Britain seeks Indian market as Cameron comes visiting

July 26th, 2010 - 7:51 pm ICT by IANS  

David Cameron By Venkata Vemuri
London, July 26 (IANS)Prime Minister David Cameron arrives in India Tuesday on his first official state visit to build a “special relationship” with the onetime “jewel in the crown”, seeking for British brands and business a market in a surging economy with which ties, it feels, had fallen into neglect during more than a decade of Labour rule.

The visit is happening as Britain crawls out of its deepest recession since World War II with growth barely crossing one per cent, while India’s economy is slated to grow at a rate of nine per cent.

“We want British brands and businesses to be able to make the most of a fast-expanding Indian middle class. Today we export four times more to Ireland’s population of less than five million than to India’s of 1.2 billion. That must change,” British Chancellor of the Exchequer David Osborne said on the eve of the visit.

According to official figures, in 2009 the total Indo-British bilateral trade was worth &pound11.5 billion, with British exports to India totalling &pound4.7 billion and &pound6.8 billion of Indian exports to Britain. India is the fourth-largest single investor in Britain, while British investment in India lags behind Singapore and the US.

Accompanied by a high-level business delegation, Osborne will interact with leading industrialists, businessmen and business organisations in Mumbai Tuesday.

“Our two countries have the potential to forge a new economic partnership and further develop, to our mutual benefit, the trade and investment links in financial services and the wider economy,” said Osborne.

The Cameron government has been critical of previous Labour government’s approach to the so-called BRIC (Brazil, Russia, India and China) emerging economies. It has made scouting of foreign investment and boosting of trade a key foreign policy agenda to accelerate economic recovery at home.

And so the effort to boost trade links with the former “jewel in the crown” of the British Empire and now the world’s second-fastest growing economy.

Cameron’s business agenda can be gleaned from the various releases made in the last week by British trade and business organisations.

Britain is eyeing India’s infrastructure sector where the country is expected spend $500 billion on new ports, roads, rail links and airports in the next three years.

A key objective of the British visit is to facilitate economic interaction in the form of entry into India for the British services sector.

Britain looks to enter the retail market in India which is worth around &pound227 billion and is forecast to grow to &pound352 billion by 2014. Cameron’s concern is that Britain’s biggest companies remain locked out by tight investment regulations in India.

British banks and accountancy and law firms are similarly restricted, while a bill to allow our universities to establish campuses in India has yet to be approved by parliament.

The British team is also interested in the proposal to set up a CEOs Forum of British and Indian business executives to explore how to dismantle regulatory barriers to trade and make recommendations to their governments.

The area which Britain wants the forum to address is how to promote British investment in Indian infrastructure projects and support for British small and medium-sized enterprises (SMEs) while overcoming the problems of corruption and restrictions.

Another issue is the India-EU Free Trade Agreement which Britain proposes to salvage since it faltered with India and the EU accusing each other of imposing tariff and non-tariff barriers, such as restrictions on the free movement of workers.

(Venkata Vemuri can be contacted at venkata.v@ians.in)

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