Bengal's entrepreneurial drive
Mamata Banerjee has been focused on enhancing Bengal’s potential as an investment destination, as was highlighted during the recent Global Business Summit.
After the three previous Bengal global investment summits turned dormant, the fourth summit held this month threw some rays of hope. Most of the MoUs signed in the three previous summits remained on paper. But, the latest made a seamless attempt to woo investors after Chief Minister Mamata Banerjee made a hard sell by visiting Mukesh Ambani in Mumbai and LN Mittal in London before the summit. Evidently, apart from Ambani and Mittal, the summit beamed with the presence of big Indian honchos like Sajjan Jindal, Kishore Biyani, Parmesh Adani and the nine-country representatives. Their presence suggested they trusted Mamata's slogan "Bengal means Business", with Mukesh Ambani suggesting "West Bengal will be Best Bengal."
The success of the summit should not be measured by the amount of investment proposed under the MoUs. The crucial point is whether the summit could create a new mindset for entrepreneurs to take a re-look at West Bengal. The impact of the summit will take time to emerge. The presence of big names and their acknowledgement of Mamata's relentless efforts to woo the investors for Bengal's resurrection as an investment destination seemed to have worked well. She could also manage the presence of pro-Modi entrepreneurs, such as Ambani and Adani.
West Bengal profiles for two important characteristics of investment. One, it is bestowed with ample natural resources under the soil of Sonar Bangla, and second is its geographical location in the east with its scope for border trade with four nations and the North East. Polarising on these two parameters, 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 the Act Asia policy.
West Bengal has a distinct advantage to become a potential trading hub for India or a 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 an Indian Silk Road to the country's neighbours. Myanmar has emerged as a prospective trade destination after the return of democracy. With the cost cutting opportunity in logistics, 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 connectivity between West Bengal and its neighbouring countries. This will pave the way for the state to become an 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 the East Asia region, owing to the development of road connectivity by India–ASEAN connectivity. The state government should develop the infrastructure for MNCs warehousing facilities, especially to attract Japanese Sogo Sosha and Korean Chaebol, whose global marketing expertise was ramped up by strong information network and distribution channel. The warehousing facilities can provide effective distribution channel with the timely supply of goods and low-cost logistical support.
West Bengal has a unique advantage to become a strong foundation for global value chain (GVC) manufacturing operations in the eastern region. In the wake of China losing out on cost competitiveness, which resulted in foreign investors looking for alternatives, West Bengal can provide a propitious land for GVC manufacturing operations between India and ASEAN. The state is considered to be one of the cheapest manufacturing places in India.
Mamata vied for foreign investment in the automobile sector while she visited Munich in 2016. She asked BMW to set up a factory in West Bengal taking advantage of the availability of land and access to the big markets of the neighbouring countries. Structurally, automobile is a value-chain or component-based industry. In Japanese terminology, it is known as a supporting base industry. It is a conglomeration of assembly and component manufacturing units with a lot of interdependence. Therefore, for setting up of a major automobile factory, the development of component and parts industry is imperative in the vicinity of the assembly plant. To this end, having the benefits of low-cost production and the presence of three top-class technical institutions, viz, IIT Kharagpur, Shibpur Engineering College and Jadavpur University, the state has ample opportunities to provide skilled workers, which is a major requirement for the automobile industry.
Even though no automobile plant was proposed at the summit, West Bengal seemed to have touched the hearts of entrepreneurs. IPA
(The views expressed are strictly personal)