UK – India Trade & Investment Statistics – July 2010

Posted on July 27, 2010 by Vikas Pota

I found the following here:

India’s economic and political influence in the world is growing. It has enormous dynamism and potential.

India is critical to HMG’s objectives; from development, regional stability and trade and investment to energy security, climate change, counter terrorism and reform of the global international systems.

The government is committed to a special relationship with India, one that reflects our deep and historic ties and recognises India’s strategic importance.

This is underpinned by strong people-to-people links. Over 1 million people travel between the UK and India every year. Between 1.5m and 2m people of Indian origin live in the UK, the largest ethnic group. They make a significant contribution to the UK economy and enrich British society with their traditions, culture and diversity.

Partners in business
Trade and investment flows between the UK and India are two-way and continue to expand rapidly. The UK is by far the most popular business destination in Europe for Indian companies. 700 out of the 1200 Indian firms in the EU operate from the UK. Tata is the largest single manufacturing company in the UK.

Bilateral trade was £11.5 bn in 2009 and £ 12.6 bn in 2008 (Source: BIS Economics & Statistics Directorate, UK). In 2009, UK exports to India (goods and services)were £ 4.7 bn (£4,687mn) and imports from India were £ 6.8 bn (£6,763mn).

The UK is the largest European investor in India and the fourth largest internationally (after Mauritius, Singapore and the US) with £3.87bn of FDI stock in 2008. Indian FDI stock in the UK stood at £3.43 bn at the end of 2008.

The two biggest acquisitions for India globally involve the UK: Vodafone’s £7.3bn ($11bn) acquisition of Hutchison in 2007 and Tata’s £8bn ($12bn) acquisition of Corus in the same year.

Partners in the Knowledge Economy

Together, the UK and India are leaders in ensuring that knowledge sectors drive inclusive economic growth in the 21st century.

There is an increasingly close partnership across all stages of learning, from support to primary school children, between UK and Indian Universities, to research into the most advanced technologies. UK skills providers and their Indian partners help deliver vocational training to young Indians.

International education is worth over £5bn each year to the UK, part of a total of £28bn generated by the UK’s international education and skills sector. Over 40,000 Indian students enrolled for higher education courses in the UK in 2009, the second largest number after China.

There are over 80 collaborative UK-India programmes leading to UK degrees or awards in India. There are some 5,000 Indians studying for UK degrees in India.

India is one of the British Council’s biggest operations. In 2009-10 British Council administered over 210,000 UK exams in India. These were primarily English language tests and professional qualifications. The Council’s Project English aims to ensure that teachers and students of English have access to materials they need. The Project will train 3000 master teachers of English, and eventually reach 750,000 English teachers in India.

Up to 700 scholarship awards are offered to Indians by UK institutions each year, including 50 FCO-sponsored Chevening scholars. The 2006-11 UK-India Education and Research Initiative (UKIERI) has linked 475 schools and higher education establishments in the UK and India.

UK and India researchers collaborate in a wide range of areas, including key issues of global concern. The Research Councils (RCUK) Office in India and the UK Government Science and Innovation Network promote this work. In 2010, agreements were reached for up to £70m of joint-funded research in key areas including renewable energy, water, food security and health.

Partners in development

The UK works with the Government of India to reduce poverty and meet the Millennium Development Goals. DFID provided £285 million in aid to India in 2009-10, of which 44% went to national government programmes; 41% to the states of Bihar, Orissa and Madhya Pradesh, West Bengal and Andhra Pradesh; and 15% to multilaterals and civil society organisations. DFID graduated from its programme in Andhra Pradesh in 2010.

This partnership has delivered real impact in India. Since 2003, it has put 60 million additional children into school and provided 1 million new classrooms and teachers. Since 2005, it has helped save one life every 30 minutes (17,000 each year). Between 2008-10, it has provided 13 million people with access to improved sanitation.

Partners in security

Both the UK and India have suffered serious terrorist attacks over the years and are among the strongest proponents of international co-operation to counter terrorism and extremism.

The UK and India are strategic partners in this field. Bilateral operational links are expanding and deepening, in particular in the run-up to the 2010 Delhi Commonwealth Games and the 2012 London Olympics. The UK and India are sharing best practice in planning and preparedness in crisis management.

The UK-India defence relationship has never been stronger. The bilateral programme of exercises, exchanges, training courses and high-level visits across all Services continues to accelerate. The defence equipment co-operation is in good shape and includes supply of AW101 helicopters and Hawk Advanced Jet Trainers.

Partners on global issues

The UK strongly supports India’s candidature for a Permanent Seat on the UN Security Council and will continue to work with India to achieve this.

The UK and India are partners in the G20 and worked closely together to promote a global recovery after the 2008-9 financial crisis.

Migration

Migration is an important part of the UK-India relationship. The UK has its largest visa operation in India – with close to 425,000 visa applications made in 2009. The aim of the visa system is to allow the admission of genuine visitors, workers and students, whilst preventing abuse of the UK’s immigration system.

UK and India have a shared priority to prevent irregular migration and associated exploitation, and to effect the timely return of illegal migrants. We are working well together to achieve these objectives

Commonwealth Games

The UK looks forward to celebrating the Commonwealth Games in Delhi in October. The UK will be represented at the highest level by HRH the Prince of Wales.

The UK has full confidence in India’s commitment to deliver safe, secure and successful Games. British and Indian police and security officials are co-operating closely in the run-up to and the hosting of the events.

Last updated: 16 July 2010

Where can the UK – India partnership go? Take Two…

Posted on June 16, 2010 by Vikas Pota

If you recollect the 90s, any mention of India in the West used to be hyphenated with the word Pakistan following it. It was at the end of one of the most gruesome and violent periods in the recent history of India that the Blair Government swept to victory. India had a nationalist coalition government at its helm for the very first time, who flexed their muscles on issues concerning national security. In 1998, they broke the moratorium on nuclear testing and suffered global sanctions, which are now defunct and removed.

Recognising the need to hedge its bets, Blair embraced India as a counterbalance to China, despite it not having the promise that we see today; and in all fairness stuck at it despite disastrous visits by the Queen and also by Robin Cook, the then foreign secretary. Little did he know at that time the Y2K bug would actually prove to be a major boon for bilateral relations as it was around this time that Indian IT firms started winning global IT contracts as a result of their price advantage, heralding a promising trade & investment partnership.

Blair’s New Labour Government followed this up by a phenomenal visit to India in 2001, where he signed the New Delhi declaration, which he broke the mould. Simply put, he turned the way the world thought about India, and India knew his endorsement really mattered. For the first time, the UK stated that India was a deserving member to the top table of the international community – he committed to campaign for a permanent seat on the UN Security Council. This was ground-breaking on any terms.

He followed up by ensuring that India became Britain’s largest bilateral aid & development recipient. His logic was simple: to achieve the Millennium Development Goals, the UK taxpayer needed to assist India in eradicating poverty, after all to make an impact on the global scale, India was critical as a third of the world’s poor live in India.

Like this, whether we talk about improving defence ties, promoting education exchanges, increasing trade & investment, Blair pushed the boat out. Every single government department had to have an India champion within it.

In later years, Brown as PM continued on the same trajectory. By this time, India was a permanent fixture at G8 meetings – which would’ve been inconceivable even a few years before, and a true partnership emerged between Manmohan Singh – an economist and former Finance Minister of India & Gordon Brown – an academic and long time Chancellor of the Exchequer.

In later years, the wheels may have come off slightly (read my post on David Miliband’s visit to India as Foreign Secretary, click here), but it’s important to recognise that the Labour government was radical in its approach to India. Like I said before, they truly broke the mould.

Given all the rhetoric on the Conservative Government’s desire to build an “enhanced partnership” with India (the Queen singled out India in this year’s Queen’s Speech), I’m scratching my head as to how they’re going to differentiate themselves from New Labour’s record on India – which incidentally could’ve alienated a massive anti Indian support base that exists within the Party, which almost makes Blair’s support for India even more praiseworthy.

Here are my suggestions as to what the Conservative Government could do to deepen relations with India:

1. Build on the foundations of the UK – India Education & Research Initiative, by promising more funding to promote institutional linkage that can take advantage of the new Indian laws allowing foreign universities to set up there.

2. Take stock of the trade & investment relationship. Why is it that despite so many independent agencies and taxpayer funded promotion bodies our trade support system struggles to excite SMEs to seek partnerships in India. The legend that is Alpesh B. Patel, again reinforced the view that we (read ‘he’) do well in attracting Indian investors to the UK, but struggle in the opposite direction.

3. Don’t cut aid to India. When Andrew Mitchell visits India, he’ll be surrounded with millions of reasons of why we should continue. My friend – Geoffrey Clifton Brown MP, who at the time was a Shadow International Development Minister, visited India last year as part of the IPT delegation and recounted his experience which supported and recommended continued support & aid.

4. Engage the diaspora, for example invite prominent members of the thriving business community to join business & political delegations to India. One of our biggest assets is our diversity. With so many people of Indian origin in this country, make the most of it.

Maybe like George Osborne’s efforts to crowd-source views and suggestions, Prime Minister Cameron may wish to throw a life-line to the civil servants whose job is to put some meaningful suggestions on what an enhanced partnership could look like before his widely expected first visit to India.

Incidentally, another friend – Rahul Roy-Chaudhury, who’s a leading policy expert on strategic & security issues at the IISS wrote the following piece, which proves to be a good read: http://www.iiss.org/whats-new/iiss-in-the-press/june-2010/uk-india-a-special-relationship-for-the-21st-century/?vAction=fntUp

David Cameron meets Indian CEOs

Posted on June 15, 2009 by Vikas Pota

I’d organised a meeting yesterday between David Cameron, Leader of the Opposition, and a client of ours called ‘The India Group’, which is an alliance of the European based CEOs of large Indian private sector firms. Not only did we meet someone who’s described as our next Prime Minister, he also made sure that William Hague, Shadow Foreign Minister, and Ken Clarke, Shadow Business Minister, both of whom are considered ‘heavyweights’ in the Conservative Party, and should retain their high profile portfolios if they form the next government, attended this meeting.

Cameron was relaxed despite having to respond to the Prime Minister’s Iraq Inquiry statement later in the day. He appeared knowledgable and personable and had, what seemed obvious to me, been briefed appropriately in advance on the key issues that may arise.

So, it’s no surprise that business immigration featured highly with the IT companies leading the charge on labour mobility within the UK in the context of TUPE legislation. He spoke about Ken Clarke leading a review on Whitehall red tape that will help form their policies in advance of the next general election.

On trade promotion in India, Cameron suggested that some of the Regional Development Agencies across England would be put on notice. He recognised that trade promotion in India may also need looking at and the India Group recommended that just as Indian SMEs seemed to be embracing opportunities in the UK, the Government really needed to push British SMEs to do more with India. Banks like ICICI had tried linking up with counterparts in the UK to provide trade finance for their clients interested in India, with not much success, which seems a shame given the scale of the opportunity.

Hague spoke about a better relationship on foreign policy, which all India watcher’s will agree about, especially as Miliband’s visit to India was seen as an unmitigated disaster. Hague spoke of their support for India and Japan for permanent seats on the UN Security Council, which we know China has a different view on.

The Conservative team were interested in the pace of market reforms the new Congress lead coalition would take, to which the India Group agreed that the Insurance sector would probably be the first to have FDI levels increased. What was interesting was that the CEO’s, all, were united in conveying that despite the shortcomings in some industry sectors, India was open for business. It just so happens that the two big sectors that the UK has particular competence in – financial services and retail – are the one’s that have yet to be liberalised. Fair point.

Closer to the hearts of some of those was the issue of personal taxation and non-dom, to which Cameron was quick off the blocks to suggest that had the government adopted the plans they’d suggested, those around the table would have the certainty they desired.

I’ll conclude with sharing how they started as it’s an important point. Cameron emphasised that both – the Labour Party & the Conservatives (a) didn’t really differ on issues concerning India – whether this was trade or foreign policy and (b) that both parties shared the view that Britain was a better place as an open globalised economy, one which market protectionism and restrictive practices were unwelcome.