UK’s Trade Commissioner for South Asia and Deputy High Commissioner for Western India CRISPIN SIMON spoke to GEORGE MATHEW about Indo-UK trade ties and the prospects for investments in the wake of Britain leaving the European Union. Excerpts:
The UK economy is facing recession. Bank of England recently cut growth forecast to 1.1 per cent in the next three years … Major sectors like steel and auto are hit. What’s your assessment on the economy?
I would not be overly concerned about one quarter. The UK grew quite well through the whole of 2019 and grew faster than many other countries in Europe. I would like European growth to be as fast as it can be as well because it promotes everybody’s prosperity. I think that a lot of people said that, when we, after we had the referendum, there would be a collapse in the UK economy and it just hasn’t happened. The UK economic outlook is good.
How do you assess the trade between the two countries at a time when both are facing slowdown?
We’re very interested in how the two countries can help each other. And not just in how we can sell more stuff to India. And so if you add the growth rate of the two countries together in terms of trade, Indian exports to the UK and UK exports to India, it grew by 6 per cent last year. And that’s a very satisfactory number. In fact, Indian exports grew faster than British exports, and that’s fine.
There’re reports that companies moved out of the UK due to Brexit. Do you agree?
There was talk about companies leaving, but there have been no substantial exits. I’m sure you will be able to find one or two examples. But there has been huge new increase in investment into the UK. One that I was particularly pleased with was the announcement by Tata Motors of hundreds of millions of pounds in electric vehicles in the UK to convert the Jaguar line from diesel to electric. And I find it particularly exciting, because obviously it was from a country outside the European Union, which is where we want to be developing our investments.
Do you think London would lose its position as the leading financial centre in the wake of Brexit?
I don’t agree with that. I think that ultimately whether or not London retains its preeminence as a financial centre, is if you provide products and services that people want to buy, right? It has sustained its market share through the last two and a half years. And I see no reason why it shouldn’t continue to do so.
How do you assess investments by UK companies in India?
We’re here to promote British investment in India and British exports to India, and the same the other way around — bilateral trade and bilateral investment. So there are some huge investments by British companies here. For example, BP has an enormous joint venture with Reliance group in oil exploration, and JCB, the digger manufacturer. As I drive around India, in every town and village, I see big JCB yellow diggers and they’re made across India in six plants, including a huge one in Navi Mumbai. And indeed, a lot of JCBs are exported to Africa.
So now you’re looking at a kind of three-way trading relationship … where you’ve got a design and engineering done in the UK, manufacturing done in India and then the final product ending up in Africa. I think that’s an exciting collaboration.
What are the major hurdles UK companies face when they make investments in India?
This is a glass half-full-half-empty question. India has made fantastic progress over the last three years moving from 144 to 66 in the ease-of-doing business ranking, and clearly it has been a huge effort by the central government and the states are also involved. That is the glass half full interpretation. And it would be great if they continue to improve. And secondly, I think there needs to be a focus in the minds of a lot of companies who are international investors on the issue of the courts … India still has a weaker performance in terms of the ability to resolve contractual differences … in enforcement of contracts in the courts. I think that is an area in which oversees investors would like to see continued progress.
Do you think Indian firms are nervous about investing in the UK?
An investment going the other way is Genpact acquisition in Glasgow, Scotland, as part of an extension of their wealth management business. That’s a financial services business and a big Indian company wanted to go in there. So if it had been nervous about the UK, if they had been nervous about financial services, then it wouldn’t have made that investment.
What’re your focus areas in terms of investments in India?
We’ve brought 15 companies in the field of artificial intelligence for the ongoing Nasscom conference. And this is the time that we want to give more investment in financial technology because it’s changing so fast and growing so fast, and secondly, to green technology, because there is such a significant need in the planet. In offshore wind, for example, Britain has gone from nothing to it contributing around 20 per cent of our energy needs at peak times. And that’s a lot of energy.
And we would love to share that with a country with such an enormous coastline and some pretty significant winds at certain times of year. So we are putting special emphasis this year on green technology.
How’s the trade in South Asia?
In the South Asia region — India, Bangladesh, Sri Lanka and Nepal — India accounts for 85 per cent … I think growth rate in Bangladesh has been consistently … And Sri Lanka is developing some free ports just outside Colombo … So it’s a competitive world for inward investment. It’s a competitive world and India will need to compete for overseas investment just like everybody else.
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