India’s Act East Policy: Can West Bengal Benefit?
Photo Credit: Ministry of Communications and Information of Singapore
By Tridivesh Singh Maini

India’s Act East Policy: Can West Bengal Benefit?

Feb. 02, 2018  |     |  0 comments

For a very long time, it has been argued that Eastern India, especially West Bengal, has not been sending positive signals to investors — domestic and foreign — in spite of being blessed with an abundance of natural resources.

The not-so-investor-friendly policies of the Left Government which had been in power for over 3 decades, along with the farmers’ protests which led to the Tata Nano project shifting from Singur (West Bengal) to Sanand (Gujarat), have been cited as two key reasons for the reluctance of investors to invest in the state. Interestingly, the farmers’ protests were led by the current Chief Minister and Trinamool Congress Supremo Mamata Banerjee who was at that time in the opposition.

During her tenure as Chief Minister, Banerjee has been pro-active in her outreach to both domestic and foreign investors. Banerjee has led delegations to a number of countries including the UK and Singapore. Like other states, West Bengal has also been organizing an investors’ summit, the Bengal Global Business Summit. The state recently held the fourth edition of the summit. Top Indian corporates were present at the event, including Reliance Industries Chairman, Mukesh Ambani. While praising Banerjee, Ambani acknowledged the strides made by the state, saying:

“Bengal has said goodbye to the slow growth rate of the past … Today the state is famous for ease of doing business and I must congratulate chief minister Mamata Banerjee and her colleagues for making West Bengal the number one state in terms of ease of doing business. A miracle has happened because of an industrial peace and pace in the state. Under her leadership West Bengal is becoming the Best Bengal.”

It might be mentioned that Banerjee extended an invitation to Ambani to attend the summit during a visit to Mumbai in November 2017.

West Bengal’s Strategic Location

During the course of the summit, Banerjee left no stone unturned to hard-sell the pluses of investing in her state, saying that economic engines of growth such as Maharashtra have peaked. She positioned Bengal as a hub for Eastern India, and also urged investors to invest in other parts of Eastern India: “Invest in Bengal. Bengal means business. But, also invest in the other eastern states like Bihar, Odisha and Jharkhand. They too have a lot of potential.”

Banerjee also pitched for greater investment in West Bengal, in the context of its proximity to neighboring countries like Bangladesh, Myanmar and Nepal: “Bengal has a strategic location as it is the gateway for ASEAN countries and North East India. Bangladesh, Nepal, Bhutan are our bordering countries. There are a lot of opportunities.”

In November 2017, a South Korean diplomat, Hai Kwang Lee, met with Banerjee and underscored the location of Kolkata as one of the key attractions for potential investors.

The outside world has begun to pay attention to the Eastern Indian states, including West Bengal. There were nine major countries which partnered West Bengal this year: Germany, the UK, Italy, France, Poland, South Korea, the Czech Republic, and the UAE. China has also been showing immense interest in strengthening links with West Bengal, due to a variety of reasons. The first is the ambitious Bangladesh, China, India, Myanmar (BCIM) Economic Corridor which seeks to connect Kolkata with Kunming, the capital of Yunnan Province in China. Significantly, there is already a direct flight which connects Kolkata and Kunming. During former Indian PM Dr. Manmohan Singh’s visit to China in October 2013, Kolkata and Kunming were declared sister cities.

China has also proposed a rail line linking Kunming with Kolkata. While there is no doubt that due to tensions between both countries, ambitious connectivity projects may have been stalled for the time being, there is scope for strengthening economic linkages, given the fact that West Bengal is the gateway to Eastern India, a region which is unexplored but full of potential. Invitations have been extended to Mamata Banerjee to visit China, and the Chief Minister of Chattisgarh, one of the Eastern Indian states, visited China in 2016.

Investors from other countries who are interested in investing in Kolkata are also likely to be interested in investing in West Bengal. For instance, a US delegation led by Under Secretary of Political Affairs Thomas A. Shannon had met with Banerjee in 2016 and discussed amongst other issues, West Bengal’s geo-political importance in the context of India’s Act East Policy.

In November 2017, a South Korean diplomat, Hai Kwang Lee, met with Banerjee and underscored the location of Kolkata as one of the key attractions for potential investors: “Kolkata is the third most populated city in India and provides a huge market. It is also a logistics hub with connectivity to all parts including neighbouring countries like Nepal, Bhutan as well as Myanmar and Thailand. It also has a skilled labour force. Such things should induce Korean companies to invest.”


It remains to be seen whether Banerjee will be able to repackage West Bengal successfully and attract investors — both domestic and foreign. There is also scepticism with regard to whether or not the MOUs signed during the Summit will convert into anything tangible. What is clear, however, is that regional leaders are trying to change their image, and Eastern India is beginning to show greater initiative in reaching out to investors. What is interesting to note is that how Banerjee did not only pitch for investment to West Bengal, but also to the rest of Eastern India. Such an approach needs to be welcomed.

It is also interesting to see the outside world taking note of the potential which exists in Eastern Indian states, while also being interested in benefitting from the location of Kolkata in the context of India’s Act East Policy. A number of steps will need to be taken to ensure that investors begin to pay more attention to Eastern India. The first is being more investor friendly. Eastern Indian states beginning with West Bengal also need to focus on particular countries and not spread themselves too thin. Along with the North Eastern states, West Bengal should also be treated as one of the key stakeholders in India’s Act East Policy. A turnaround for West Bengal would mean a turnaround for Eastern India, and this will definitely give a fillip to India’s growth story.

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