Bengal Global Investment Summit: Mamata Encourages Investors To Consider West Bengal – OpEd

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While the preceding three Bengal Global Business Summit failed to impress the investors, the 4th summit made a turning point in reaping the rays of hope for the investment in West Bengal. This was exemplified by the presence of top investors, like Mr Mukhesh Ambani, Chairman of Reliance Industries and Mr LN Mittal – Chairman of ArcelorMittal- known as steel king of the world.

Not only their presences, but the summit was graced by Mr Ambani’s assertiveness for a strong footprint in West Bengal when he drew a road map for his mega investment projects in West Bengal. Following suit, other major investors like Mr Kishore Byani- the leader of organized retail in India ( Big Bazar), Mr. Sajjan Jindal – one of the leading steel makers in the country, Goenka – one of the India’s major manufacturing groups and Mr. Kotak – one of the linchpin of Indian private banking unleashed their investment plan in West Bengal. Their presence and decoding their plans for investment ensured that this time they could trust Mamata’s slogan “ Bengal means Business”. This was adorned by Mr Mukhesh Ambani in foretelling that West Bengal will be “Best Bengal”.

The success of the summit should not be measured by the amount of investment, signed under MOUs. The crucial point of the summit is that whether the summit could create a new mindset of the entrepreneurs for a relook at West Bengal. Even though the MOUs signed for investment in 4th summit was lesser than MOUs signed last year, the proposals in 4th summit were more realistic. So far, most of the MOUs signed before remained on paper.

The impact of the summit will take time to be evident. Nevertheless, presence of big Indian honchos and their reiterance of Mamata’s relentless efforts to woo the investors for Bengal resurrection as investment destination, seemed to have worked well in the summit. The summit proved a further success when she could manage the presence of pro- Modi entrepreneurs in the summit, such as Mr Ambani and Mr Adani.

West Bengal profiles for two important characteristics for investment. One, it is bestowed with ample natural resources under the soil of Sonar Bangla, and second its geographical location in the east, which harbors for border trade with four nations and North East. Polarizing on these two strong parameters, which no other state can provide, West Bengal can usher a strong turf for border trade and be a pivot to India- ASEAN connectivity – the paradigm shift of Modi’s dynamism to rein in Asia under Act Asia policy.

West Bengal has a distinct advantage to become a potential trading hub for India or gateway to South East Asia, because of its geographical placement. Its proximity to Bangladesh, Nepal , Bhutan and Myanmar spur enough opportunities for trading with India. West Bengal can act as a Indian Silk Road to India’s neighbours. Myanmar has emerged a prospective trade destination after the returns of democracy. The road connectivity provides enough potential for border trade with these countries. With the cost cutting opportunity in logistic , a competitive tool for buoyancy in trade, border trade unleashes greater opportunities to augment trade with neighbouring countries.

The recent focus on India-ASEAN connectivity can develop the road for connectivity between West Bengal and its neighbouring countries. This will pave the way for the state to become export hub to the ASEAN and East Asia region.

Besides, West Bengal can act as India’s Rotterdam , by providing spaces for large warehousing facilities to export to ASEAN and East Asia region, owing to the development of road connectivity between India and ASEAN. The State government should develop infrastructures for MNCs warehousing facilities, especially to attract Japanese Sogo Sosha and Korean Chaebol , whose global marketing expertise were ramped up by strong information network and distribution channel. These warehousing facilities can provide effective distribution channel with timely supply of goods and low cost logistic support.

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 loosing cost competitiveness, which resulted 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 an 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.

GVC is an unique system to take the advantage of low cost production at multinational level. According to World Bank’s “ Global Value Chain Report”, GVC provides opportunities for developing countries to diversify their exports and intensify integrity into global economy. Given the geographical proximity, West Bengal can produce a slot under GVC , without having to produce a complete and final product. As a result, the state can export mostly manufacturing value –added products.

Against the backdrop of the present industrial structure of West Bengal, the industries with low and middle level investment and of 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

Mamata vied for BMW to set up factory in West Bengal, while she visited Munich in September 2016. The big question lies whether it is feasible to set up a giant automobile plant by a foreign investor like BMW .

Structurally, the automobile is a value-chain or component base industry. In Japanese terminology, it is known as supporting base industry. It is an inter – chain of assembly and component manufacturing units. Therefore, for setting up of a major automobile factory, development of component and parts units within the vicinity of the assembly plant is imperative. To this end, given the benefits of low cost production and the presence of three top class technical institutions, viz, IIT Karagpur, Shibpur Engineering college and Jadavpur University, which can provide skilled workers, the state has big potential for automobile industries.

Even though in the summit, no big entrepreneur proposed for an automobile plant, the days are not far when the state will be propitious for automobile industry when the industrial honchos like Mukhesh Ambani, Adani, Jindal , Goeka and Biyani pour their investment in the state.

To deduce from the above, West Bengal was seemed to have knocked the hearts of big entrepreneurs for a relook at West Bengal, overturning Mamata’s stigma for anti –industrialists.

Subrata Majumder

Subrata Majumder

Subrata Majumder is an adviser to Japan External Trade Organization (JETRO), New Delhi, and the author of “Exporting to Japan,” as well as various articles in Indian media, including Business Line, Echo of India, Indian Press Agency, and foreign media, such as Asia Times online and Eurasia Review .

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