What India does for Britain

Was it the sumptuous leather armchairs? Or the perfect teacups? Or the toothsome selection of custard creams and ginger nuts? I have never sat in a more quintessentially English workplace than the London office of Tata, India’s largest conglomerate.

Travellers to India often remark that many Indians love British culture more than Brits do. Where else do airport bookshops offer tottering towers of P.G. Wodehouse novels? Where else is cricket a multi-billion-pound industry? What few people realise is that cultural bonds have economic consequences. Tata not only has executives who sip tea like English gentlemen. It also owns Tetley tea. Indeed, it is Britain’s largest industrial employer, having also bought — and revived — Jaguar, Land Rover and Corus (the firm that used to be British Steel).

This is good for India. Tata has acquired valuable brands (who outside India drinks Tata tea?) and valuable technology (Land Rovers can cope with awful roads, which is handy in Mumbai). It is good for Britain, too. Tata is investing in steel plants in Yorkshire, car plants in Merseyside and information-technology jobs in Peterborough. It links Britain to one of the world’s fastest-growing economies. And it is one of many: Indian firms invest far more in Britain, relative to the size of its economy, than they do in America.

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This is not just because Britain treats foreign investors hospitably. It is also because many Indians have lived in Britain, and feel a personal connection. The new boss of Tata, for example, studied at Imperial College London. Such ties matter. Doing business in a foreign country is much easier if you speak the language, are familiar with the culture and have contacts. This is why, according to Pankaj Ghemawat of the IESE business school, ex-colonies trade 188 per cent more with the countries that colonised them than with other countries.