The Hindu Business Line : UK urges India to open up financial, legal sectors

Chennai, Aug. 4 The British Deputy High Commissioner in Southern India, Mr Micheal Connor, on Saturday made a pitch for opening up India’s financial and legal sectors.

“Lloyd’s of London is one of the largest and most successful insurance companies in the world, but is currently prevented from operating in India. Foreign joint venture partners are limited to 26 per cent in their shareholding. Ironically, this industry needs more capital in order to diversify its services,” Mr Connor said in a lecture on India-UK relationship for the Centre for Security Analysis.

“In banking, there are still regulatory barriers. Higher ceilings on foreign shareholding in banks would encourage transfer of expertise,” he said.

Mr Connor dwelt in greater detail on the issue of FDI in legal services, mentioning at the outset that British lawyers have “no intention of practising at Indian courts.”

“What we are asking for is for British — and indeed, international — law firms to be allowed to practise in India.”

Mr Connor said it was not a question of “stealing Indian jobs”. He pointed out that the BPO companies of Standard Chartered Bank (SCOPE) and HSBC, both British companies, employed about 5,000 and 10,000 people respectively. The BPOs are entirely managed and run by Indians. “We must be careful not to protect today’s jobs at the expense of tomorrow’s,” he said.

Mr Connor also wanted the retail sector to be opened up for FDI. “We certainly have serious expertise in retail sector. I would urge India to move further towards the removal of FDI caps in retail, as this would bring great benefit to Indian consumers, farmers, logistics companies and indeed the whole supply chain from farm gate to dinner plate.”

Mr R. Seshasayee, Managing Director, Ashok Leyland and former President, Confederation of Indian Industry, who presided over the meeting, said in response to Mr Connor’s observations that the issue was “very complex, not merely because there are political positions taken but also because of issues such as reciprocity.”

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