FOR those of you who have not heard of Mian Mohammad Mansha, he is the legendary Chairman of the Nishat Group of Pakistan—perhaps the largest and most diversified business group that has interests across textiles, banking and manufacturing.
Like all industrialist businessmen, Mian Mansha is a down-to-earth realist. What he said the other day in an interview with Pakistan’s Dawn newspaper post the presentation of that country’s Budget is not something new. He has been saying it ad nauseum for the past many years Here is what he told the Dawn: “No country can build reserves by selling towels. If you want to strengthen your external sector and build currency reserves, you got to do this by attracting local and foreign private investment.
India has done it that way. (Unlike Pakistan) they have been in just one International Monetary Fund programme since 1991 and never looked back.
Foreign companies are flocking to that country. This is because Indians have implemented tough reforms to facilitate investors and investment.’’
Chinese example
He goes in to quote the Chinese example of growing business with India despite deep differences over their borders and urges his own government to follow that path: “Likewise, the (resumption of) trade with India will open up many business opportunities. If China can have vibrant trade and business ties with India despite its territorial disputes, why can’t we? I think there’s nothing better than having good relations with your neighbours.
And you can’t change neighbours. We need to get our things sorted out with our neighbours. Now whatever the issues that are impeding, let them be there.
But once people come to one another’s country through trade and tourism, I think the doors will start opening” Mian Mansha is not alone. Infact, the entire trade and industry establishment in that country want to do business with India. They believe just opening the doors to business across the Wagah could well be the trigger to get them out of the economic quagmire they have gotten into.
India-Gulf trade
Well, if the Pakistani establishment doesn’t hear Mian Mansha, what they can do is look at the Gulf one of the critical regions for the Pakistanis – often described euphemistically in that country as `Muslim biradar` Just last Monday(June 12), Commerce and Industry Minister Piyush Goyal told the media that India and the UAE set a target to increase the nonoil trade from $48 billion to $100 billion by 2030. And just a year after India signed a major free trade deal with the UAE, the latest figures indicate that the Emirates has emerged as India’s fourthlargest investor.
The $100 billion marker was underlined at the first meeting of the Joint Committee of India-UAE Comprehensive Economic Partnership Agreement (CEPA). Not just that, in 2022-23, foreign direct investment (FDI) from the UAE to India stood at $3.35 billion. This was a three-fold increase from $1.03 billion in 2021-22. What it meant was that UAE has moved from the seventh to fourth position in terms of investments in India.
More examples
What the UAE is doing is no surprise. After all who wouldn’t want the maximum bang for their buck? And if that example is not good enough here are a few more:
Automobile giant Mercedes Benz India has ramped up production in its India factory. The Economic Times quoted Mercedes Benz India Chief Executive Officer Santosh Iyer: “We started a second shift at our plant to reduce waiting period on our vehicles. Volume models like the Mercedes Benz C-Class and E-Class are now available as per customer demand.”
MG Motors is constructing a second factory at a cost of over $600 million that would ramp up its India production to over three lakh units. It is also in the process of putting up a brand-new battery plant in Gujarat.
Last month Hyundai announced that it will invest close to Rs 3000 crore into an electric vehicle ecosystem in Tamil including a battery pack assembly with an annual capacity of 178,000 units
Tesla is looking at sourcing components from India.
And it is not just limited to one sector. The investments are across the board and diverse although to be fair the Southern and Western states run away with most of the FDI inflows. From automobiles to luxury brands to pharma, the FDI is flowing in. Of course, there are issues when compared with other countries like Brazil and Mexico that receive an even greater inflow, but that’s a different story.
For the moment, it will be good to remember what Mian Mansha said. You can’t be a world-beater by just exporting towels!
