Eyeing Indian markets to accelerate economic growth back home, British Prime Minister David Cameron on Thursday pitched for further opening up of financial services and retail sectors by India, saying the move will benefit both the countries.
“Just as we in Britain are a very open economy welcoming investment, you too in India as well. In banking, insurance and retail, there are further opportunities for openness that will benefit both the countries,” Mr. Cameron said at a panel discussion on Indo-U.K. trade here.
He said these kinds of decisions are sometimes difficult to take as they require taking on “vested” interests.
“We are keen to discuss these issues with our Indian friends and colleagues. We have strong financial, insurance and banking services,” he said.
A bill to hike FDI in insurance from the current level of 26 per cent to 49 per cent is pending in Parliament. Another legislation to increase voting rights of foreign entities in private sector banks is also pending.
In the retail sector, India allows 51 per cent FDI in single brand retail sector, but multi-brand retailing is a closed sector for foreign investment.
Mr. Cameron said his country is re-building some of its manufacturing industries, for which investment from India would be welcome.
The British Prime Minister sought India’s help to expand economies in Europe, where some of the countries are facing the sovereign debt crisis.
“We have to work with friends, including India, to bring what we think will be the biggest stimulus to our economies - expanded trade, completion of Doha Round and looking at investment in each other countries,” he said.
Britain is witnessing a sluggish recovery after being hit by global financial meltdown in 2008-09. Faced with spiralling fiscal deficit, the U.K. government has resorted to massive austerity measures. Its economy grew by just 1.1 per cent in the second quarter of 2010 after clocking 0.3 per cent expansion in the previous three months.
Seeking cooperation in Indian education, Mr. Cameron said, “I think we have some of the best universities of the world and I have brought 14 Vice-Chancellors with me. We have one of the strongest science bases in the world and we brought institutions like Welcome Trust with us.”
Explaining further, he said Britain possesses expertise in civil nuclear power. “We are opening conversation with you on that front. We have a very strong defence industry and I am delighted to see the BAE-HAL agreement. I think we bring lots of expertise we can share with you,” he said.
On investment opportunities in his country, Mr. Cameron said, “We have the English language, we have a time zone between America and Asia. We have access to European markets. We have highly trained workforce and as I have said, we are one of the most open and welcoming economies.”
To a query over whether capping immigration will hamper investment from India, Business Secretary Vince Cable said the agreement between coalition partners of the ruling regime in Britain have agreed to form a pact on immigration outside the European Union, but it will not hamper investment from India.
“I don’t think so (when asked if the immigration pact will impact Indian investment). You can be assured that the system we are going to introduce will respect the needs of foreign investors,” he said.