‘If firms can’t sell, invest in US, then there’s UK; India biggest priority for Britain’

What do you think about US tariffs on India and the UK? What does it mean for India-UK trade? What happens when the US doesn’t play by the rules?
That is for the US to decide. There is nothing for the UK to comment on US tariff policy. The UK-India relationship is fine. We have decided on a tariff relationship and it’s about to be ratified (by the UK Parliament) and come into force. So our bridge is very strong and continues to be so. The bridges between US-India and US-UK are separate and it doesn’t affect that. It would basically be for Indian companies to decide what to do. If they can’t sell or invest in the US, then there is the UK. That is the impact which is a positive one for the UK and we are more than happy to accommodate increased Indian activity into the UK, that’s my job. But we don’t promote it that way, that’s a ridiculous thing to do. And it’s not for me to comment on US policy.

Do you anticipate any hiccups in the ratification of CETA by the Parliament?
It is going very smoothly. Our ratification process is much more complicated and thorough. It goes through both houses, there are trade committees in the House of Commons and the House of Lords that look at international deals. It is not the first time they’ve looked at it. Pretty much the things we expected have been raised. There’s nothing that makes me think there’s going to be trouble. So, my guess is that it could be done sometime in this half of the year.

How is the trade deal going to impact both countries?
The deal is expected to deliver £25.5 billion ($34.25 billion) worth of extra trade between the two sides in the middle to long term. Even before being ratified our trade has already gone up. It was about £43 billion in FY24 and I think it’s going to £47 billion already, just based on the confidence that the trade deal has instilled in both sides. And when you talk to the firms on both sides, the appetite is huge to ease bilateral trade.

Could you talk about British companies’ investment interest in India?
It’s been both ways. There are 700 UK companies already here. And there are 900 Indian companies over there so it’s already happening in large volume. It will help by having this sort of treaty by making people more confident in the mid to long term. Because companies don’t operate on a one-year cycle. If you’re going to put up investment and capacity down, you’re thinking in 5-10 year horizons and these deals instill confidence that there will be stability and that’s what firms really look for — stability, to put a factory down or put some investment in another country.

What is the balance of trade between the manufacturing and services sector in terms of investments?
The UK is a predominantly service sector country at about 80%… and India is also 50%, if not more. In the WTO, there are a lot of schedules in terms of who can deliver what service in what country. A lot of those have now been formalised in our FTA. That’s again a symbol of stability and you have long term visibility that both sides would be able to continue doing this for the perceivable future.

What is Gujarat’s share in India’s trade with the UK?
We had a report commissioned which shows the trade inflow into India and investment outflow into the UK and Gujarat is right up there. It is known for many things that the FTA will help with — textiles is a big one. It will benefit substantially from lower tariffs. We have a preferential developing nations trading scheme for Bangladesh and Sri Lanka, where the tariffs are lower and agreed upon across the system. But India is a mid-sized economy. There was a kind of differential in tariff (for textiles) which made it uncompetitive to produce in India and export to the UK. The other big sector is gems and jewellery which will be a big beneficiary of the lower tariffs regime.

While the FTA was being signed, the UK sanctioned Gujarat refinery of Nayara Energy for buying Russian crude. Does it impact the business sentiment?
Those are the geopolitical things with global ramifications for trade. Effectively, you know what’s happening in Ukraine and our position is very, very clear as a country. To finance that war, the oil trade is absolutely key and the sanctions are designed to stop that and reduce the war that is underway.

The Vibrant Gujarat Regional Summits are currently underway in Gujarat. Do you anticipate any major signings by UK companies?

Every state is doing that (investment outreaches) now and are in competition with each other. Most of the (Indian) states are as big as countries. What I say to all the chief ministers that I meet is ‘give me a reason why I would say to a company that they should come to their state’. In marketing terminology what is the unique selling proposition (USP). And that’s for this state to work out and prepare a marketing pitch for companies to come to the states.

What’s your ask from the Gujarat government? What would make Gujarat attractive to British companies?

I haven’t had that conversation yet. There are a lot of opportunities here and when you look at Gujarat, there are the sectors I mentioned earlier and then there are others like energy. Gujarat has a vibrant coastline which has enough of the wind requirements to have offshore wind energy as a real possibility. Some of the projections for viability are in Gujarat and Tamil Nadu. If the Gujarat government was open to it, we are experts in this field. The UK has one of the world’s best offshore wind capabilities in the world and we will be absolutely delighted to partner with this state to help develop it.

How do you see the Indian diaspora in the UK helping out in trade and becoming a bridge between the countries?

There are almost 2 million people of Indian heritage and you are looking at one. There are two things that happen. One is that the sentiment and relationship and understanding of the country is deeper than it would have been with some other country. The diaspora helps with connectivity. Also the cultural side is very strong, whether it’s the music or the food. What’s the national dish of the UK? Curry. It’s the number one dish eaten in the country and that sort of thing does transcend.

Then, there are business links. The diaspora are very business savvy people and they’ve done really well, whether it’s the Gujarati or Punjabi communities, and their links here are key. In fact, a lot of the UK interest (in India) is by SMEs. And those are diaspora-led.

There is also the medical and nursing community. The link between academics is also key. Professors and universities are coming to India. I’ve had 30 visits by vice-chancellors in the last 12 months. There is a huge appetite, and Indian and Chinese students make up the biggest groups of foreign students in the UK. Universities are seeing the size of the (Indian) population and its emerging middle — about 250 million in the next 5-10 years. That middle class wants UK-type education, but not in the UK. So can you get it here? How do you do it? Do you create a campus here, a joint degree with an institution here or a distance learning option, all options depending on the university you’re looking at; and it’s not just universities, schools from the UK are coming up in India.

You’ve worked with AstraZeneca, one of the biggest global pharma companies. What opportunities do you see in this sector, especially in Gujarat, a pharma hub?

Indian companies are generally known as makers of generic medicine. There is a very thriving generic industry here. As per my discussions, they are also doing R&D and innovation and moving up the value chain. We want to see how they can partner up with the UK while doing it. We are a powerhouse in the life sciences space. Research, development, medical technology, we have been exceedingly good at it. It’s part of our new industrial strategy launched last year. There are eight sectors that we picked which we are good at and we picked them, saying we are going to be world leaders… Life sciences is one of them.

There’s a lot of development in this sector in Hyderabad and Bengaluru and Gujarat has a lot of generic pharmaceuticals but they are also looking at how to compete in the value added part.

Since the prices have dropped so much it has become difficult to make money in pure generics and so they are going to have to move ahead from it. They are already doing collaborations on a company-to-company basis. University departments are already talking to each other and there is interest in India in buying small UK firms in this space.

Looking at the current volatility in the world, if a pandemic of COVID-19 scale breaks out, will we see the same level of global cooperation?

Yes, there would still be collaboration. Humans are humans at the end of the day and in spite of your trade or geopolitics, a pandemic is about survival of the whole human race. With that mindset, people collaborate deeply and quickly.