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Economic Times
2 days ago
- Automotive
- Economic Times
There is more scope for Indian investment in the UK than the other way around: Swaminathan Aiyar
Swaminathan Aiyar, Consulting Editor, ET Now, says India stands as a prominent investor in the UK, with the Tata Group leading as the largest private sector employer. Enhanced by relaxed social security deductions for IT workers, increased Indian investment in the UK's IT sector appears promising. Opportunities also exist for Indian professionals in finance, media, and sports, potentially fostering a beneficial two-way exchange of skills and remittances. ADVERTISEMENT But the list is long when it comes to some labour intensive sectors, be it from auto ancillary to leather to processed food. Which can be the biggest beneficiary according to you? Swaminathan Aiyar: The government is anxious to emphasise that there will be job creation in artisanal, labour-intensive sectors like leather or textiles or auto ancillaries. I would just say that in the long run, we need to look away from the labour-intensive field. Our comparative advantage is in skills. We are very competitive in skills. We are not competitive on labour costs for there are a large number of issues on the labour side. It includes the very large number of holidays we have in India compared with anybody else, and relatively short hours of work. Because of all this, I do not think India has a great advantage in the labour-intensive sector which the government claims it wants to promote as our labour laws do not really promote that. So that is the real problem, our own labour laws, not the trade barriers in Europe, not the trade barriers in the UK. And we would have to do something about that. In auto ancillaries, we can certainly have a move up. The British car industry has disappeared in terms of British names, but the multinationals of the world are there, certainly the Japanese and Korean companies and we can export there and hopefully at some point of time, we will even be able to export to Jaguar which is very high-end in terms of the auto parts, but Tata owns it. We are not competitive in large cars, but we are definitely competitive in small cars. For countries in Europe, and in England, small cars are preferable, whereas in the USA, it is large cars. Small cars are preferable because of very high prices of petrol and because of a lack of parking spaces. Americans have huge parking spaces for their large cars. Britain and Europe are much more constrained by space. So, our small car exports should have a chance of rising significantly. It will also depend of course on what happens to the tariffs of various rivals. Malaysia, Thailand, China, all of these are competitors in small car areas. So, I am not sure what will happen out there, but if we have a good deal, if we have a very low tariff regime and they do not, that will clearly give us a benefit in the UK. Does the FTA lay groundwork for wider cooperation in technology, green energy, and mobility? Will it also help boost investments in a meaningful way according to you? Swaminathan Aiyar: There are a number of issues. As far as investment is concerned, will this help mutual investment? Will this help Indian investment in the UK? Will it help British investment in India? I am not sure to what extent it will boost British investment in India. The reason is that Britain hardly produces many goods anymore. It used to be a large exporter of goods, but it has substantially deindustrialised and become a services sector. So, it will want to do something more on the services sector which we should allow because we are competitive in services, we should allow them to come in. But again, if somebody comes into the services with a GCC, it will not involve very much investment. It will certainly generate revenue. It will help generate skills. It will be skilling of the Indian workforce. There will be exports involved, but do not expect very heavy investment. It does not take a lot of heavy investment to start an R&D centre into artificial intelligence. So that is the kind of thing the British may be investing in India. ADVERTISEMENT India is one of the biggest investors in the UK. The Tata Group is the largest single employer in the private sector in the entire United Kingdom. I mean, it has TCS, it has Jaguar, and it has its steel plant out there and those together are a massive amount of investment, a massive amount of jobs. Will that trend increase? Yes, it could increase. But as I said, that is now fundamentally a services economy. It is no longer a large-scale producer of merchandise. So, can Indian companies like TCS which are already well established increase their footprint? Yes, I should think so, especially now that there is this freedom in terms of social security deductions. Earlier, if an IT worker went there, a significant part of his salary was cut saying this is a social security contribution although he would never get it back as a pension in his old age. Now that that is being waived for three years, we will be able to send lots more people for up to three years and this should induce much more Indian investment in the IT sector there. I hope that happens. It looks promising. Of course, the other thing is that will there be more Indian writers for Financial Times and The Economist or more Indian footballers going into the Premier League, some of these areas and of course, there is the stock market. I mean, Britain is a highly financialised market with a huge stock market. It already has a significant number of Indian names that are already well known. I imagine that number could go up. How many of them would retain a close connection with India? I am not sure. But you could hope that a significant number of people go there and they improve their skills, send home remittances, and later on perhaps come back and open businesses here, so that is what we look forward to, something happening two-way and on this frankly I see more scope for Indian investment in the UK than the other way around. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
2 days ago
- Automotive
- Time of India
There is more scope for Indian investment in the UK than the other way around: Swaminathan Aiyar
Live Events You Might Also Like: India-UK trade deal not historic but should help Indian workers in UK: Swaminathan Aiyar You Might Also Like: Be Ready to Export: India-UK FTA is a transformational leap (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Consulting Editor, ET Now, says India stands as a prominent investor in the UK, with the Tata Group leading as the largest private sector employer. Enhanced by relaxed social security deductions for IT workers, increased Indian investment in the UK's IT sector appears promising. Opportunities also exist for Indian professionals in finance, media, and sports, potentially fostering a beneficial two-way exchange of skills and government is anxious to emphasise that there will be job creation in artisanal, labour-intensive sectors like leather or textiles or auto ancillaries. I would just say that in the long run, we need to look away from the labour-intensive field. Our comparative advantage is in skills. We are very competitive in skills. We are not competitive on labour costs for there are a large number of issues on the labour side. It includes the very large number of holidays we have in India compared with anybody else, and relatively short hours of work. Because of all this, I do not think India has a great advantage in the labour-intensive sector which the government claims it wants to promote as our labour laws do not really promote that. So that is the real problem, our own labour laws, not the trade barriers in Europe, not the trade barriers in the UK. And we would have to do something about auto ancillaries, we can certainly have a move up. The British car industry has disappeared in terms of British names, but the multinationals of the world are there, certainly the Japanese and Korean companies and we can export there and hopefully at some point of time, we will even be able to export to Jaguar which is very high-end in terms of the auto parts, but Tata owns it. We are not competitive in large cars, but we are definitely competitive in small countries in Europe, and in England, small cars are preferable, whereas in the USA, it is large cars. Small cars are preferable because of very high prices of petrol and because of a lack of parking spaces. Americans have huge parking spaces for their large cars. Britain and Europe are much more constrained by space. So, our small car exports should have a chance of rising significantly. It will also depend of course on what happens to the tariffs of various rivals. Malaysia, Thailand, China, all of these are competitors in small car areas. So, I am not sure what will happen out there, but if we have a good deal, if we have a very low tariff regime and they do not, that will clearly give us a benefit in the are a number of issues. As far as investment is concerned, will this help mutual investment? Will this help Indian investment in the UK? Will it help British investment in India? I am not sure to what extent it will boost British investment in India. The reason is that Britain hardly produces many goods anymore. It used to be a large exporter of goods, but it has substantially deindustrialised and become a services sector. So, it will want to do something more on the services sector which we should allow because we are competitive in services, we should allow them to come again, if somebody comes into the services with a GCC, it will not involve very much investment. It will certainly generate revenue. It will help generate skills. It will be skilling of the Indian workforce. There will be exports involved, but do not expect very heavy investment. It does not take a lot of heavy investment to start an R&D centre into artificial intelligence. So that is the kind of thing the British may be investing in is one of the biggest investors in the UK. The Tata Group is the largest single employer in the private sector in the entire United Kingdom. I mean, it has TCS, it has Jaguar, and it has its steel plant out there and those together are a massive amount of investment, a massive amount of jobs. Will that trend increase? Yes, it could increase. But as I said, that is now fundamentally a services economy. It is no longer a large-scale producer of can Indian companies like TCS which are already well established increase their footprint? Yes, I should think so, especially now that there is this freedom in terms of social security deductions. Earlier, if an IT worker went there, a significant part of his salary was cut saying this is a social security contribution although he would never get it back as a pension in his old age. Now that that is being waived for three years, we will be able to send lots more people for up to three years and this should induce much more Indian investment in the IT sector there.I hope that happens. It looks promising. Of course, the other thing is that will there be more Indian writers for Financial Times and The Economist or more Indian footballers going into the Premier League, some of these areas and of course, there is the stock market. I mean, Britain is a highly financialised market with a huge stock market. It already has a significant number of Indian names that are already well known. I imagine that number could go up. How many of them would retain a close connection with India? I am not sure. But you could hope that a significant number of people go there and they improve their skills, send home remittances , and later on perhaps come back and open businesses here, so that is what we look forward to, something happening two-way and on this frankly I see more scope for Indian investment in the UK than the other way around.
Time of India
2 days ago
- Business
- Time of India
India-UK trade deal not historic but should help Indian workers in UK: Swaminathan Aiyar
Swaminathan Aiyar , Consulting Editor, ET Now, suggests that while the UK trade agreement may not drastically alter the overall scenario due to existing low trade levels, any increase is beneficial. A significant achievement is the improved conditions for Indian workers in the UK, including exemptions from social security contributions and the ability to work remotely in 35 sectors, enhancing their earnings. India-UK Bilateral trade currently stands at $21 to $24 billion, with targets to hit $120 billion by 2030. Is that leap realistic? What must happen to bridge the gap there? Swaminathan Aiyar: Well, to say it is historic is a clear exaggeration. It is a useful thing. We live in a world right now where trade barriers are going up and it is happening all over the place, not just in the USA. Others in retaliation are putting theirs up. We ourselves have retaliated. On some occasions we have put ours up. So, when you get any agreement where there is a significant amount of liberalisation of trade, I would say it is welcome. 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The old colonial connection is completely severed and Britain itself has suffered a substantial amount of deindustrialisation. And if you ask what are the main exports of England's, somebody will say Premier League football or The Economist. It does export scotch whiskey of course and that is where the duty is going to come down from 150% to 75%, subsequently maybe to 40%. That still gives plenty of protection for Indian industry. For anybody who is worried, I need to emphasise that we now have two or three artisanal whiskey companies in India which in blind tasting have beaten everybody else. Now, of course, we are not mass-producing these things. Indri will have a small batch run. It is not like the continuous mass production of some famous scotch names, but we are competent and we are high class even in something like whiskey. So, I welcome the increased competition out there too. India itself will benefit significantly in various ways. My next question is which sector is poised to benefit the most after this deal? Swaminathan Aiyar: At the end of it all, this freeing of trade will change things. But if already the UK is not among your top 10 trading partners, you cannot expect this to really change the whole scenario. If already the trade is low, it means the complimentarity between the two countries is not that high. It is much higher with China and the USA and much less with the UK. So, the overall scope for trade is limited, but we are increasing it and every increase is a good thing. Live Events You Might Also Like: India-UK FTA: Scotch whisky, gin tariff cuts unlikely to impact retail prices We have often talked about improving the conditions for Indians to move to the UK for work. This used to be one of the things that was holding up an agreement. There, we have a good deal. Indians can work in 35 sectors for two years without any office and that means you can land up there and just work from your residence with zoom and you can be functioning without going through all the difficulties of setting up a formal sector and there is an exemption for social security. This is important. A significant part of your salary, anything you earn when your people go to the UK, is cut and goes towards your long-term pension. Our fellows are going there to do IT or other work for one year, for two years, for three years, so there is no point in them paying into social security when they will get nothing out of it once they retire. You have to work a very large number of years before you can get those benefits. Earlier they resisted it and said they were not going to do it. The United States still has not allowed this, but Britain has given what the United States has not given and this is very useful. I do not know the exact rates of the deduction for different categories, but 10-15% or sometimes 20% of your salaries went in these various deductions. If that gets reduced, there is that much more these Indian professionals will be able to send home. So that is a positive thing.
Economic Times
3 days ago
- Business
- Economic Times
Can India be the next China? Jim Rogers says world's fourth largest economy has the brains but...
Veteran investor Jim Rogers Jim Rogers, co-founder of the Quantum Fund and one of the most recognisable names in global investing, has said India could become "the new China or even better' if it stays on course with pro-growth economic to ET Now, Rogers pointed to India's strengths, including a large, educated population and rising market sophistication. These, he said, give the country a real chance to reclaim a strong position in the global economy. 'If Delhi has the right attitude,' he said, 'India is going to take its place again as one of the most successful countries of the world.'But the opportunity is not automatic. Rogers made it clear that the outcome depends heavily on policy direction. Without reforms that unlock productivity, improve ease of doing business and support investment, that potential could foreign institutional investors have been retreating from Indian equities in recent months, the domestic side of the market remains resilient. Retail investors and home-grown institutions have been propping up the markets, which have shown surprising buoyancy under the sees this as a positive sign but insists the momentum must be matched by action. 'It may be the new China. It may be better. Who knows?' he said, suggesting that India's rise is not just possible, but plausible — if managed correctly. For now, Rogers isn't actively invested in Indian equities. His current exposure is limited to China and Uzbekistan, two markets he considers undervalued but undergoing structural improvement.'I have not found another market that's depressed but undergoing good change,' he said. India, while not fitting that specific profile yet, is still very much on his radar.'If India goes down, I hope I'm smart enough to buy it again,' he added, hinting at a possible future entry if valuations also touched on the state of global markets, particularly the United States. He was blunt in his assessment. 'America is the largest debtor nation in history,' he said, explaining that his current holdings in US dollars stem from caution, not faith in the American economy. His view is that when fear grips global markets again, the dollar will likely surge, not due to strength, but because there's simply no better alternative.'When the dollar surges again, because people are afraid of everything else, I hope I'm smart enough to sell,' he said, even Rogers isn't sure where he'll go next. 'I don't know another currency that can compete with the dollar,' he admitted. 'If you do, send me a private email.' Rogers' remarks come at a time when India is trying to position itself as a dependable alternative to China in the global supply chain. With geopolitical tensions, rising costs in the West and a global pivot towards de-risking, India has found itself with a rare opening. The question, as Rogers put it, is whether it can rise to the occasion, not just by chance, but through sustained reform and smart governance. His message is clear: the world is watching, and the door is open. But it will not stay open forever.
Economic Times
19-07-2025
- Business
- Economic Times
Market pressure remains amid US-India trade deal uncertainty, weak Q1: Sudip Bandyopadhyay
ET Now: This week we have ended below 25,000 mark, but the concerns, the tensions, the news flow remains the same as it was there last week. I want to understand from you how do you assess the market direction now vis-à-vis the news flow still remains the same? Live Events ET Now: You mentioned about distinction about two types of news flow, one was earnings and one was, of course, the global news flow which is continuing. In terms of earnings, this weekend and today actually is very-very important because Reliance is coming, you will have ICICI, HDFC Bank all the heavy weights especially for Nifty, the earnings are due this weekend. Do you think there could be a different direction when we meet on Monday? ET Now: What is going to be your view, especially on tier II, talking about the midcap IT space, do you think that is going to be exciting and someone who really wants to stay put in this particular sector should be looking on the tier II counters or maybe initiating something, so they have a better projection? ET Now: You did mention about your pick in the IT sector, but I want to ask about defence sector as well. How do you see this sector performing particularly on Friday, it was a kind of a dragger? ET Now: How do you look at metals because that is always a new specific sector? I want to understand from you because there has been lot of news flow recently and metal has been…, if you see past one week, it has gained momentum of around 1%, but again it is much dependent on the global news flow. (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Sudip Bandyopadhyay, Group Chairman, Inditrade Capital, says considering the valuation at which most of the stocks were trading and considering the uncertainty and subdued Q1 results, the market is drifting downwards, that is our view. Till the time there is a concrete positive news flow around the trade deal or good corporate results come out, we will continue to hover around this with a negative distinct streams of info and news flow we need to keep our eyes on. One is what is happening in the global front and predominantly that is dominated by the trade deal which India and US are expected to sign; now that has been since the 9th of July and we are still waiting. There are multiple news coming but till the time the deal is in front of us, we do not know exactly what it is, so it is kind of a lot of companies, lot of businesses, and the market is on tenterhooks. So that is one part of the uncertainty which is plaguing the second part is, of course, corporate results. It is nothing great which is coming out. By and large it is around expectations. Leave aside JSW Steel which has beaten the expectations or Wipro who has given a very good forecast about their next H2 as well as Q2 but by and large the results have been considering the valuation at which most of the stocks were trading and considering the uncertainty and subdued Q1 results, the market is drifting downwards, that is our view. Till the time there is a concrete positive news flow around the trade deal or good corporate results come out, we will continue to hover around this with a negative yes. these three stocks together is about 30% of Nifty weightage, so definitely if they come up with results which gives a direction one way or the other, market will far as both the banks are concerned, expectations are mixed. After the Axis results came out, there are a lot of concerns as well, particularly on the growth side. Let us wait and watch what happens. But yes, you are absolutely right if they give some results which is indicating a direction, market will take the cue and two things. One is tier II, I will definitely look forward to Coforge numbers. This is one company which has been beating expectations and performing exceedingly well. So, I would definitely watch for their if I have to pick something from the entire universe, probably I will look at the largecap once only and Wipro definitely deserves a look considering the confidence with which management is reiterating that their Q2 numbers as well as H2 numbers will be much yes, Wipro is talking about coming back to growth and valuation-wise also it is attractive, so, one can look at that. As far as the other midcap IT companies are concerned, one has to be extremely careful about the valuation. Look at LTIMindtree. The numbers were pretty good. Management commentary was good, but the stock is still correcting because the valuation was and still is a bit I do like defence and it is a long-term bet. And one has to remember that the valuations are not cheap. So, if you are looking at a long-term investment, long-term view, some of the defence stocks even at current valuation definitely good because they have a strong order book, they will continue getting better and more and more orders. The execution will be phased over a period of time and over a period of time valuation will catch up and move ahead of the current fundamentals. But as things stand today, the valuation is far ahead of the fundamentals, and to expect a short, medium-term significant upside, it is bit unrealistic considering where these companies are right. Metal is always a sector which has lot of global inputs and at this stage if I look at a medium to long-term trend, the trend is positive undoubtedly and metals over a period of time will do well. Short-term fluctuations, short-term price movements will be there and there will be volatility because inherently with global news flows and global demand-supply prices of metals move and hence the stocks also move, but from a long-term point of view these are positive, particularly on domestic scenario I do like Vedanta quite a bit and this is in spite of all the reports and other things which are coming the company is in strong businesses and there is a significant value unlocking happening and it is not a matter of speculation, it is happening, it has already happened, the execution is getting done. So, it is a matter of time before the benefit of value unlocking accrues to the Vedanta shareholders as well. So, yes, if somebody has to look at metals, Vedanta definitely would. Apart from Vedanta, we do like Hindustan Zinc also. Zinc, of course, they are the leaders and all that. Along with that, silver and both these two metals are gaining momentum significantly. The company is doing exceedingly well and one can look at Hindustan Zinc as well.
