ftei'ileal a" ' " ' . III City and
Cats Bombay ick Whittington's cat,' observes Mr Sitaram of Grindlays, 'was a visible export. But its methods of pest control — those were an invisible export and a transfer of technology.' India is now self- sufficient in cats, and Whittington's succes- sors would be lucky to get an import quota. Instead they would seek to classify their cat as a foreign direct investment, admissible for its new technological content. Without that, it would need to be a collaborative cat, 60 per cent Indian, if accepted as appropriate to the current five-year plan. A. partner would have to be found: per- mits, licences. . . . `To the outsider,' says a visiting banker, 'the Indian business en- vironment is a dense jungle.' There is still some truth in the outsider's view of India as the last economic legacy of Stafford Cripps a planned economy refined over 37 years by the local genius for bureau- cracy and sophistry. The banker sees furth- er. To him, to his competitors, to his clients, India is a phenomenon on the grand scale: a developing country without a debt crisis. That is more than can be said, at the moment, for something like 30 sovereign states. It is a comment in itself on those countries' arguments that they had no choice but to contract debts which tile), now find impossibly onerous either to service or to repay. If India had the choice, what excuse is there for Argentina, self- sufficient in fuel and food? For Nigeria, beneficiary of the oil shocks which drove so Many others into the arms of the commer- cial banks? India's government has left those banks until last. It is a major custom- ei the World Bank and takes care to has that friendship in constant repair. It nas drawn on the International Monetary F und, on terms which annoyed the Amer- icans — and has waved away the IMF's last one billion dollar credit, in a showy gesture of strength in front of the elections, due at the year end. That gesture was easier now that India can tap the Asian Development Bank. Then there are 'soft' loans from the International Development Agency, and aid from many sources, with Britain in the lead. But aid and soft loans grow on fewer trees nowadays, especially since the wily Chinese have joined IDA to claim their fair share of what is going. India has provided some investment, too — new steel works have understandably gone out of fashion. The big spending is now on oil and gas development. India, which ten years ago imported more than two-thirds of its oil, now imports less than one-third, and in ten years' time will be self-sufficient. But that kind of development is back- breakingly expensive before it pays off, as we learnt with the North Sea. So enter the banks, eager to open a new ledger for a country rated in the top third of Euro- money's world league table of credit risks; ready to lend long — one free lesson India has learned is not to bunch its repayment dates, as Mexico did — and content to lend, not to the national government, but to this or that state board. Just so, in the sticky Seventies, did we send out the poor old Post Office to borrow as the Treasury's front man. This time, it is said, the Delhi civil servants fear that teaching govern- ments how to borrow is like teaching cats the way to the dairy. Even so, the front list of banks expects to be paid, in hard currency. Where is India to get the new foreign exchange? Exports would be the textbook answer, and are now backed by new agencies and tax concessions, but it does not help when the world's largest tea producer suddenly slams the door on the export of tea. The rising price, which would have done so much for foreign earnings, was causing too much trouble at home. A quicker answer is to loosen the rules on foreign investment — which, unlike bank borrowing, will not cost a rupee to service until the venture is earning its keep — for India, that is, as well as for its owner. Those rules have been quietly easing, case by case, especially when the case is well-labelled. For mousing, read: high value added technologically advanced support services for agribusiness. These are the changes and opportunities which have drawn a City of London team here, assembled by the British Invisible Exports Council, with sponsorship from the British Overseas Trade Board. The High Commis- sioner finds them the phrase to open doors: they are, he says, engaged in the transfer of financial technology. There is scope, in a market where two British banks, Grindlays and Standard Chartered, are already the biggest in the private sector, and where Britain remains the biggest overseas inves- tor, even though that share is falling. Doing business in India will never be effortlessly easy, but it is less regulated than it was, and less than it looks — the 'parallel' economy, unofficial, unreported, untaxed, is now reckoned to be two-thirds as large as the official economy. Anyone unhappy with India can always pack his briefcase and try his luck in Lagos.
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