamata Banerjee’s attempts to woo big investors being noticed across the board. Presence of big investors like Laxmi Mittal, Mukesh Ambani, Kishore Biyani, Sajjan Jindal, among others pitched for a re-look by the investors in Bengal. The summit proved a big success when she could manage the presence of pro-Modi entrepreneurs such as Mukesh Ambani and Gautam Adani.
In addition, surge in foreign investment exemplified that Bengal meant business.FDI surged in Bengal during Mamata regime, and the FDI flow into Bengal was markedly higher than it was in the two decades of Communist regime.
Nevertheless, Bengal is facing a big challenge to rebuild the state and vie for the investors’ heart. The trust deficit, which was strongly felt during the Communist regime, is unlikely to fade away in the shorter term. Against this backdrop, the success of Bengal Global Business Summit augured well for investment in the state.
Soon the hopes belied. Kolkata turned a city of dissenters, a battlefield for protest against the Citizenship Amendment Act passed by the Modi government and now in force since January 10 of this year. With Mamata government neck-deep in the stir against CAA, the trust deficit of investors widened. Thousands of people, led by Chief Minister Mamata Banerjee, marched on the streets against CAA. The anti-CAA protests harked back to era of the Communists, an investor quipped.
The anti-CAA demonstrations and rallies, which she has led from the front, have cast a shadow on her business-friendly image, influencing the investors in the summit. Ironically enough, Mamata had slammed the culture of dharna when she first became the Chief Minister in 2011. However, times have changed and now she herself is leading massive rallies and chanting “Amra Kara? Nagarik!” (Who are we? Citizens!)at podiums, often shown live on news channels covering the demonstrations. Yet, business observers are wondering if this were a tool to dissuade the unemployed youth from the frustration of non-availability of jobs.
West Bengal has huge potential for investment in terms of its geographical location and natural resources. It has a lot of coal and is the gateway to South East Asia. It is surrounded by three nations – Nepal, Bhutan and Bangladesh. These nations provide big opportunities for India’s exports, since none of these nations has any big industry. In addition, all the three are SAFTA members, which provide duty-free market accessibility for Indian goods and vice-versa. Given the advantage of its geographical placement, which are contiguous to three nations, West Bengal pitches for a strong platform for surface transport and enhancement of trade with these countries. Road connectivity has been prioritised as part of Act East Policy to make the state a gateway to South East Asia.
West Bengal can act as the Indian Silk Road for our South Asian neighbours. Myanmar has emerged as a prospective trade destination after the return of democracy. Road connectivity provides enough potential for border trade with these countries. With cost cutting opportunity in logistics, a competitive tool for buoyancy in trade, border trade unleashes greater opportunities to augment trade with neighbouring countries.
West Bengal has unique advantage to become a strong foundation for global value chain (GVC) manufacturing operations in the eastern region. In the wake of China losing cost competitiveness, which resulted in foreign investors looking for alternatives, West Bengal can provide a propitious land for GVC manufacturing operations between India and ASEAN. West Bengal is considered to be one of the lowest in the cost competitiveness manufacturing place in India. To this end, the state can offer a unique opportunity to be the hub for exports to ASEAN and other Asian countries in the east for their entrepreneurs, who dependent on multinational GVC operations for manufacturing.
Given the present industrial structure of West Bengal, industries with low and middle level investment and which are labor intensive are appropriate for industrialization. To this end, experiences of Vietnam and Bangladesh would be pertinent for the growth of industries in West Bengal. Success stories of ‘Supporting industry” model for automobile in Vietnam and surge in garment industry in Bangladesh can provide some tips to West Bengal.
Surprisingly, Chinese keenness to invest in the state was evinced in the summit. A big Chinese business group of 30 entrepreneurs attended summit. Acknowledging the Chinese zeal, the Consulate General of China in Kolkata, Ma Zhanwu, said: “Chinese businesses attach great importance to the opportunities, presented by eastern India and West Bengal.” He upped the ante for surge in India-China relation, despite India refused to be party to Chinese Belt and Road Initiative.
With the break out of trade war between USA and China, India- China relation reached at crossroad. It has become a turning point for the two nations to reinvigorate their economic relations, burying the hatchet of political row. Chinese products are becoming costlier after the US tariff hike. Investors in China are contemplating shifting their productions bases in India and other countries.
China has already made a big investment in mobile phone manufacturing in India. China brands now account for over 51 percent of the smart phones sales in India. Several factors substantiate West Bengal’s importance as a hub for manufacturing mobile phone and electronic component. Cheap wage, low land cost and availability of highly skilled labour forces (owing to three big technical education institutes in the state) can prove propitious for these industries.
Given the various advantages of West Bengal and the US-China trade war, Mamata should bet on Chinese capital for the development in the state, instead of reverting the state back to a battleground for protests. (IPA Service)