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`Britain is the natural location for trade in Europe' Sir Michael Arthur, British High Commissioner to India

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If you analyse the 500 companies, Indian companies in Britain are growing every day and this is a very encouraging sign.

G. Srinivasan

INDIA and the United Kingdom (UK) now share bilateral relations closer than ever before. During the India-EU Summit held in September here, the British Prime Minister, Mr Tony Blair, emphasised the strengthening of not only India-EU relations but also bilateral relations with the UK.

With India on its way to self-sufficiency and a more open economy, Britain is keen on expanding and consolidating bilateral ties.

The British High Commissioner to India, Sir Michael Arthur, is optimistic about the prospects of greater partnership between the two countries.

Enjoying his stay in India with unconcealed enthusiasm, Sir Michael travels to different parts of the country during the two days in a week that he does not spend in Delhi.

He has been to Chennai, Bangalore, Kolkata, and Patna and Jharkand. He is gung-ho about India's growing economy.

Quoting the latest report by the UK Trade and Investment, a government organisation that supports companies in the UK trading internationally and those seeking to locate in the UK, Mr Michael said that Indian businesses had begun choosing Britain over other locations in Europe.

Investment from Indian businesses jumped nearly 30 per cent in 2004-05.

According to the report, Indian companies invested in 36 new projects, up from 28 the previous year. It is interesting to note that the UK leads in inward investments into Europe in software and computer services, having attracted 240 projects in 2004.

While the US remains the dominant investor, India's share in the UK is large and growing. Of the more than 400 Indian companies in the UK, around 340 are in IT and communications.

Sir Michael notes with pride that there are more Indian companies listed on the London bourses than in New York or the NASDAQ.

On the rather sensitive issue of outsourcing and off-shoring, Britain is a paradox as it is a leader both in off-shoring its own business processes and being the off-sourcing destination to other countries. The UK's call and contact centre sector is Europe's second largest, receiving around 3.3 million calls a day. Sir Michael spoke to Business Line on outsourcing and other matters governing bilateral ties. Excerpts:

On India's exports to the UK going up 47 per cent and that of imports from Britain rising 31 per cent during the first four months of the current fiscal:

Trade figures are encouraging and have been going up steadily in the last few years. In the current year, they are going up faster and this does not surprise me.

As interactions are growing between the two countries at different levels, investment figures are growing on both sides. I am not too surprised that trade is catching up. Bilateral trade is approaching $10 billion for this year.

As you open up, Britain is a natural place to locate in Europe to trade. India is No. 8 in our FDI (inward investment into Britain). The volume has been steadily growing in the last four years, and that is the key change.

If you analyse the 500 companies, Indian companies in Britain are growing every day and this is a very encouraging sign.

Also, they are into high-quality business and products. Sixty per cent of Indian investments into Europe come to Britain; Britain is the third biggest investor in India.

On the economic reforms being undertaken by the Government of India:

We would like some of the restrictions to be removed faster. Britain would also like faster liberalisation in sectors such as insurance, banking, and law.

Following the recent success of the open sky policy, British Airways doubled its flight to Mumbai. There were 19 flights a week to India in 2003, this went up to 45 flights a week this year and is set to touch 115 next year!

On off-shoring and outsourcing, and an easier visa regime:

We are way ahead of the US, where there is a public debate on whether we can afford to lose jobs to foreigners.

In Britain, that debate was won two years ago. We don't have the British industry investing in India either through subsidiaries or joint ventures in off-shoring.

We are trying to encourage Indian engineers and IT persons, also doctors and nurses, in the UK. We have a work permit visa, which enables Indians to work in the UK.

This year three lakh visas will be issued, each one is multiple entry and extends from a minimum of six months to a maximum of 10 years.

We are required by law to be very user-friendly in granting visas. Preparation of visa forms are outsourced to Indian companies; 11 such Visa Facilitation Services are functioning in India.

A new service that provides assistance in filing the visa application form has begun in India.

On his visit to various States and the involvement of UK's Department for International Development (DFID):

My impression is that there are huge economic differentials among and within States, both of which are growing. There is the widening disparity between cities and villages.

"India is the DFID's biggest programme and this year. It is spending a $400-million grant in India.

While 50 per cent of it will go to the Union Government programme for primary education and rural health and AIDS, the rest will be divided among the States of Andhra Pradesh, Madhya Pradesh, Orissa and West Bengal.

(This article was published in the Business Line print edition dated October 18, 2005)
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