At a recent awards ceremony in Mumbai for Indian companies investing in the UK, the Tata Group won “Investor of the Year”. That is little wonder. Cash-rich Tata, one of India’s largest private conglomerates, has already done Britain a service by taking over and promising to rejuvenate steelmaker Corus. Now it is considering acquiring another struggling legacy company – Jaguar, the lossmaking marque being sold alongside Land Rover by Ford.

Tata has the estimated $3bn required to buy Jaguar and Land Rover. The group’s automotive unit, Tata Motors, India’s third largest carmaker, is virtually debt-free after stripping out its vehicle finance business. The problem is how such an acquisition fits with Tata’s strategy of developing low-cost cars for emerging markets. Tata already faces challenges with a project to develop the world’s cheapest passenger vehicle, the “one lakh car”. This will retail at about $2,500. But rising raw material costs are hampering the project.