UK Chancellor George Osborne is among the many champions of the Indian growth story in the British Cabinet. He is also proud of the fact that he drives around in a Land Rover -owned by Tata Motors and a symbol of healthy India-UK business links. He held bilateral meetings with visiting Indian finance minister P. Chidambaram, followed by the sixth annual India-UK Economic and Financial Dialogue in London.
India Inc. caught up with the Chancellor at 11 Downing Street in the run-up to the dialogue, which covered proposals for a London-listed “feeder fund” for infrastructure projects in India.
What are your views on the state of economic ties between India and the UK.
When David Cameron became Prime Minister, he said he wanted a very strong relationship with India. He didn't name many countries -he only chose India.
The dialogue today is about strengthening Britain and India's economic ties and we already have a very good economic relationship with India. Britain is the third-largest investor in India after Mauritius and Singapore. Britain is the home of 50% of all Indian investment in Europe. We have a very strong relationship but we can still make it stronger, creating more jobs in India and the UK.
What is the key to this strong relationship
I drive around in a Land Rover, which is of course owned by an Indian company. Britain is the most open country in Europe for Indian companies as they can feel at home here. There is a fantastic Indian-origin population who live in Britain, which makes an enormous contribution to the British economy.
We are making it easier to do business and Britain should carry on being the number one destination for Indian companies.
What are some of the challenges in the way of both countries
There are challenges for Britain and India. Too much of Britain's trade has been with the rest of Europe, as 50% of our trade is with Europe and a lot with the US. We don't do enough trade with India and we could do more. And that requires an effort by the British government.
Also, we are asking companies to look at Indian markets and think about investing in India. We already have some very successful British investors in India, like JCB, but it is some of the smaller companies who find it more difficult.
What more can be done to encourage small and medium-sized enterprises
A lot of SME connections between India and Britain have been family connections. I want to help those, as well as the companies who have never done trade and investment with India, to do more. Sometimes, they look at this enormous vibrant country and wonder where they can start.
Tata is helping small firms with advice. Another initiative involves a specific sum of money given to UK Trade and Investment last year to increase the help they give to SMEs. My message would be that if you have a business in Britain and you have wondered about entering the Indian market, now is a great time to try.
What is the progress of the India-EU Free Trade Agreement
I think the Free Trade Agreement will be a real sign that India wants to engage with the rest of the world and that Europe, which has had its own very severe economic problems, is undertaking the reforms necessary. Britain is probably the strongest champion in Europe of the India-EU Free Trade Agreement. I hope and I am reasonably optimistic we can conclude it this year.
Is India's reform agenda on track
When it comes to India, I think Mr Chidambaram has done a great job at telling and showing the world that India is open for business. I think people had some questions a year or two ago but Mr Chidambaram has settled those doubts and the reforms he has proposed -the retail reforms and pension bill, among others -are a real sign of India's commitment to wanting to trade with the world. I think he has single-handedly made a huge contribution and we are honoured that we are able to host him today.
Looking at his policies from the outside, they are the right initiatives. He has done a huge amount to reassure investors. Obviously, we would like to see the reforms completed but a democracy is sometimes a messy business as we know in the UK. I'm absolutely behind Mr Chidambaram's efforts.