Prime Minister Narendra Modi and United Kingdom Prime Minister Boris Johnson announced an ambitious Roadmap 2030 in order to deepen ties between India and the UK across different areas. BusinessLine spoke with Richard Heald, OBE, Group Chair, UK India Business Council to understand how the various initiatives will help businesses in the two countries. Excerpts
Q Overall, did you think the announcement met your expectations or were you looking for something more?
Ans: I see it as a critical stepping stone, as a statement of intent. There is a determination by both the Prime Ministers to move forward with a free trade agreement. From my point of view, the absolute definitive announcements are maybe not as impressive as one might wish. But actually, if you look through that at the ten-year roadmap…the wheels are going to start to turn. I think there is real hope that we can make something happen here.
Q. Have concerns around Brexit become a thing of the past when it comes to Indian businesses investing in UK?
Ans: Vast majority of Indian investment in the UK is not in order to gain access to the EU, but rather to get access to UK capabilities. I am reminded that when the referendum occurred, there was an interesting survey that was done of Indian businesses which indicated that over half of the companies invested in the UK for UK specific reason. So I don’t think that has changed. There has been a growth of FDI into the UK where India ranks no 2 or 3. So I am not sure if I would necessarily subscribe to the idea that there is a concern with relation to Brexit.
Q. One of the key underlying issues that was behind Brexit was to prevent the immigration of people from different countries and races. Has this impacted sentiments on the ground when it comes to Indian professionals or students going to the UK?
Ans: The UK is an extremely open economy and country in terms of welcoming people and ethnicities. After all, we have one of the largest Indian diaspora anywhere in the world. They contribute hugely to the economic activity of the UK. As far as immigration is concerned, there is an acknowledgment of the importance that qualified and educated Indians and people of Indian ethnicity can play in the UK economy. I also think in the context of strengthening the UK-India relationship, that has to be a critical cornerstone going forward. Now when we come to students, there has been a decline in the number of Indian students coming to the UK but that’s changing. We focus on Indians coming to the UK but we should also focus on how we should export our educational content into India. And we as an organisation have been very vocal in relation to the foreign education act in India which we feel is an extremely useful tool in which to export content for a very large number of Indian people
Q. From the UK business point of view, there have been a number of issues especially those related to tax. Does this continue to be a sore point when it comes to UK businesses investing in India?
Ans: I find it profoundly unfortunate at the situation that is occurring and the focus being given to retrospective tax on companies like Cairn and Vodafone. It is important that rule-based systems are rigorously respected. But is it something that is preventing investment into India? The answer is No. Is it a risk factor to be borne in mind? It is yes.
Q. According to UKIBC report on ease of doing business, 21 percent of UK businesses continue to find it difficult to do business in India. What can Indian policymakers do more in this regard?
Ans: Single most issue that comes up consistently is dealing with the bureaucracy. Clearly digitising approvals has made a huge difference and more can be done on that. And also I think small areas such as single-window dispute resolution are seen as important facilitators
Q. The UKIBC ease of doing business survey showed a surprising 77 percent were positive about Atmanirbhar Bharat, believing it is an opportunity to do more investment and trade with India. Could you share your insights on how UK businesses are thinking when it comes to this aspect?
Ans: I agree that there are certain parts of UK businesses that find the self-reliant India initiative difficult to understand. But I think the 77 percent you cite is the depth of UK businesses that are operating in India at the present moment in time. So they are exposed to and benefit from the breadth of opportunity in the Indian economy. These are companies that plough back profits and dividends in order to expand in India. So they understand that it isn’t just about benefits to Indians and helping the domestic market, it is also about manufacturing in India and exporting to developing nations that are approximate or contiguous to the Indian economy.