Over the last couple of months, representatives from Ireland, France and Germany have come to India pitching their nations as possible investment destinations for Indian companies, apprehensive of changes in tax and company law in a post Brexit United Kingdom. However, in India to hold discussions on boosting trade and investments, Catherine Raines, Director General of International Trade and Investment of the UK government tells Subhayan Chakraborty that inbound investments from India continue to go up.
How is the UK planning to retain Indian businesses looking to shift base to other nations due to apprehensions about changes in corporation and taxation laws post-Brexit?
An Indian company looking to invest will find that the basket of attributes offered by the UK is unmatched by any other country. So, Ireland may say they have lower taxes. That may be true. But what Ireland hasn’t got is all the attributes. The UK has a tax rate of 19%, lowest in the G7. UK has very rapid setup of business – you can set up within 13 days – whereas the global average is 35. We are 7th in the global ease of doing business ranking. We have a fantastic skill base apart from robust labour laws and flexibilities which are far ahead of France and Germany. We have a fantastic financial sector with very deep and very liquid capital as well as an independent regulatory system. No other country has all of these together.
So there hasn’t been a lull in Indian investments into Britain ?
Last year Indian investments created or safeguarded 11,800 jobs in the UK, which is more than the year before. This happened even though we had the vote to leave the EU. If you look at all investments, we’ve had more projects invested into the UK as compared to any other country within the EU despite the vote. Not only that, the number of investments have gone up by 7 per cent over the previous year.
What is the kind of a trade relation with India that the British government is looking at after a
While we are members of the European Union, we can’t negotiate with anybody. But it’s very clear that what we want is a relation of free trade around the world. The UK and India has 16 billion pounds worth of reciprocal trade so it’s very important for us. And as we leave the EU, we want to make sure that we are thinking about the very best trading relations we can have globally. So, of course we are going to be thinking about what the barriers to trade are between the two countries and how we might remove them in due course.
Will services be a part of any possible free trade agreement with India?
The UK has a very strong services offer. We export a great deal of services around the world and indeed India exports a great deal of services to the UK. In fact, India exports more servcies to the UK than the UK to India. But in the case of any Free Trade Agreement, it would not be possible to say what that might consist of. I would not want to be drawn into that at this stage. But clearly services is a key part of our trading relationship.
There has been a resurgent interest among British businesses to invest in India. What are the focus areas they are eyeing as of right now?
I have been at Invest India today and we have talked about how to collaborate better. As you know, Theresa May led her first ever overseas trade mission to India last year which had 40 companies. In that mission over 1.2 billion pounds worth of business was done. We are committed to Make In India, Digital India and Skill India. Also, we are country partners in Pune, Indore and Amravati for the Smart Cities program where UK firms are being encouraged to invest.
Players from the small and medium industry had shown a lot of interest earlier. Which are the industries they are focussing on ?
A company called Kloudpad in Kochi has invested 350 million pounds worth in high-tech electronics and is investing 50 million pounds worth into a manufacturing facility here. There are many other such companies. One in every 20 jobs in India’s organized private sector is being created by a British company. That shows the commitment Britain has to India. British firms currently employ almost 7,89,000 people. Now while a lot of that is by big companies like BP, Vodafone and HSBC, it is also through smaller ones like Kloudpad.