Indian companies need not worry about Brexit: UKIBC Chair

India-UK business relationship is going through an uncertain phase with no clarity on Brexit. While UK’s domestic politics keep Indian businesses with presence in that country on tenterhooks, UK businesses are looking for more clarity in the Indian regulatory environment and faster approval processes.

Lord Davies of Abersoch, Chair of The UK-India Business Council (UKIBC), in an interview with BusinessLine shared his thoughts on challenges that India-UK trade relationship is facing and the opportunity ahead. Excerpts:

I want to say upfront that I am a ‘Remainer’ and I'm also in favour of a second vote. These negotiations have been so complicated that everybody now realizes how intertwined the UK was with Europe, so to disentangle this is an incredibly difficult and complex situation. Nonetheless, the UK will always be a gateway to Europe. Has Brexit caused a slow down and has it caused people to hesitate, absolutely it has. If we crash out of Europe without a deal, then it will be catastrophic for the UK, nonetheless, the UK has a huge competitive advantage. I don't think Indian companies need to worry. In over the next decade, I see India-UK trade grow exponentially. My message to Indian companies is to be patient.

Yeah, I think one of the most competitive products that Britain has is its universities, and young Indians do aspire to go to the UK to attain education, however, we haven't captured more of that. We need more students to come to the UK. Britain is going to have a lot of trade deals to negotiate, so they're going to have to staff up and get on with it. We better get our act together viz-a-viz India given that India is among the top three markets for the UK. So it is going to be a massive priority for the government.

There is progress, it’s easier to do business and it’s improving. However, is it fast enough and consistent. Things like retrospective action and taxes are not a good idea. You can't have changes of policy favouring certain industries or incumbents.

India has been more open, there is progress, but, it cannot go back to being a closed market. It has to face the challenges of bureaucracy, climate change, environment, poverty, etc., and these are difficult challenges.

The global view of India is that it’s people's emerging as an incredible marketplace in some respects because of democracy. Though it’s compared with China, and that it's a bit slower than China. However, the Chinese model is very different and India’s is a democratic model, but the potential is huge and we need to do more.

There is absolutely no doubt in my mind that in financial technology India is going to be absolutely cutting edge. For example, you have tech giants like Infosys, Wipro, TCS and you've got a big financial services community. There is no doubt that India is going to be a world leader in this area.

The UK SMEs have to tap on to the scale of the opportunities and understand the country to gain profits because it’s a little scary for SMEs to invest in a large country like India. I think between the UK and India, there needs to be a lot of conversations.

The Indian start-ups’ are at par with which they can compete with the UK or any European companies. However, what I don't see yet is angel investing in the same way as in the UK. The reason is it's because it's a young phenomenon, it might happen in 5-10 years from now.

I tend to ignore it. You know this ‘America first’ is all rhetoric. We don't want to become insular and the barriers to trade is very bad for our future generations. So I'm a big believer in ‘we need open markets’.

I think the problem with democracy is that capitalism led to many people behind it. We have to accept that with capitalism and democracy we've got to take more people out of poverty, along with creating wealth and jobs.

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