Eastern promise

Merrill Lynch in February appointed Kevan Watts, London-based chairman of Merrill International, as president of its India arm. It has also appointed one of its heads of European investment banking, Jayanti Bajpai, to lead the Indian advisory division. Meanwhile, Morgan Stanley has brought in Aisha de Sequeira, a New York-based managing director for M&A, to rebuild its Indian investment banking division. De Sequeira, an Indian national from Goa, has recruited a 25-strong team, about 10 of whom were drawn from London or New York.

The list goes on. Lehman Brothers shifted Tarun Jotwani, co-head of its European fixed income division, from London to open its Mumbai office last year. Over in the Middle East, the Gulf state of Dubai is drawing even bigger names.

Only yesterday it emerged that Philip Lynch, the London-based co-head of equities for Europe and the Middle East at Lehman Brothers, is moving to Dubai after more than two decades.

Barclays last month appointed Roger Jenkins, said to be one of London's highest-paid bankers, as chairman of investment banking and investment management at its Middle East office.

Citigroup also moved Alberto Verme, co-head of global investment banking, from London to Dubai.

The Middle East is arguably the greater opportunity. The region's state-owned investment funds are more acquisitive even than India and China's new multinational companies. Investment banks' Mumbai offices tend to prefer Indian employees, and it is difficult to operate in Shanghai without speaking Mandarin.

A British banker who's been in India for more than a decade says there are big cultural challenges for expatriates: "It's a very relationship-dominated market. Also, the skills base now for people of Indian origin is very high."

Europeans and Americans who have specific skills can still find a niche. Alex Potter, a partner with London law firm Freshfields, was recently sent out to Beijing despite not speaking Mandarin, because of the launch of new competition law: "We'd have a preference for most of our lawyers to speak Mandarin, but there's a role for people who don't have the language skill."

Banks that have only set up in India in the last few years also need to bring in some executives from their biggest international offices to make sure the right internal procedures take hold.

And once they've arrived, Europeans are at no significant disadvantage, argues Roddy Sale, former head of JPMorgan's India business, who has been in Mumbai for 15 years: "Whether you're ethnically Punjabi or ethnically English doesn't matter."

Another veteran British banker argues that Indians brought up in the US or Europe often have more problems than their European colleagues. "Some Indians with British passports, who've never lived in India, become very arrogant.

"Indians who've started out in India are much more grounded. There are many of that group coming back - who've done 15 to 20 years in London or New York, but who feel the opportunities are now at home."

Ex-London bankers who move East are also more powerful on the global stage. Both Watts and Bajpai will still retain responsibilities in Europe, for example, as will Jenkins at Barclays.

As Sale says: "If you go to work in New York, no one asks: 'Are you going to be there forever?' The distance between going East to Bombay or West to New York is hardly any different."