Royal Mint to restart production in India

Britain’s Royal Mint plans to manufacture gold coins in India to tap into the world’s largest gold market, and provide welcome news of UK investment to coincide with the start of Prime Minister David Cameron’s three-day visit to the country.

The state-owned Royal Mint, which is Britain’s oldest manufacturer, said it would begin making its gold “sovereign” commemorative coins in India for the first time since 1918. It estimated the move could earn $125m a year by 2016.

The news that a widely recognised British brand plans to invest in India came as Mr Cameron arrived in Mumbai on Monday to promote improved business links, alongside a delegation of more than 100 representatives from business, higher education and the creative industries.

“It is great to see gold sovereign coins being introduced back into India for the first time in almost 100 years,” Mr Cameron said in a statement.

The Royal Mint hopes its coins, which will be made under licence by MMTC-PAMP, an Indian gold producer and trader, will prove popular at the nation’s lavish weddings and innumerable religious festivals, where gold is an auspicious gift.

The timing of the investment move was less auspicious, however, with Indian gold prices falling to their lowest level in about six months over the weekend, while previously buoyant gold demand in Asia’s third-largest economy dipped 12 per cent last year, according to the World Gold Council.

The Mint’s move also comes at a time in which other widely recognised British brands have struggled to break into the top tier of India’s fiercely competitive market, according to research to be published later this week.

The study reveals that only one British business ranks in the top 20 most admired companies in India, with telecoms group Vodafone ranking 19th on the index published by TLG, a British consultancy.

India’s Tata conglomerate is the nation’s most admired business, the research suggests, but major UK investors including oil group BP and banks such as Barclays and HSBC failed to appear on the list.

Larger British businesses have suffered a number of setbacks in India in recent years, including Vodafone’s long-running $2.5bn tax dispute, and bureaucratic delays hitting BP’s oil and gas exploration efforts, in which it invested $7.2bn in 2011.

British banks have also endured a torrid period, with Barclays selling its retail operations after a period of unsuccessful expansion, while Royal Bank of Scotland has failed to find a buyer for its retail and commercial operations as it also tries to shrink its presence in the country.

The Index of India’s Thought Leaders study, which is based on interviews by research group Nielsen with more than 100 business and political leaders, also suggests Mr Cameron’s delegation may find India tougher to crack than other large Brics markets.

It suggests more than two-thirds of India’s 20 most admired companies are local rather than international businesses, including IT outsourcer Infosys and State Bank of India, compared with one-third in an equivalent previous study of the most admired companies in Brazil.