Unfortunately, till now, not a single big investment proposal has materialised. As if, the Singur hangover is still looming large and labour unrest haunting investors. But in contrast, foreign investors have not felt deterred by Mamata’s unfriendly stand against Tata’s Nano project or the labour unrest which made most of the investors run away from West Bengal. During the six year period of Mamata's rule, more FDI flowed in compared to the 34 years of Communist regime. During 2013-2018 (up to June) the FDI in West Bengal was worth $ 2.6 billion, against $ 2.2 billion during 2002 to 2013.

Why were domestic investors sulking while their foreign counterparts were upbeat on investing in West Bengal during Mamata regime? It seems that trust deficit and lack of a pragmatic policy approach by the state government were the reasons. Unlike 'Vibrant Gujarat', the state lacked the policy to create an investment-friendly image through near term and long term visions to boost industry.

The state is yet to announce any comprehensive industrial policy. There is no industrial map, which is important for setting up manufacturing plants in respect of geo-political advantages and infrastructure facilities required for a competitive investment planning. Nor was any fiscal incentive announced to reinvigorate the state, which was once an engineering hub before the communist regime took over.

Nevertheless, the state has several advantages, the biggest being geographical. Located in the east, it is ideal for border trade with four nations and North East by way of road connectivity. Sonar Bangla has abundant natural resources under the soil, consisting of large deposits of coal. It is reckoned as the gateway to east and paves the way for Act East policy.

Chief Minister Mamata Banerjee reiterated that the state has a big land bank. But, the big investors are skeptical over the potential benefit of the land bank. According to state government data, there is one lakh acres of land in the land bank. But, it is difficult to find big areas of contiguous nature, which is required for setting up large factories.

West Bengal has distinct advantages to become a potential trading hub for India and gateway to South East Asia, thanks to its proximity to Bangladesh, Nepal, Bhutan and Myanmar. West Bengal can act as an Indian Silk Road to neighbouring countries. Myanmar has emerged as a prospective trade destination after the return of democracy. The road connectivity provides enough potential for border trade with these countries. 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.

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 loosing cost competitiveness, which resulted foreign investors looking for alternatives, West Bengal can provide base for GVC manufacturing operations between India and ASEAN. The state is considered to have one of the lowest costs in manufacturing. To this end, it can offer a unique opportunity as the hub for exports to assemblers in ASEAN and other Asian countries.

Given the present structure of industry in West Bengal, which hinges on labour intensive products with low and middle level investment, lessons from Vietnam and Bangladesh would be pertinent. Success stories of ‘supporting industry” model in Vietnam and uptick in garment industry in Bangladesh can be important lessons for industrialization in West Bengal.

Supporting industry, or component base industry, was the trigger for growth of automobile industry in Vietnam, which is the second biggest manufacturer of motorbikes in ASEAN. Foreign investors played an important role in the development of supporting industry. West Bengal can also be an important destination for electronic industry. Manufacturing of mobile phones and electronic components are low capital and high labor intensive industries. There are several factors which favour West Bengal as a better destination for mobile phone and electronic component manufacturing. Cheap wage, low land cost, surplus electricity and availability of highly skilled labour forces (owing to three big technical education institutes) can prove propitious for the development of mobile and electronic component manufacturing in West Bengal

Mamata should focus on Chinese investment in West Bengal. Ever since the trade war broke out and USA hurting Chinese export by punitive tariffs, China has vowed to engage India as an important trade and investment partner. Burying the hatchet of political row, India too is eager for Chinese investment and expansion of trade relation by exporting agriculture products.

This was exemplified by the Chinese participation in the last Bengal Business Summit. Over 30 Chinese companies attended the summit. Of these 10 attended for the first time. Given the historical linkage and a large number of Chinese domiciled in Kolkata, Chinese investment can help boost the state's investment potential. (IPA Service)