Ratan Tata critical of India’s domestic investment policy

November 14, 2013 6:59 am

Ratan Tata critical of India’s domestic investment policy

By Victor Mallet in New Delhi

One of India’s best-known industrialists has criticised the obstacles facing investors in India in a rare public comment on the country’s policy shortcomings. Ratan Tata, chairman emeritus of the Tata Group and elder statesman of Indian business, made the televised criticism in a remark to David Cameron, UK prime minister, about the group’s substantial investments in Britain.“It [the UK] is a very open environment,” Mr Tata said when asking the final question of Mr Cameron at a conference in New Delhi. “We’ve become quite used to having multiple roadblocks in most things that we do here and it’s been a very refreshing change.”

Tata is the largest industrial employer in the UK, with interests ranging from steel and Jaguar cars to Tetley tea.

In private, Indian business leaders have long expressed frustration with bureaucracy and corruption at home, as well as with the country’s burdensome labour laws and the difficulty of acquiring land.

Many have been particularly angered by blockages to big electricity and infrastructure projects under the Congress-led coalition government.

Mr Cameron, on his third visit to India, had earlier praised Indian democracy and lauded Sachin Tendulkar, the veteran cricketer who retires after a Test match against the West Indies, which begins in Mumbai on Thursday.

Mr Cameron said India was reforming sectors such as banking and retail, but had failed to liberalise vital fields such as insurance, where foreign investors were limited to 26 per cent stakes in local companies to the dismay of British, among other, insurers.

On such sectors, Mr Cameron said, “they really have taken a very long time and have not moved very far at all”.

Lord Mandelson, a UK politician and businessman and former European trade commissioner, asked Mr Cameron what he thought about the EU-India trade negotiations launched under Mr Mandelson himself six years ago and now “stuck very badly and deeply in the weeds”.

Mr Cameron said: “There hasn’t been yet an attractive enough deal, a big enough, open enough deal to be done.”

Earlier this year, comments from Anand Sharma, India’s trade minister, indicating keenness to conclude the long-stalled deal were met with scepticism from European negotiators, who have seen talks founder on issues such as concerns from Europe’s carmakers over unequal market access.

Asked whether there was a danger that his country would become “Little England” if Scotland seceded from the UK and Britain left the EU, Mr Cameron defended the use of referendums to test the people’s will but conceded that the EU was not popular.

“I believe Britain is better off engaged in a reformed European Union, but I have to deal with the facts as they are today, and as of today consent for our membership of the EU is wafer-thin.

“There’s a lot of anger among the British public about the costs of Europe. There’s a lot of disenchantment within the business community about the costs and the bureaucracy in Europe.”