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Business Commentary/Dilip Thakore

Indian entrepreneurs hit big time in Britain

Around this time every year, the London-based weekend newspaper the Sunday Times publishes its estimates of the richest people in Britain. For reasons best known to itself, the newspaper also publishes a list of the richest Indians in Britain and this latter list is big news in India.

For several years, steel tycoon Lakshmi Niwas Mittal who has rapidly acquired steel mills around the world, has been topping this list. This year round, with steel prices all over the world taking a beating, the market value of Mittal's shares in his companies has declined and according to the Sunday Times, the richest Indians in Britain are the brothers Hinduja whose net worth is estimated at over five billion pounds sterling or Rs 350 billion.

Yet, the significance of this list for Indians back home here in India is not the ranking of the big five. (The big five have scant respect for the Sunday Times methodology of wealth assessment). The point of interest is the newspaper's report that billionaires aside, a large number of millionaires of Indian origin are making their presence felt in Blighty.

This latter bit of news is causing a great deal of heart-burn -- and not only among the captains of industry.

In particular, one name which has made its entry into the millionaires' list, Nomita Panjabi, has evoked considerable surprise, astonishment and wonder. Less than ten years ago, Panjabi quit her job in Grindlays Bank's merchant banking division and headed for a holiday. Over there she chanced upon a business opportunity and somewhat hesitantly promoted an Anglo-Indian cuisine restaurant under the name and style of Chutney Mary, a venture which at the time evoked considerable mirth and drew snide comments within Bombay's cocktail circuit.

But nobody's laughing anymore because Panjabi, a woman of no particular brilliance, has set up a high-class business heavily patronised by London's smart set, and has become a hard currency millionairess in the bargain.

Some heart-burn about the success of Indians of no special ability -- people just like us -- in foreign countries and in Britain and the US in particular is unavoidable. However, a more constructive response would be to attempt to analyse the reasons why people of Indian origin who share the business culture and attitudes of businessmen in India, have succeeded in acquiring fame and fortune so quickly in Britain and the US after failing in their native land.

For a start, it needs to be understood that the popular notion that people of Indian origin are on easy street the minute they land on foreign soil is another foolish Bollywood belief. Foreigners don't have any special love for Indians. Indeed many cultural traits, attitudes and the manners of people of Indian origin are deeply resented by the native people of the countries to which they emigrate.

In Britain, for example, people of Indian origin continue to suffer racial and social discrimination.

But a facilitative and enabling characteristic of Britain is that the nation is strictly governed by the rule of law. If government servants discriminate against the minorities, they are very likely to be punished by the courts or administrative tribunals. Likewise, because of the fear of the law, petty government officials and inspectors do not prey on start-up businessmen as they do here in India.

The protection of the law provides a great psychological boost to people of Indian origin -- especially to educated professionals like Panjabi -- and prompts them to promote small-scale start-up enterprises which usually do well because of the cultural propensity of Indians to work long hours and to save and invest.

On the other hand, the fear of predators and 'inspector raj', and an dysfunctional judicial system, dissuades millions of natural entrepreneurs, especially professionals with business management experience, from striking out on their own and setting up businesses. Hence the national desperation for salaried -- especially government -- jobs.

Economic pundits and monitors of the economic scene in this country tend to downplay the socio-economic consequences of a malfunctional judicial system characterised by interminable delays and high costs. They seem to derive considerable comfort from the independence of the higher judiciary which admittedly metes out a measure of justice to the population.

There is little fear of the law within the Indian society, the bureaucracy and the police. This fearlessness of the law has imposed a heavy opportunity cost upon the Indian economy.

A second reason why a large number of Indian entrepreneurs make good in Britain is that nation's enabling banking system. If you have a good business idea, you are sure to find a sympathetic bank manager in your neighbourhood ready to help and advise you. That's because high street bank managers in Britain are always looking for business development opportunities as they are expected to show a profit at the end of the year. Moreover, they tend to be more business literate, and have well-developed credit assessment skills.

Unfortunately, branch managers of the nationalised banks, which disburse over 90 per cent of the bank credit advanced in this country, tend to be risk-averse bureaucrats rather than bankers and usually have little business sense.

They are generally unsympathetic to start-up ventures and new enterprises and tend to over-collateralise small loans. Not obliged to show a profit as much as to observe the myriad rules and decrees from the higher-ups, collectively they have a poor reputation for honesty or sympathy for small-time entrepreneurs. And foreign banks licensed to operate in this country are only interested in large, blue-chip accounts or foreign trade related businesses.

A third factor behind the rapidly multiplying successful Indian business entrepreneurs in Britain is the far superior business infrastructure that country offers. A new telephone is installed within 24 hours; the electricity, transport and water supply systems as well as postal services are efficient. An efficient supportive infrastructure enables a business to get off to a flying start and reduces its gestation period. With all these basic foundational facilities available, it is hardly surprising that the list of Indian millionaires in Britain is getting longer each year.

The moral of the success story of Indians in Britain is that back home in India, the government needs to redefine its role and concentrate upon providing basic services and facilities. The rest can be left to the nation's businessmen who quite obviously have what it takes to vault the economy into double digit annual rates of economic growth.

Dilip Thakore

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