India is being wooed again. In the space of a few days, both the French President, Francois Hollande, and the British Prime Minister, David Cameron, have turned up at its doorstep with palms outstretched in search of business contracts.

It will have come as a soothing balm to an Indian government facing increasing disillusion at home and growing cynicism on the part of investors abroad.

There was a period, especially in the last decade, when India’s policymakers could do no wrong in the eyes of global capital and western powers. Then, the same policies that were celebrated as causes of India’s dynamism were discovered to have resulted in corruption, cronyism and growing inequalities. Popular revolts against these conditions forced even the global media to take note. And now, suddenly, India is acceptable again. Even the more unpleasant elements such as Narendra Modi — once shunned following the pogrom of Muslims in Gujarat, under his watch as Chief Minister — are brought in from the cold.

Within India, this renewed enthusiasm is hard to understand, as the macroeconomic indicators continue their downward trend to the point that even India’s central bank is sounding warnings about the future. Gross domestic product (GDP) growth is projected to be only 5 per cent this fiscal year — the lowest in more than a decade. The current account deficit is 5.3 per cent of GDP — much higher than what it was before the 1990-91 crisis — and it is being funded by highly volatile flows of short-term finance that can be easily reversed. The general election next year is likely to throw up no clear result, portending more uncertainty.

So why all this interest in India? Of course, it is true that while India’s economic growth may be decelerating, it is still higher than Europe’s and the Indian market is unquestionably vast. Also, India and China are two of the few remaining “hinterlands” for global capital to penetrate through privatisation, since there are large public sectors.

While the French president was low-key about his intentions, Cameron made no bones about his: Big business and still bigger business. He brings with him more than 100 “captains of industry”, supposedly the largest such delegation ever to accompany a British PM on a foreign trip. And the delegation went first to India’s business capital Mumbai and only afterwards to the administrative capital New Delhi.

Cameron spoke on Monday of his vision of becoming “the partner of choice” for what would become one of this century’s major economies. Lots of work is required there: Trade with the UK has been declining in importance for India, with exports to the UK only 2.5 per cent of total merchandise exports (compared with 6.5 per cent in 1990-91) and imports from the UK even less significant at 1.5 per cent (down from 6.7 per cent in 1990-91).

For such ambition, Cameron’s actual promises were somewhat bonsai in nature. He promised £1 million (Dh5.67 million) to help fund a feasibility study into using British expertise to develop a “business corridor” between Mumbai and Bengaluru — an amount so pathetically tiny that it may even have embarrassed his Indian listeners. And he promised easier and greater visa access to Indian students coming to the UK — perhaps a belated response to the reduction in Indian student numbers that has become a matter of concern in British universities.

Both miss the point. Cameron’s strategy of engagement is based on the continuation of an Indian economic strategy that has lost its legitimacy within the country. It ignores the genuine Indian economic concerns about British policy with respect to trade and investment rules and intellectual property rights.

It underplays and even seeks to accentuate the growing inequalities of opportunity that afflict education and result in a brain drain. So it is unlikely to gain much traction in India, however large the size of his delegation. In such a context, maybe a smaller but smarter group of British visitors may have been more effective.

— Guardian News & Media Ltd

Jayati Ghosh is professor of economics at Jawaharlal Nehru University, New Delhi.