Mark Garnier , United Kingdom’s Parliamentary Under Secretary of State at the Department for International Trade was in Mumbai recently as part of a delegation to boost trade and investment in India. As the U.K. begins the process of exiting the European Union, Mr. Garnier spoke to The Hindu about bilateral trade in the new political environment. Among the issues discussed in India were new trade agreements, visa control norms, and ease of doing business. Edited excerpts:
In what way will U.K.’s bilateral trade with India change, now that it has begun the Brexit process?
There is lot of media interest on what Brexit means. We had a vigorous debate and a long conversation, and I had chosen to remain. If you strip away the debate, you will come to an agreed economic path. The short-term effect of Brexit could be an unsteady economic period for possibly up to three years, but the long-term outlook is really positive.
We believe collectively that the long-term future is important. And the effort is not half-hearted. There is no such thing as coming out of the single market, but staying back in the Customs Union.
We are exiting completely and embracing the rest of the world. There aren’t many EU trade deals with large economies, including China, the United States and India. We are just about to sign a trade deal with Canada, and it took us eight years. We are a 2 trillion-pound economy, and we have 65 million people. We have lot of ambition. We will continue to make trade deals, including with the EU.
Britain has an existing relationship with the Commonwealth nations. How will you build trade with them, especially India?
The 57 Commonwealth nations are our friends, and India is an incredibly important part. In any case, India is a dear friend. The U.K. is the largest G20 investor in India and India is the second biggest foreign investor in the U.K. Indian firms in the U.K. employ more than 110,000 people; a third of whom are in the automotive sector. We would like to better that relationship.
Then why did you allow the bilateral treaty to lapse last week?
There are lot of these Bilateral Investment Treaties (BITs) with different nations within the EU. The reason it lapsed was that, as a member of EU, certain things have to done by individual countries and certain steps have to taken by the European Commission. The investor protection process is known as a Commission of Competence and is done by the EU. This commission has the job of renegotiating that investment protection with India. Going forward, we will no longer be part of that, and investment protection will be part of our trade negotiations.
An U.K.-India trade agreement will be in place only after you exit the EU, and that will take a couple of years, right?
Yes. When we were in the EU, we are bound by its rules and regulations. One such rule is that no member state can do its their own bilateral trade agreement with another country. After April 1, 2019, we are keen to do new trade deals. We have already instituted a Joint Working Group on trade. We look to create a foundation, and the preparatory work for free-trade talks can commence soon after we exit. I am aware that trade with India is not where it used to be. There is a hiatus, but I don’t think investors should be worried. The job of Government is to facilitate exchanges between businesses and individuals.
But some of the leading U.K. firms such as Vodafone, Cairn India, and BP have had some regulatory issues in India.
We don’t get involved in individual cases; we talk between governments. We regularly speak, and there is a will to resolve them. It has to go through the due process.
Is doing business in India is becoming easier for U.K. investors?
India is making progress in the Ease of Doing Business index. We see conversations within the Indian government in improving these ratings. We are happy to work together on this.
Visas have been a problem area for Indian students and companies. PM Narendra Modi was vocal about this during the U.K. PM’s (Theresa May’s) visit to India. Will the U.K. make the visa regime easier for India?
The reality is, 60% of business visas are issued to Indians. More education visas are issued to Indians than to any other nationality.
Even among tourists, Indians are at the top. We are looking for highly skilled people for businesses in the U.K.
If there was any evidence that India’s proportion in visa applications was shrinking, then there could be a problem. But the truth is, close to two-thirds of all business visas are issued to Indians.
You met Finance Minister Arun Jaitley in New Delhi. What kind of assurances did you get from him on boosting UK-India trade?
The Economic and Financial Dialogue with Finance Minister Jaitley was a formal meeting.
I’m delighted to say that there is a genuine desire of both countries to do more trade. We both recognise the great opportunities. There is a strong, lasting relationship. The level of friendship is positive.
In Mumbai, you met leading industrialists such as Mukesh Ambani, Harsh Goenka, Anand Mahindra, Ajay Piramal, Chanda Kochar, and Adi Godrej. How upbeat are they about making investments in the U.K.?
There is a great deal of enthusiasm, and a positive buzz among Indian businesses entering the U.K., and vice versa.
Can the UK help India raise finances for ‘Make in India’ projects?
The City of London is the world’s biggest financial centre. As governments, we will be introducing people to each other. Indian businesses recognise the innovation and liquidity pool that London offers.
We have an incredibly innovative financial services sector, so banks and issuing houses have created masala bonds.
We have seen big Indian companies raise money, and this is a developing marketplace. From our point of view, we want our friends in India to come to us because we want to keep pushing this innovative financial services sector. We have a fintech conference in Mumbai and the Chancellor (of the Exchequer, as the Finance Minister of the U.K. is called) has a fintech delegation in Mumbai. We want to be on the front foot on this.
