The new terminal at Kolkata Airport is a striking building. Wide, gently curving glass walls sit beneath the overhang of an immense, angled roof. Inside, light pours down from long skylights to the open space below.
The state-of-the-art terminal, officially opened on January 20 this year, cost Rs 23,250 million (US$434 million) and will increase the airport’s annual handling capacity significantly, from 4.8 to 25 million passengers. This is one of many infrastructure projects currently under way in Kolkata. The northeast Indian city, and the West Bengal region of which it is the capital, are undertaking a wide range of initiatives with the aim of encouraging business. Kolkata is developing fast.
This wasn’t always the case. Kolkata has always had potential to become an important business centre, boasting a strategic location and a large, highly educated workforce. But for years, the city’s economic development was held back by the region’s politics and poverty.
The stumbling block
In 1977, the (Marxist) Communist Party of India came to power in West Bengal. Their lack of support for corporations and limited investment in infrastructure, together with an unwillingness to stop frequent industrial action, did little to draw business to the region. This meant that West Bengal wasn’t able to capitalise on the country’s economic liberalisation in the 1990s, or the booming demand for IT services, in the way other Indian regions did..
“Things went very slowly because of the kind of communism which has led Kolkata for so many years," explains Rakesh Raicar, Cathay Pacific’s regional sales and marketing manager in South Asia. “So it hasn’t progressed as much as the other cities, although it had the potential.”
Suparno Moitra, head of the Kolkata office for the IT trade organisation NASSCOM, said Kolkata’s IT industry was neglected and so its growth during the 90s was “abysmally slow”, with only 30 companies operating. HSBC Global Resourcing, which chose to locate in Kolkata in 2005 because of the educated workforce, said that in the past the city’s poor infrastructure had been an issue.
A new vision
Recently, however, things have shown signs of changing. The government is increasingly recognising the need to invest in infrastructure and stimulate business. In 2011, the communist government was replaced by a coalition of the All India Trinamool Congress and Indian National Congress. While far from completely pro-business, this new government has helped add momentum to the push for development.
“There has been a change of government,” says Raicar. “The chief minister and the government in the region are investing in and focusing on infrastructure. They want the region to grow. So you’ll see a lot of things happening: the IT sector, the Metro, and a lot of flyovers coming up. These are all going to attract investment.”
Driving into Kolkata from the airport, you certainly see signs of a city on the rise. The road passes concrete pillars supporting an overhead railway, part of the government-funded east-west extension to the Kolkata Metro. This is one of four metro extension projects under way which, together with the construction of expressways, aim to link up the city’s new areas and relieve its currently traffic-clogged roads. “A huge infrastructural transformation is taking place in Kolkata with the support of the government of West Bengal,” agrees Moitra.
The road south from the airport passes by new industrial buildings, part of Salt Lake City, an area of former salt flats that has been converted into a satellite town with upscale residences and numerous tech parks housing most of Kolkata’s IT companies. The Kolkata Metropolitan Development Authority is building several similar satellite towns around the city: Kolkata West International City, a collaboration with Indonesian investors, will have residences for 30,000 people along with three technology parks; Calcutta Riverside will have a 10-hectare IT park and residences.
Last year, the state government launched an ambitious initiative to develop a new IT and Finance hub in Rajarhat New Town to the south of the city. The State Bank of India, UCO Bank, United Bank, UTI Mutual Fund and Industrial Financial Corporation of India (IFCI) have all reportedly expressed interest in investing, and the project is forecast to attract Rs 16 billion (US$292 million).
Attracting new business
The signs of an improving business climate and infrastructure are drawing businesses to Kolkata. The city has recently gained the offices of companies involved in steel, heavy engineering, electrical engineering and mining industries. Following the change of government in 2011, it saw a surge in investment proposals.
The city’s fastest developing sectors are IT and Business Process Outsourcing (BPO). In 2010, the professional services firm PricewaterhouseCoopers announced plans to establish a 2,000-employee Service Delivery Centre to provide back-office services. Meanwhile, Indian IT companies Wipro and Cognizant have both unveiled plans to expand their operations in the city.
“Kolkata has been growing as a centre for IT and BPO,” says Moitra. He explains that the city is attractive to IT companies because it offers a highly educated workforce and lower labour costs. He says Indian IT companies are facing growing pressure because of labour costs, leading them increasingly to consider the country’s second- and third-tier cities.
The booming business activity in Kolkata is leading airlines to add flight connections. In November last year, Dragonair began four-times-weekly flights between Kolkata and Hong Kong to cater to a growing demand for business travel. Raicar says the flight was planned to serve those working in IT, with flights scheduled over weekends when they prefer to travel. He expects demand for the service to be healthy enough for it to increase to daily this year. “There is a clear indication of a need,” he says.
Other airlines have also been increasing frequencies into the city. From August 2011, SilkAir began offering four-times-weekly flights to Kolkata, meaning that with partner Singapore Airlines it serves the Kolkata daily from Singapore. In November last year, China Eastern added a Boeing 737 afternoon flight to serve Kolkata twice daily from Kunming.
Accommodation explosion
In tandem with the expanded flight network, Kolkata is also gaining international hotels catering to its growing number of business travellers. In 2010, Swissotel opened its first property in India, located in Salt Lake City. General manager Marco Saxer says 95 per cent of its guests are corporate travellers, mostly from the IT and mining sectors. On January 22 this year, Carlson Rezidor opened a 92-room Park Plaza hotel in the south of the city, and it plans to open a second property in the city centre by the end of the year. Starwood is also planning to open a Westin hotel in the city this year.
In 2014, Marriott plans to open its first hotel in Kolkata, a 300-room JW Marriott property located close to the emerging Rajarhat and Salt Lake areas. A spokesperson said they recognised an insufficient supply of accommodation in Kolkata to meet fast-growing demand. They also expect the government’s attempts to stimulate development to lead to more business travel to the city.
“The government is certainly working to attract companies to the city,” the spokesperson said. “If this process continues, then Kolkata could emerge as a key powerhouse for India in the east and a gateway to countries in the Far East. We are seeing a high proportion of visitors associated with industries such as oil and gas, electronics, steel, leather, textiles, jewellery, shipping and automobiles coming to the city. IT/BPO is also an emerging sector.”
Whether the new government continues to encourage business, and its aspirations for growth succeed, remains to be seen. But currently all signs suggest Kolkata is on the up.
A Day in Kolkata
Take a morning stroll on the Maidan
This huge area of open grassland in the middle of Kolkata was formed in 1773 when the East India Company cleared the jungle to allow them to see attackers approaching the newly built Fort William. The paths through the fields are peaceful to walk on a sunny morning and you’ll come across men watching over herds of goats, horses grazing, young couples having romantic picnics, and boys playing lively games of cricket.
Marvel at the Marble Palace
Kolkata abounds in grand old mansions, relics of a time when it was home to the British Empire’s richest merchants. Of these, the Marble Palace is one of the most opulent examples. Built in 1835 by the merchant Raja Rajendranath Mullick, it has an extravagant neoclassical style with a façade dominated by six huge Corinthian columns. Large rooms inside are crammed full of objects Mullick collected, including hundreds of vases, antique clocks, ornate mirrors and a statue of Queen Victoria carved from a single tree stump.
46 Muktaram Babu Street, open 10am-4pm (closed Mondays and Thursdays). Free, but a permit is required from the West Bengal Tourism Information Bureau located at 2 BBD Bag.
Have a local lunch at Kewpies
This cosy restaurant on a back street was set up by a famous Kolkata food writer and is now run by her daughter. It specialises in local dishes and offers the perfect place to sample Bengali cuisine, known for its use of fish and mustard paste. Kewpies has meat and non-meat thalis (a multi-dish meal) which feature delightful dishes like Doi Illish, white fish covered in mustard paste and cooked in a leaf, and huge prawns in a malai curry sauce.
2 Elgin Lane (behind Netaji Bhawan), open for lunch 2.30-3pm and dinner 7.30-11pm, tel +91(0) 33 2486 9929. Advance booking recommended.
See interesting Indian art
The Ahuja Museum for Arts is a small gallery space showing the private art collection of SD Ahuja, who has over 3,000 artworks shown on a rotating basis in the gallery. With an emphasis on contemporary Indian art, there is a variety of works on display, from surrealist screen prints by Abhijit Paul showing the glitz of modern Mumbai, to big sombre faces in broad brushstrokes by Eleena Barik. It’s a great way to take the pulse of current Indian art.
26 Lee Road, Ground Floor (at the intersection of Elgin Road and Lee Road), open 10.30am-7.30pm daily, tel +91 (0) 33 2289 4745, www.ahujaptm.com
Shop at New Market
Despite its name, the New Market isn’t that new. The elegant deep-red Victorian covered market building was opened as the Sir Stuart Hogg Market in 1874 to provide Kolkata’s British residents with an exclusive place to shop. Now the market’s arcades have small stores selling finely embroidered silks in brilliant colours, shawls, saris, beautiful handmade jewellery, antiques and wood carvings, and even metal statues of Hindu gods. Bargain hard before you buy! The surrounding area is also a bustling shopping district, with a vegetable market and small tea stalls, worth wandering around to soak up the atmosphere.
Bertram Street or Lindsay Street (Near the Oberoi Grand Hotel), open 10am-8pm Monday to Friday, until 2.30pm on Saturday, closed on Sunday.
Core Strengths around the country
Chennai – “India’s Detroit”
Located halfway up India’s east coast, Chennai (Madras) has been a centre for manufacturing automobile components since the 1950s when Indian Ashok Leyland set up there. This strong engineering base, government support for investment in manufacturing, and proximity to a large port in Chennai, have all helped draw carmakers to the state of Tamil Nadu. Ford established a plant here in 1995, Hyundai a year later in 1996, Mitsubishi in 1998, and more recently BMW and Nissan in 2005. “The Indian automobile industry is getting stronger and stronger,” says Tom Wright, India country manager for Cathay Pacific. “The Japanese and the Koreans are establishing major plants in parts of India. If you go down to Chennai there’s quite big Japanese and Korean communities there now.”
Bangalore – “India’s Silicon Valley”
Bangalore boasts a large number of engineering colleges, which gives it a sizeable and well-educated local workforce. Since the early 1990s, the Karnataka state government has invested heavily in developing the required infrastructure and offering a range of investment incentives to IT companies. All this has helped draw large numbers of tech companies to the state and allowed Bangalore to emerge as India’s foremost IT industry hub. India’s second largest IT company Infosys is headquartered here, as is its fourth largest tech company, Wipro. Major international companies include Intel, Hewlett Packard and Oracle, among many others.
Hyderabad – “Genome Valley”
Positioned right in the centre of India, Hyderabad, also a growing centre for IT, is one of the country’s main hubs for the pharmaceutical and biotech industries. Hyderabad Airport has India’s only temperature-controlled cargo facility. In 1999, the government set up a huge special economic zone called “Genome Valley” offering investment incentives and specialised laboratory space.
Major tenants include Swiss pharmaceutical company Novartis, Dr. Reddy’s Laboratories,
and Indian firm Bharat Biotech. Recognising the growth of the city’s pharmaceutical industry, Cathay Pacific launched a cargo service to Hyderabad in April 2012, followed by a passenger service in August.
