Naina Lal Kidwai is the Country Head of HSBC India and Director of HSBC Asia. In December 2012, she took over as president of the Federation of Indian Chambers of Commerce and Industry -the first woman to head the Indian business organisation in its 85 year history.

India Inc. caught up with one of the country's most prominent female executives during a visit to London to kick-start the FICCI's India Advisory Group, aimed at strengthening the India-UK relationship from an industry-led perspective. She also gave her insights into the broader India growth story, underlining the importance of transparency, clarity and a stable regime.

What is the aim of FICCI's new India Advisory Group

The idea of the advisory group is really to put together some of the best brains that reside in the UK. These are people who have run large businesses, have been investors into India and are currently investors into India. They will then advise those in power here in the UK on what the UK-India trade and industrial relationship could look like.

Likewise, it will help for the Indian government and those of us in India to get exactly the same input. So on both fronts, it is about investment in each other's countries. It is about collaboration, it is about working together and it is about new areas of cooperation.

For example, the new Mumbai-Bangalore corridor, what should it look like; what are the new areas that we could work in the field of design; in education, which has been quite central to the dialogue between the two countries,; can we aid and assist in the internships and the way companies in our two countries engage.

What is the make-up of this group like

It is a cross-sectoral group of 15 -representing various fields such as financial services, real estate, power, banking and creative industries -and is chaired by Vindi Banga, a former Unilever executive board member. The idea is to use their collective wisdom on how to strengthen the ties between India and the UK.

They don't have any personal agenda and they are not pushing the cause of a single company. So it is very much with the interest of the two countries and that relationship is at the core of how we want to tap into their intellectual capability and experience to drive this dialogue and discussion.

Some of the work will be of a much more nitty-gritty nature as well as providing inputs on implementation of ongoing projects. In other cases, it will be for us to initiate new work. For example, in terms of India's defence offset policies and how India could be looking at building a manufacturing base, for not only its own defence procurement but maybe even exports.

Is the India-UK trade relationship on track to meet its goal of doubling figures by 2015

I think what happened over time is our two countries took a lot for granted and often you need to pause to see why it isn't growing the way it should. There's no doubt that the UK has not remained India's major trading partner, and has almost dropped below the top 10 space now.

This suggests that on both sides we have taken our eye off the ball and there is room to reinvent the way we do things. Clearly, the old way is not good enough.

What are some of the new areas of engagement that need attention

Take education, where the UK occupied an aspirational space for Indians. Now competition for the same students is not just with the US, where Indian students are going in droves, but also Australia, Singapore and Hong Kong have all become important destinations. So what needs to change is clearly something that the UK is looking at.

But equally, India needs skills that can grow in the country. So, how can India attract UK institutions into the country We have to look at the way our own rules and laws are written to enable these universities to come in and build our skillset. And the UK has been an important partner in vocational and skills development, which is very critical for the country.

Under the Indian government's National Skills Development Council, FICCI has picked up four verticals that it is running for the government. One is media and entertainment and all aspects within it. So these could be areas where there can be engagement with the UK -where they can provide vocational training or even apprenticeships to build what are very vibrant growth sectors in India and there is an identified shortage. Other areas include food processing, agriculture and the UK as a design centre -everything to do with industrial design and how that twinning can happen between the two countries. Within design, there is also the social entrepreneurship space. There are that many new ideas that can impact the bottom of the pyramid. There is bound to be room to work with UK development agencies in this field as well. SME engagement on both sides is also key.

Indian policy is often perceived as flip-flopping on key issues. What do you think

Policy to some extent evolves around issues. Right now, the Vodafone issue has certainly thrown up the fact that there was retrospective legislation which was attempted. Not all of it had to do with policy. Some of it had to do with the courts as well.

Ultimately, Indian industry is pretty clear we need regimes which are stable, and where retrospective legislation is not the norm. It is very important that industry knows where it stands so that it's not open to interpretation and, within that clarity, people can make their decisions on when to invest and how to invest.

Transparency, clarity and a stable regime are very important for any investment. And I think we will have to continue to demand that because without it all investment stops.

How does FICCI hope to engage on policy matters with the government

Some of the big areas we are looking to support or push government in are the Goods and Service Tax. All FICCI studies are showing that it will add at least two percent to the country's GDP. We believe that by and large, across parties there is an acknowledgment that GST is good for industry, the consumer and good for India as a whole. The only disagreement is on how it is to be implemented but some of these issues need to be resolved.

We will continue to work towards bringing all parties and states onto the same platform because FICCI is not aligned to any party -it only works for the cause of industry and that has to work across political factions, groups and indeed states. We would certainly like to see GST implemented in the next year to 18 months.

The other big thrust for us is to get some of the stuck projects sorted out because they have tied up money. This will impact the non-performing assets of banks and the fact is that we need those projects. Our studies show that if we can get these projects resurrected, we will add one percent to the GDP.

So just GST and unscrambling these stuck projects could give three percent and we'll be back at nine percent growth!

Is overall Indian growth on a sounder footing

Estimates are showing that we have had a very bad period. Are we doing enough to get back to even a 6.5% growth rate I would say that more needs to be done.

There has been a reform agenda and opening up of sectors to foreign direct investment. But those to my mind are steps at the margins. If they bring investment, it is good. But the question is how much investment.

The real critical issue is creating an enabling environment for investment in India. Indian companies need to put money into growth, into capacity addition, into investment.

It is early days, but I have no doubt we are headed in the right direction. But the issue in India is also about speed. We don't have all the time in the world to wait for all this to work. So there is an urgency that needs to be taken into account as well.

Is the Indian banking industry robust enough to tackle this growth

India is still very far from being counted among the countries with the top big banks. Our biggest bank -the State Bank of India -is not even in the top 50.

The Indian banking sector is 70% government-owned today and we are seeing in our budgets that Rs 10-12,000 per annum is being set aside to put capital into these banks. It begs the question that is that what government money should be going into These banks could be raising money in the capital markets as indeed the private sector banks such as ICICI and HDFC do. And they are far better capitalised than our government-owned banks, which lead a hand-to-mouth existence in terms of capital.

I believe the time has come for the Indian government to decide that maybe it is better owning maybe five or six of the big banks and retaining majority shareholding there and let the others be free to raise money from the capital markets as they dilute down their government holding.

All banks in India can be regulated through the Reserve Bank of India policies. I guess it's a philosophical issue. My worry is that if this control remains the way it has and capital begins to become short, the banking sector will not grow as fast as the Indian industry needs.

The fact that Indian companies can borrow offshore eases pressure on the Indian banking system. But we do need a larger banking industry to be able to fund all these companies over time. We need to get a lot more diversity of funding sources.

Your thoughts on why it took 85 years for FICCI to get its first female president

In the process of evolution everything has its time. Unfortunately, it sometimes takes longer than it should. At FICCI, the fact is that it has been quite a big step. Not just the issue of being a woman but really moving from being a founder-owner type of president to a professional manager type of individual as well. So it is quite a big step in terms of opening up and embracing different skill sets. In that sense, this is a bit of an experiment.

I think everything has its time and I'm certainly not going to be one of the last, and that was one of my conditions. So not the immediate one after me, but the one after that will be a woman.

What is your vision for your term

One important milestone to achieve would be for FICCI to be a platform for the way companies, government and civil society engage. All three to meeting on a common platform doesn't happen, which is often why some of the projects get stuck.

I have personally chaired and set up FICCI's Financial Inclusion Committee only five years ago and it's the only such initiative by an industry body. We have a very active CSR centre. We are establishing the Inclusive Governance Council, which again is there to address these issues so that we get a much more balanced view and so that growth is a sustainable growth.

We have also started the Water Mission at FICCI, also looking at sustainable growth through an important resource for industry and society. How we in industry must look at responsible use of water is just one of the areas which will define responsible and sustainable growth for industry.