Cameron Urges India to Cut Trade Barriers, Boost Jobs
British Prime Minister David Cameron listens during a meeting. Photographer: Christopher Furlong-WPA Pool/Getty Images
U.K. Prime Minister David Cameron urged India to remove barriers to free trade to create thousands of jobs in both countries.
Cameron is visiting the southern city of Bangalore, India’s technology hub, with a delegation that includes 39 business leaders and four members of his Cabinet. The premier is seeking to sell Britain as a place for Indian companies to do business while asking India to create opportunities for U.K. investors.
“We want you to reduce the barriers to foreign investment in banking, insurance, defense, manufacturing and legal services -- and reap the benefits,” Cameron said in a speech at Infosys Technologies Ltd., India’s No. 2 software-services provider. “More investment in each others’ economies will be a vital boost to both our countries.”
The threat to the British economy from the euro-region debt crisis and the need to cut the budget deficit prompted Cameron to focus foreign policy on trade and investment. India’s government estimates this year’s growth will be the fastest in three years. Global negotiators have been in talks since 2001 to lift trade barriers in emerging economies such as India because they’ve been unable to reach agreement on farm subsidies.
Cameron also visited the Hindustan Aeronautics Ltd. headquarters in Bangalore, where BAE Systems Plc and Rolls-Royce Group Plc signed an agreement valued at about 700 million pounds ($1.1 billion) to supply 57 Hawk pilot-trainer aircraft to India.
‘Generate Growth’
In his speech, Cameron said that Indian plans to invest more than $750 million in infrastructure in the coming years are “good for Indian business, but it is also a chance for British companies to generate growth.”
Business Secretary Vince Cable said today he would allow British companies to seek access to India’s civilian nuclear industry, marking a change in government policy.
“There is already a declaration under which a certain amount of modest research can take place -- we want to take this to a higher level,” Cable told reporters in Bangalore. “There are British companies like Rolls-Royce, Serco and others that could do a large amount of business in India.”
Cameron cited the “deep and close connections” between the two nations. India gained independence from Britain in 1947, and almost 2 million people of Indian origin live in the U.K.
“I want this to be a relationship which drives economic growth upwards, and drives our unemployment figures downwards,” Cameron said. “I want to see more Indians setting up in Britain and more Brits setting up over here.”
‘Spirit of Humility’
In an article for the Chennai-based Hindu newspaper published today, the prime minister said he’d come to India “in a spirit of humility,” aware that “Britain cannot rely on sentiment and shared history for a place in India’s future.”
Cameron said he’s traveling with “the biggest visiting delegation of any British prime minister in recent memory” and that he is “selling” Britain to the world again “with more vigor than ever.”
Business leaders on the trip include BAE Systems Plc Chairman Richard Olver; Michael Queen, chairman of 3i Group Plc; John Varley, chief executive officer of Barclays Plc; Vodafone Group Plc CEO Vittorio Colao; and Stuart Popham, senior partner at international law firm Clifford Chance LLP.
Foreign lawyers are lobbying the Indian government to be able to give corporate advice to Indian clients. Barclays plans to quadruple the amount of money it manages for rich clients in South and Southeast Asia in the next five years, the London- based bank said last month.
Immigration Curbs
While Cameron is calling on India to open up its markets, his Conservative-led coalition government is planning a cap on non-European Union immigrant labor at home. That has led to criticism from the Indian government, with Commerce and Industry Minister Anand Sharma warning the quota might hit Indian doctors, nurses and engineers seeking employment in the U.K.
The proposal is also at odds with the views of Cameron’s Liberal Democrat coalition partners. Cable told Indian journalists before the trip that he wants a “liberal” immigration policy.
Cable defended his position today, arguing that it is his role in government to raise the concerns of business.
The issue has been “raised with me by Indian businesses and not just Indian businesses,” Cable told reporters in Bangalore. “The answer to them is we are trying to achieve a balance.”
‘Light Touch’
“We want flexibility, we want these regulations when they come in to be administered with a light touch,” Cable said.
India is the second-largest foreign investor in Britain after the U.S., with Indian-owned businesses generating more than 14.4 billion pounds of sales in the year ending March 2010, according to the Indian Commerce Ministry. Mumbai-based Tata Motors owns the Jaguar and Land Rover brands and Tata Steel Ltd. owns U.K. steelmaker Corus Group Ltd.
While the U.K. ranks fourth among foreign investors in India, its share of the total is just 5 percent in rupee terms.
Indian exports to the U.K. fell 0.8 percent to $6.6 billion in the year ended March 31, ministry figures show. Imports from Britain during the period rose 18.5 percent to $5.9 billion.
Cameron also called on India today to reach agreement on a free-trade deal with the EU by the end of the year and to make progress on a global trade accord. The so-called Doha Round of talks collapsed in July 2008.
“It’s time to hammer out a global deal on trade,” Cameron said. “Agree on Doha, and do you know how much we would add to the world economy? $170 billion.”
Away from business, Cameron said he wants to broaden a partnership with India on countering terrorism before the Commonwealth Games in New Delhi this year and the 2012 London Olympics.
After his visit to Bangalore, Cameron will travel on to New Delhi for a meeting with Indian Prime Minister Manmohan Singh tomorrow.
To contact the reporter on this story: Kitty Donaldson in Bangalore, India, at kdonaldson1@bloomberg.net.
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