Mumbai: one foot in the future

Under the impact of an ever-growing population, property prices are skyrocketing and it's not uncommon to see a doctor, lawyer or businesswoman returning in the evening to his or her clinker shack at the Slumdog Millionaire. While around a third of the 20 to 25 million inhabitants of Greater Bombay - estimates vary and are impossible to confirm - live in substandard housing, the city nevertheless has the highest per capita income in the country. In 2009, it reached 2,910 dollars, or 2,360 euros, almost three times the national average. "Maharashtra, India's third largest state, generates 23 % of the country's revenue and represents the highest contribution to its GDP"says Kavita Sharma.

 

Its emerging economy grew by 10.5 % in 2011, compared with 8.6 % nationally. Not to mention that Mumbai accounts for 27 % of all India's exports. The reason: increasingly specialised activities, focused on the automotive industry, biotechnologies and chemicals, agri-food, precious stones, information technology (IT), pharmaceuticals and, to a lesser extent, textiles, a historic vector of wealth.

 

As you can see, India's economic and financial capital is changing, just like the country itself, "the world's largest democracy". "The Indian economy is still young; it only opened up in 1991, and international trade only really began in the early 2000s.says Pierre Lignot, Director of Ubifrance India. But unlike China, India has primarily developed its service activities, particularly in the telephone and IT sectors".continues the director. While Bangalore remains the hub of the IT sector, Bombay also benefits from the presence of ultra-qualified engineers who speak perfect English. "If you think of China as the workshop of the world, you could say that India is the office".says Pierre Lignot.

 

In tandem with this 'technologisation' of the country, Bombay is continuing its slow process of deindustrialisation, gradually wiping out its textile mills. The Mills, the old cotton mills located in the north of the city, notably in the districts of Lower Parel and Worli, are being razed to the ground to make way for luxury shopping centres and ultra-design apartment blocks. One example is the World One, a futuristic 117-storey building designed by I. M. Pei. "The city doesn't yet have any architectural references, but it won't be long before they do, because the new groups setting up their headquarters in Bombay want an international base and the towers to be built will become their flagships".explains Matthieu Lefort, Director of the Bombay Economic Mission.

 

And yet, in the streets where slums and tower blocks stand side by side, urban planning still seems a vague notion. From the terrace bar of the Four Seasons, currently the tallest building in the city, you can watch modern towers grow, including that of the future Shangri-La hotel, between the Dobi Ghat, an open-air labyrinth of laundries, and tarpaulin-roofed shanty towns, between dilapidated colonial mansions and the Mahalaxmi racecourse with its overgrown vegetation.

 

But out of all this chaos also emerges a phenomenal energy of life. Like in Bandra Kurla Complex, the new business district in the north of the city, where one big group after another is setting up shop. "This is where JP Morgan, BNP Paribas, Citigroup and Bank of India now have their headquarters".says Matthieu Lefort. This business district has become a financial centre, but also a diplomatic one, where consulates, notably French and American, formerly located in Colaba, at the tip of the peninsula, now stand side by side with the big hotels.

A symbol of this urban renewal, the Rajiv Gandhi Sea Link, a monumental toll bridge with twice four lanes inaugurated in March 2010, now links the historic southern quarter to the rapidly expanding northern districts of the city. An achievement, to be sure, but one that barely limits the formidable traffic jams experienced by Mumbaikars, the inhabitants of Bombay. In December 2011, there were more than two million vehicles in the metropolis. As a result, the major aerial metro project, launched in 2006 and on which work began in 2008, is becoming more urgent by the day. But the project is dragging on. And the budget overruns are piling up. Nevertheless, the first phase should open with a bang, with the inauguration of 60 km of lines. Despite these delays, which are partly due to a legendary administrative sluggishness, it must nevertheless be acknowledged that Maharashtra has the most developed and modern infrastructure network of the major Indian states, with 267,000 km of roads, 3,700 km of railways and the country's first toll motorway, linking Bombay to Pune, the industrial centre and second largest city in the region. Other projects such as the Delhi-Mumbai Industrial Corridor, a 1,483 km rail freight corridor, are due to come to fruition in the next few years, while the airport, which already accounts for the highest volume of international travellers in the country with 30.7 million passengers in 2011, is set to see its capacity increased by at least 30 %.

 

Bombay has the resources to match its size. All the more so as the megalopolis, one of the most populous in the world, nonetheless captures 40 % of the country's tax revenue. Buoyed by this growing wealth, it is slowly turning its eyes towards products from elsewhere. This is certainly due to an industrial base that is not yet efficient enough to meet its enormous needs, but also to the gradual emergence of a middle class with a taste for the finer things in life. "India is the second largest developing market after China, so there's still a long way to go... Basically, it's the China of fifteen years ago".explains Matthieu Lefort.

 

Even if luxury remains a niche market, the major French brands are establishing themselves in the country. Hermès has just opened its very first boutique in Bombay, Louis Vuitton its fifth Indian branch in Chennai, while Chanel and Clarins have shop windows in all the country's shopping centres, starting with the Palladium Mall in Bombay.

 

"Adapting to local needs is essential to the development strategies of French brands".adds Pierre Lignot. For example, L'Oréal, whose national muse is none other than Bollywood queen Aishwarya Rai, is offering products in smaller sizes at affordable prices. Lacoste has created quilted kurtas, the long tunics worn all over India. In the same vein, Hermès launched a limited edition of silk saris in spring 2012. The list goes on. As is the interest of this rising middle class in new products, such as wine, which is also growing in volume. According to forecasts, the wine market is set to grow by 100 % between 2010 and 2014. This may seem like a staggering figure, but in reality it represents just ten million euros in revenue and 2 % of the country's alcohol consumption.

 

Some French companies are already banking on India's potential. "The Accor hotel group is posting growth rates of close to 20 % per year, with plans for 70 hotels in the country by 2017."says Matthieu Lefort. The key to success: patience in waiting for a return on investment. For Laura Prasad, Secretary General of the Indo-French Chamber of Commerce, Mumbai is a city with demographic, infrastructure and housing problems, but which also offers tremendous opportunities. "The Chamber is helping many SMEs to set up here, because while China is beginning to stagnate, India is showing growing potential.she explains. "Of course, the Indian market is very complex, but it is still possible to get round the difficulties, particularly by finding the right local partner".concludes the General Secretary. Especially as Bombay, as well as favouring consumer goods and finance, is clearly keen to develop the health, biotechnology, cosmetics, pharmaceutical and property sectors. Nothing concrete, of course, but in the capital of the Bollywood dream, all hopes are justified.