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India's Chemical Sector Goes Global

Natasha Alperowicz. Chemical Week. New York: May 12-May 19, 2008. Vol. 170, Iss. 15;
pg. 61, 2 pgs
Abstract (Summary)
The huge opportunities for the chemical industry in India were the main theme of the first
annual joint Chemical Week/Indian Chemical Council conference held recently in Mumbai,
which attracted some 250 participants and was preceeded by a CEO roundtable. The Indian
chemical industry has sales of $50 billion/year, excluding refining and fertilizers. Overseas
companies are also eager to establish their own production in India. Several issues need to
be resolved before many more overseas investors put steel in the ground, speakers said.
The government is helping to create several petroleum, chemical, and petrochemical
investment regions, as well as special economic zones, nationwide to stimulate growth.
Indian companies are also becoming active on the M&A scene as they globalize. Overseas
chemical investment by Indian firms totaled $4.4 billion in the last five years, of which
pharma accounted for 52%, chemicals 40%, and agchems 8%.
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Full Text (1886 words)
Copyright Chemical Week Associates May 12-May 19, 2008

[Headnote]
Investors Look for Opportunities in a Huge Market

The huge opportunities for the chemical industry in India were the main theme of the first
annual joint Chemical Week/Indian Chemical Council (ICC; Mumbai) conference held
recently in Mumbai, which attracted some 250 participants and was preceeded by a CEO
roundtable.
"Potential investors are changing their views on India," said Deepak C. Mehta, managing
director at Deepak Nitrite (Pune) and former president and vision committee chairman of
ICC. "Whereas before investors' choice was always China or India, it is now more like China
and India," Mehta says.
Some companies are switching their attention from China to India, executives say. "China
has been under pressure to clean up its environment ahead of this year's Olympics," says
Ravi Kapoor, chairman of ICC Gujarat and managing director at Heubach Colour India
(Vadodara).
"India has become a preferred choice for sourcing dyes," Kapoor says. "India is a global hub
for pharma manufacturing," Jai Hiremath, vice chairman and managing director at Hikal
(Mumbai) says. China has had problems with quality control in the recent past, he adds.
India's $1-trillion economy is the fourth largest and among the fastest growing worldwide. Its
population is more than 1 billion, and its industry is growing 10%/year, says S. Mitra, general
manager/petrochemicals at IndianOil (New Delhi).
The middle class accounts for one-third of the total population. "By 2025, India will have 24
million rich people, equivalent to the present population of Australia, and 400 million urban
middle class, more than the present population of the U.S.," says Kamal P. Nanavaty,
president/crackers and polymers at Reliance Industries.
The Indian chemical industry has sales of $50 billion/year, excluding refining and fertilizers,
says D.P. Misra, director general of ICC. With refining and fertilizers, its sales are $150
billion/year, he says.
In 2006-07, the chemical industry grew 8.9%, says Kumaresh C. Misra, joint secretary at the
Ministry of Chemicals and Fertilizers (New Delhi). Per capita consumption, however, is still
only one-tenth of the world average. The pharmaceutical industry is one of the largest in the
developing world with an average growth rate of more than 10%/year, he says. It ranks
fourth in volume and 14th in value among drug-manufacturing countries and contributes
22% by value to the global generic drugs market, he adds.
The large and youthful Indian population is creating big demand for most products, Mehta
says. "By 2015, demand for paints in India will outstrip that in the U.S.," he says. Demand for
polymers, currently only 4 kg per capita compared with a world average of 24 kg per capita,
is expected to triple by 2012, creating huge opportunities for petchem manufacturers.
India's ethylene and polymer deficits could reach more than 5 million m.t./year and more
than 4 million m.t./year, respectively, by 2011-12, equivalent to five world-scale steam
crackers and 10 polymer plants, according to Indian government estimates. Several, mainly
domestic, producers have embarked on petchem expansions including: Reliance, the
country's largest player; IndianOil; Gail India (New Delhi); oil and Natural Gas Corp. (ONGC;
New Delhi); Hindustan Petroleum Corp. (HPCL; Mumbai); Guru Gobind Singh Refinery
(GGSR; Bhatinda); and Kakinada Refineries (Kakinada).
Most of India's deficit will be covered by imports from the Mideast, where huge new petchem
capacity will start coming onstream by year-end, executives say. The Mideast is ideally
situated to supply India, they say. Russia could also become a source for petchems and
petchem feedstocks, but supplying India is viewed as impractical by Russian executives.
"Except for fertilizers, not much else is moving from Russia to India; logistically it is too far
away," says Dmitry Konov, chairman and CEO of Sibur (Moscow).
Overseas companies are also eager to establish their own production in India. Sabic is
looking for investment opportunities there, chairman Mohamed H. Al Mady says. Total is
mulling a refinery and petchem investment with HPCL at Visakhapatnam, and Mitsubishi
Chemical is raising purified terephthalic acid capacity at Haldia, to 1.3 million m.t./year by
building an 800,000-m.t./year unit. Solvay Advanced Polymers (Alpharetta; GA) completed a
500-m.t./year polyether ether ketone (PEEK) plant recently at Panoli. It is Solvay's first
commercial-scale PEEK unit and is designed for a doubling of capacity. Lanxess is building
an ion exchange resins plant at Jhagadia, and Arkema is contemplating an acrylic acid joint
venture with the Essar Group (Mumbai) at Vadinar.
Several issues need to be resolved before many more overseas investors put steel in the
ground, speakers said. The severe power shortages that currently plague India must be
remedied, and the challenge of retaining qualified manpower needs to be addressed, says
Dipankar Dutta Gupta, president of ICC and managing director of East India Pharmaceutical
Works (Kolkata). The Indian government is focused on improving the country's infrastructure
which, together with its notorious bureaucracy, has long been a deterrent for potential
investors, sources say.
About $515 billion will be spent on infrastructure projects in the next five years, including
$166 billion to fix power shortages, Nanavaty says. "About 30% of the overall total will be
provided by the private sector," he says.
Chemical producers have resorted to building their own power plants. "Our industrial
processes are quite unforgiving if there is a power interruption," says George A. Corbin,
president and CEO of Solvay Advanced Polymers, which has built a power generating unit to
support its plant at Panoli.
Retaining personnel, following the acquisition of Gharda Polymers from Gharda Chemicals
in 2005, was an additional difficulty that Solvay had to address. "We faced an immediate
challenge to stabilize the turnover of personnel, which typically exceeded more than
25%/year," Corbin says. That was put right by applying corrective actions in compensation,
benefits, and organizational factors, he says. Recruiting new staff in India is also a
challenge, he adds. "Competition for talent is intense as India's strong economic growth
creates ever-expanding career opportunities," Corbin says.
Meanwhile, Indian chemical companies are generally unprepared for Europe's Registration,
Evaluation, and Authorisation of Chemicals (Reach) program, which could affect their
business in Europe, speakers said. The Export Promotion Council of India (Mumbai), a
government body, has pledged to cover 50% of the Reach pre-registration costs of small-
and medium-sized enterprises, says D.M. Wakankar, v.p. at Clariant Chemicals India
(Thane), a Clariant subsidiary. "A help desk is being set up in Mumbai, and companies have
started to approach the authorities for funds."
The role of the Indian government has changed from industry "regulator" to "facilitator," since
economic reforms were first introduced in 1991, Mitra says. Customs duties have been
reduced to 2%-7.5%, from 75%-100%, he says. Liberalization of the Indian economy and the
slashing of import duties have forced Indian companies to transform their business models
to become more competitive, have economies of scale, and look beyond India's borders,
Mehta says.
The government is helping to create several petroleum, chemical, and petrochemical
investment regions (PCPIR), as well as special economic zones, nationwide to stimulate
growth. Each PCPIR will have a refinery and petchem complex as its anchor. The
government has identified six potential PCPIRs: Dahej, Gujarat State; Mangalore,
Karnataka; Visakhapatnam, Andra Pradesh; Haldia, West Bengal; Paradeep, Orissa; and
Cuddalore, Tamil Nadu. The regions will have state-of-the-art infrastructure and support, to
boost manufacturing and exports.
IndianOil's planned petchem expansion includes a massive, two-phase investment program
at Paradeep, Mitra says. The first has an onstream target date of 2011-12 and a price tag of
$7 billion-$7.5 billion. It will cover construction of a 15-million m.t./year oil refinery and plants
producing 1.2 million m.t./year of para-xylene; 600,000 m.t./year of styrene; and 700,000
m.t./year of polypropylene (PP). The second phase will require an additional $5 billion
investment and include an ethylene plant with capacity for 1 million m.t.-1.4 million m.t./year
and units producing high-density and linear-low density polyethylene (PE) and PP, Mitra
says.
A group comprising HPCL and Total is considering an integrated refining and petchem
complex at Visakhapatnam.
Meanwhile, Reliance has announced plans for a refinery offgas-fed cracker at Jamnagar,
which will produce 1.8 million m.t./year of ethylene and 300,000 m.t./year of propylene, as
well as three PE units with a combined capacity of 1.5 million m.t./year and an ethylene
glycol plant with capacity for 720,000 m.t./year. The company is doubling refinery capacity at
the site to 60 million m.t./year. Reliance is also expanding PP production there by 1 million
m.t./year, which will raise its overall PP capacity at the site to 2 million m.t./year and lift its
total to 2.8 million m.t./year. Reliance is also planning a 2.6-million m.t./year p-xylene
expansion at Jamnagar, raising the total there to 4.5 million m.t./year.
Mangalore Refinery and Petrochemicals, an ONGC subsidiary, has announced separate
plans to build a 920,000-m.t./year p-xylene plant at Mangalore, possibly in a jv with
Mitsubishi Corp. and Mitsui & Co.
India has one global leader in Reliance, a strong pharma presence, and a "long tail of small-
and medium-sized companies," says Alasdair Nisbet, managing director at Lazard (London).
Emerging market companies, including Indian firms, are starting to overtake established
chemical groups in terms of market capitalization, he says. Reliance ranked eighth in market
value in 2005 and currently, valued at $84 billion, it is in second place, ahead of Formosa
Plastics Group and BASF. Reliance trails Sabic, the runaway leader, which is valued at
approximately $127 billion.
Indian companies are also becoming active on the M&A scene as they globalize, Nisbet
says. Overseas chemical investment by Indian firms totaled $4.4 billion in the last five years,
of which pharma accounted for 52%, chemicals 40%, and agchems 8%. Indian cross-border
M&A deals have been led by pharma acquisitions but petchems will follow soon and
specialties will come later, he says. Industry buyers, including Indian firms, will take up the
running in chemicals M&A as private equity buyers are likely to be restrained by limited
availability of bank credit for the next 18 months, he adds.
"India has in the past had little presence on the world scene, but Reliance, Hikal, the Birla
Group, United Phosphorus, and the Tata Group have transformed that," says D.P. Misra.
Tata Chemicals (Mumbai), a Tata subsidiary, and Reliance have led the way in cross-border
M&A and will continue to do so, Nisbet says. Tata Chemicals, with 2007 sales of $887
million, spent $1.22 billion to acquire soda ash producers Brunner Mond (Northwich, U.K.)
and General Chemical Industrial Products (East Hanover, NJ). The two deals increased
Tata's soda ash capacity to 5.4 million m.t./year, making it the world's second-largest
producer behind Solvay. Tata is also planning to build a soda ash plant in Saudi Arabia, says
R. Mukundan, executive v.p. at Tata Chemicals.
Reliance's acquisitions abroad have been smaller. It acquired Trevira (Frankfurt), the former
polyester business of Hoechst, in 2004, and bought Hualon (Kuala Lumpur), another
polyester business, last year. Reliance came close to buying Innovene, a major petchem
business, from BP in 2005. Ineos eventually bought Innovene. Reliance is eager to expand
further overseas and signed a global petchem cooperation deal with Gail last year. The
partners will explore opportunities to establish petchem complexes in feedstock-rich
countries outside India.
http://www.hcilondon.net/business-with-india/india-uk-economic-relations.html

• Overview
• High-level Exchanges
• Bilateral Trade
• Information Technology
• Biotechnology and Healthcare
• Investment
• Science & Technology
• Indian Community in the UK

Overview

1. Relations between India and the United Kingdom encompass a wide range of political,
economic, cultural and other dimensions. The intense and regular political dialogue at all
levels has been spearheaded by an unprecedented four Prime Ministerial meetings in a
space of twelve months, between October 2001 and October 2002.

2. UK has firmly emerged as India's second largest trading partner after the USA, and the
largest in Europe. Trade has grown steadily since the Indo-British Partnership was formed in
1993, and has been particularly impressive in 2003. Business and industry linkages have
also grown significantly. While UK remains the largest cumulative investor in India, recent
years have also seen a surge of investments into the UK from India, particularly in the IT
sector. India is now the second largest investor in the UK from Asia in terms of number of
projects, and the eight largest overall.

3. The 'Delhi Declaration' signed by the two Prime Ministers on 6th January 2002 focuses,
inter alia, on matters pertaining to bilateral trade and economic relations also. As mandated
in this Declaration, the Confederation of Indian Industry (CII) and the Confederation of British
Industry (CBI) held a Summit in London in July 2002, which brought together a wide cross-
section of companies at the highest level of business representatives. A 10-point plan of
recommendations emerged from this Summit, the principal aim of which is to double the
Indo-UK bilateral trade by 2007 and strengthen the environment for foreign direct
investment.
High-level Exchanges

4. A string of high-level visits over the past few years from both sides, focussed on economic
and commercial matters, have also spurred bilateral interactions and economic linkages.
Meetings of the India-UK Round Table have provided valuable inputs and recommendations.
The India-UK Joint Working Group on Science & Technology held its fourth meeting in New
Delhi in March 2004. Several Indian State governments and sector-specific industry
delegations have also held extensive meetings and road shows in the UK. Business
delegations from Northern Ireland now travel to India every year, as also business
delegations from Wales.

Calendar of Events 2002


Calendar of Events 2003
Calendar of Events 2004
Calendar of Events 2005
Calendar of Events 2006
Calendar of Events 2007
Calendar of Events 2008

5. The India-UK Round Table, a non-governmental body set up in 2000 to make


recommendations on development of bilateral relations in all spheres, held its 6th Meeting
under the Co-Chairmanship of Shri K. C. Pant and Lord Paul in London from 7-9 May 2003.
The 7th Meeting was held in Kolkata on 10 January 2004.

Bilateral Trade

6. The UK continues to be India's second largest trading partner after the USA, and the
largest in Europe. By 2000, India-UK trade in goods and services was almost £5 billion, with
trade in goods totalling £3.7 billion. On account of the slowdown in the global economy, total
trade in the following two years stagnated, mainly because of a fall in British exports.

7. Trade performance in 2003 has been impressive, with a strong increase of 30.6% in UK's
exports to India, totalling £2.291 billion and reversing the two-year decline. India's exports to
the UK also grew to £2.076 billion, an increase of 15.8%. Both figures are the highest-ever in
bilateral goods trade, and the total of £4.367 billion is a 23.1% increase over 2002. This is
significant, especially considering that UK's overall increase in export of goods in 2003 was
only 0.7%, and expansion in goods imports was less than 0.5%. It also means that exports
of goods to India now account for 1.22% of UK's total, compared to only 0.94% in 2002, and
India has gone up one place to become UK's 15th most important export market. India's
share in UK's total import of goods has also gone up to 0.89%, as against 0.77% in 2002.

Bilateral Merchandise Trade (in £ million)


CalendarYear UK's Exports to UK's Imports from Total India's Balance of
India India Trade Trade
1999 1450 1426 2876 -24
2000 2058 1651 3709 -407
2001 1797 1824 3621 +27
2002 1754 1793 3547 +39
2003 2291 2076 4367 -215

Source: UK Office of
National Statistics

8. UK's main imports from India are: textiles and readymade garments, gems and jewellery,
footwear, leather and leather goods, engineering goods, metal manufactures, power
generating equipment, software services, pharmaceuticals, chemicals, marine products, rice,
tea and other agricultural products like nuts and preserved fruits and vegetables. India's
imports from the UK include: non-ferrous metals, gold, rough diamonds, power generating
and telecom equipment, transport equipment, industrial machinery and chemicals.

9. Among the sectors that have been identified for focus in the sphere of bilateral trade are:-
i) Goods - engineering goods, textiles, gems and jewellery, natural stone, marine products,
chemicals, rice, processed foods, alcoholic beverages, non-GM produce like soya, and
pharmaceuticals including complementary medicine; and ii) Services - software,
biotechnology (R&D, information exchange and product development), healthcare and
media.

Information Technology
10. The United Kingdom and India have emerged as major partner countries for each other
in the Information Technology sector. UK companies realise the benefits of outsourcing to
India, which has become the preferred global hub for software development and Business
Process Outsourcing. Tie-ups between the UK and Indian IT enterprises lend the former
substantial benefits not only in terms of lower costs but also in the quality and speed of
marketing as well as establishing platforms for building new businesses. A large number of
Indian IT companies have substantial operations in the UK. There have also often been skill
shortages in the UK and Europe in the IT sector, which are filled to a substantial extent by
Indian professionals. There are some fears of job losses on account of outsourcing to India,
but the reality is that the UK economy is growing strongly and the employment situation,
including in call centres, has never been better.

11. NASSCOM opened its UK Chapter in September 2003, the first such overseas. It also
has a Memorandum of Understanding with its British counterpart trade association Intellect,
and also with the Welsh Development Agency, which has now been a Platinum Sponsor of
NASSCOM's Annual Conference for many years. In association with the Financial Times,
NASSCOM also holds a prestigious annual conference in London on Outsourcing to India.

Biotechnology and Healthcare

12. Biotechnology has been identified as one of the main areas for enhanced cooperation.
Leading Indian biotechnology companies are collaborating with clients across the UK and
Europe. Astra Zeneca has established an R&D Centre in Bangalore. GlaxoSmithKline and
Ranbaxy have signed an agreement for joint research and development. Industry
delegations from both countries have visited each other regularly.

13. Healthcare is another potential area of cooperation. India already supplies doctors and
nurses in substantial numbers for UK's National Health Service. Indian pharmaceutical
companies also market their products and have even invested in production facilities in the
UK. UK is also a source for medical equipment. The Indian Healthcare Federation
comprising top Indian private sector healthcare organisations and super-speciality hospitals
visited the UK in September 2003 to explore potential partnerships and opportunities.

Investment

FDI from the UK


14. The United Kingdom continues to be the largest cumulative investor in India, and the
third largest investor post-1991. Since 1993, almost 1800 new joint ventures / foreign
collaborations between Indian and UK companies have been approved, at the rate of
roughly 200 every year. British investment approved by India in 2002 was $375.9 million,
well below the $1.11 billion in 2001. Approved FDI in 2003 reduced further, but actual inflows
in this period increased substantially. Some major UK insurance companies commenced
their operations in India in 2002. Leading British oil and gas companies, including British
Gas, Shell and Cairns Energy, have announced plans to expand their operations and
increase their investments in India. An increasing number of British companies are moving to
India for setting up IteS/BPO operations.

FDI from India

15. There has also been a surge of investments into the UK from India, which has moved
into the top ten investors bracket (8th largest) in the UK in terms of number of projects, and
the 2nd largest from Asia, creating a number of local jobs. Reliance Infocomm's $207 million
acquisition of Flag Telecom and Wockhardt's £10.85 million acquisition of CP
Pharmaceuticals were the two largest Indian investments in 2003. A majority of the other
investments continue to be in the IT sector, including in an FDI pilot project in Wales which
specifically sought to attract Indian companies.

16. To date, over 450 Indian companies have established resident presence in the UK, out of
which more than 75% are in the IT sector. The High Commission has consciously
encouraged this trend. An "India Business Group" (IBG) comprising all Indian companies
in the UK, created by the Indian High Commission in December 1999, holds meetings in the
High Commission on a regular basis. It brings together senior executives and professionals
of Indian companies in the UK, as also leading consultants and solicitors from British firms
who advise clients on doing business in India and the UK. The interactive IBG meetings
discuss business-related developments, as also problems, ideas and suggestions on how to
improve trade, investment and business links between India and the UK. In December 2002,
three sectoral core groups were created for focussed targeting, one each on IT,
Pharmaceuticals, Biotechnology & Healthcare, and Infrastructure & Finance.

Science & Technology

17. India and the UK have a long tradition of scientific links, and there are several on-going
joint projects between scientists and institutes. There is an India-UK Joint Working Group on
S&T, headed by Secretary (S&T) on the Indian side and the Chief Scientific Adviser to the
British Government (Prof. Sir David King), which has held four meetings so far, the last being
in New Delhi on 18 March 2004. The third meeting in London in July 2002 had led to an
agreement to set up a joint Networking Fund, with an equal contribution from both sides. The
operation of this Fund follows a 'bottom up' and 'blue skies' approach to collaborative
proposals in order to eliminate constraints.

18. Several top British scientists have visited India regularly. The Royal Society, UK's
premier scientific academy, celebrated an 'India Day' in London on 11 December 2002. This
first-ever India Day was a showcase event celebrating the scientific links between the UK
and India. There are long-standing links between the Royal Society and India. The first
Indian Fellow of the Royal Society was elected in 1841, and the total number so far, which
includes almost all the greatest Indian scientific luminaries and Nobel Prize winners, is 30. In
1972, an agreement was established between the Royal Society and the Indian National
Science Academy. Since then, over 400 British scientists have visited India and 500 Indian
scientists have visited the UK.

Indian Community in the UK

19. Bilateral trade and economic relations are doubtlessly facilitated by the presence of
about 1.2 million strong Indian community in the UK, which represents the single largest
ethnic segment of the country's population (1.5%). Contribution of NRIs in the UK has been
notable from the economic point of view, especially in the fields of industry, medicine,
accountancy, law, management, financial services and food. 40% of the pharmaceutical
trade of the UK is run by Indians who are also the mainstay of several other retail trades in
the country. Some figures are pertinent here - the 'curry industry' in Britain, that includes
Indian restaurants and the ancillary food industry, employs more people than shipbuilding,
steel and coal mining put together. Out of every pound spent on food in the UK, 30 pence is
spent on curry.

http://www.economywatch.com/world_economy/united-kingdom/indo-uk-trade-relation.html

India was a British colony for over 200 years till it achieved independence from the
United Kingdom on August 15, 1947. India and UK's trade relations have undergone a
massive change from the colonial period. Once perceived as a less developed country,
India had transformed itself into the fastest growing economies of the world currently. It
is not hidden that India is world's fourth largest economy in purchasing power parity
terms and UK is the 4th in GDP dollar terms.

TRADE
UK, which remained at second position in India's leading trade partner till 2002, has
become India's fifth leading partner last year. Countries like china, UAE and Belgium
have taken 2nd, 3rd and 4th position resp.
India exports to UK are textiles and readymade garments, gems and jewellery, footwear,
leather and leather goods, engineering goods, metal manufactures, power generating
equipment, software services, pharmaceuticals, chemicals, marine products, rice, tea
and other agricultural products like nuts and preserved fruits and vegetables.

India's imports from the UK include: non-ferrous metals, gold, rough diamonds, power
generating and telecom equipment, transport equipment, industrial machinery and chemicals.
Looking from UK's perspective, India was UK's 15th largest export market, and the UK's
largest exporting market in the developing world (ahead of China). Among the countries
where bulk of UK's import come from, partners, India is the 25th largest exporter to the UK.

INVESTMENT
UK is ranked at number 5 in the total FDI inflows to India. However, the FDI amount has
declined in the last 2 years from 366 US $ million in 2000-01 to 167 US $ million in 2003-04.
Top sectors for UK FDI to India are currently power and oil and gas, telecom, and service
industries. Keen to see more cooperation in biotech, healthcare, pharmaceuticals, automotive
and other ICT and hi-tech areas. UK is committed to attracting even more high-quality Indian
companies in the knowledge-based sectors to set-up in Britain.

Recent years have also seen a surge of investments into the UK from India, particularly in the
IT sector. India is now the second largest investor in the UK from Asia in terms of number of
projects, and the eight largest overall. The number of Indian businesses investing in the UK
has increased by a dramatic 47% in 2003-4 over the previous year. According to the Figures
published by UK Trade & Investment, 28 new companies from India invested in the UK in
2003-2004, bringing the total number of Indian companies in the UK to 480. Of this 338 are
from the Information and Communications Technology (ICT) Sector. They include flagships for
Indian ICT such as Tata Consultancy Services (TCS) and Wipro. Reliance Infocomm's $207
million acquisition of Flag Telecom and Wockhardt's £10.85 million acquisition of CP
Pharmaceuticals were among the two largest Indian investments in 2003. But a majority of
the other investments continue to be in the IT sector.

Additionally, leading Indian biotechnology companies are collaborating with clients across the
UK and Europe. Astra Zeneca has established an R&D Centre in Bangalore. GlaxoSmithKline
and Ranbaxy have signed an agreement for joint research and development. Industry
delegations from both countries have visited each other regularly.

Similarly, leading British oil and gas companies, including British Gas, Shell and Cairns
Energy, have announced plans to expand their operations and increase their investments in
India. An increasing number of British companies are moving to India for setting up IT and
BPO operations.

UK presence in India is best noticed when we talk about the Information Technology sector in
India. India, which has become the preferred global hub for software development and
Business Process Outsourcing, has attracted attention from many UK companies. While there
are fears of job losses on account of outsourcing to India, the reality is that the UK economy
is growing strongly and the employment situation, including in call centres, has never been
better.

OTHER ECONOMIC LINKAGES

Besides, trade and investment, UK's department for international development (DFID)
supports the Government of India in its efforts to achieve the poverty reduction
objectives of the Government of India's Tenth Plan and the internationally agreed
Millennium Development Goals (MDG's). DFID's spending in India for the financial year
2005/06 is expected to be £280 million. The institution aims to develop strategic
programme at the national level as well as supporting programmes in its four partner
states: Andhra Pradesh, Madhya Pradesh, Orissa and West Bengal. 45% of DFID's total
assistance to India was disbursed through national programmes. These national
programmes include the District Primary Education Programme (DPEP), health
interventions (AIDS, TB, Polio) and direct financial support to the activities of several
partner agencies, including the ADB, World Bank and number of UN organisations.

Trade and investment ties have been continuously strengthened by several bilateral
interactions between the two countries. One such linkage is the India-UK Round
Table, a non-governmental body set up in 2000 to make recommendations on
development of bilateral relations in all spheres. The 7th Meeting was held in
Kolkata on January 10, 2004.

Last year August, an agreement was signed between India and UK named as "The
Prime Ministers' Initiative,"set out a new strategic partnership between the UK and
India, which among other areas like education, culture foreign and Defence Policy,
aims to strengthen bilateral economic and trade issues between the two nations.

http://www.indiaonestop.com/tradepartners/uk/ukoverview.html
"It is in the interest of the world "I believe there is a prize for all
economy and politics that in an of us in a confident 21st century
increasingly interdependent India, working with a confident
world, international institutions 21st century Britain in a
should be representative of partnership of equals and an
contemporary realities. … We alliance that is founded on
can’t deal with global problems shared values. The world’s
unless India is at the global high largest democracy and one of
table". the world's oldest democracies
cooperating together".

Manmohan Singh Gordon Brown

UK: India's partner of choice


"India and Britain can have a shaping influence for both progress and justice in the emerging global
economy. And we will do that if we think boldly about opportunities that are ahead", said British Prime
Minister Gordon Brown on the first day of his visit to India on January 21 this year "I believe there is a prize
for all of us in a confident 21st century India, working with a confident 21st century Britain in a partnership of
equals and an alliance that is founded on shared values. The world’s largest democracy and one of the world's
oldest democracies cooperating together", he asserted. This not first time Brown expressed his strong
confidence in building up a stronger bilateral relations between the two countries. Exactly a year back, as the
then Chancellor of the Exchequer, Brown told the captains of Indian industry that "India is one of the
engines of world growth. I believe Britain must be a full participant and indeed your partner of choice".
Brown’s announcement at the joint Press conference with Indian Prime Minister Manmohan Singh that his
country supports “the membership of India in the UNSC and reforms of the Security Council for the future”
assumes immense significance when India is hard pressing for UNSC seat. “We have agreed that it is in the
interest of both our countries and the world that international institutions should be reformed for the modern
era. They need to be equipped to deal with the challenges of the 21st century and to ensure that there are
more representatives of the new global order,” he said.
“We don’t underestimate the difficulties that lie in reforming global institutions. It is an essay in persuasion,”
said Indian Prime Minister. “It is in the interest of the world economy and politics that in an increasingly
interdependent world, international institutions should be representative of contemporary realities. … We can’t
deal with global problems unless India is at the global high table,” Singh said.
The UK will invest another £825 million for development in India over the next three years. Brown announced
the funding during his India visit. Of that, up to £500 million is expected be spent on health and education.
This will help provide 300,000 more teachers and another 300,000 classrooms --- ensuring that in total by
2011, 4 million more children – half of them girls – will be able to go to school.

"Over the last few years, India has made great progress in tackling poverty and sustaining economic
development. But some grave challenges remain. The UK is keen to play its part and work in partnership with
India to fight poverty. That is why I am pleased to announce this substantial package of support to help make
a better future for India’s poorest", Brown said.
The UK’s Secretary of State for International Development, Douglas Alexander, said: "Without India getting on
track, the world will fail to meet the Millennium Development Goals. That is why the UK contribution - which
accounts for 1/3 of all aid to India - is welcomed. Past UK support has helped to raise primary school
enrolment rates to 94 per cent and provided water and sanitation for 10 million slum dwellers. The £825m
contribution will continue to benefit India's poorest by improving health (including under nutrition) and
education for all." Though parts of India are booming, the levels of child malnutrition in India are nearly twice
as high as the average for all of sub Saharan Africa. India is home to one third of the world’s poor. Up to 400
million people live on under a dollar a day".
Winds of change is blowing. Today, UK, the gateway to European Union single market, is a long and stable
trade partner ranking second in India’s global trade partnership after the US and third in terms of foreign direct
investment in India. “We consider UK as one of the most important source of FDI for India not only amongst
the EU countries but also vis-à-vis other countries in the world. With a share of 37 percent in EU’s total outflow
of FDI in non-EU countries, I think UK is a very natural and important partner for a country like India that
requires massive investment for its infrastructural needs”, said Indian Commerce Minister Kamal Nath at the
India UK Round Table on this January 21The Indo-British Partnership (IBP) programme launched in 1993 is
considered as the corner-stone in shaping up the current Indo-UK trade pattern and in providing added
momentum to the bilateral trade between these two countries. The Indo-British Partnership was started in
1993 by the then Indian and British Prime Ministers P V Narsimha Rao and Sir John Major respectively. The
economic reforms initiated by the Indian government in 1991 and recovery of the British economy had opened
up countless opportunities for Indo-British collaboration.
On the trade front, the bilateral trade has increased to 100 per cent in the last five years and it is increasing at
a rate 20 per cent per year. UK is the 4th largest trading partner of India with bilateral trade of US $ 9.8 billion
in 2006-07, which is about 3 per cent of India’s total trade. Percentages of bilateral trade compared to total
trading basket of UK (US $ 1 trillion in 2006) are negligible. This again indicates an immense potential existing
between the two countries.
UK is India’s largest trading partner in Europe with 6.4 percent market share. The India-UK bilateral trade in
the first 8 months of 2007 was up 13.2 percent over the comparable period of 2006. The total bilateral trade in
goods has grown from £3.58 billion in 2001 to £5.83 bn in 2006 with UK being the second largest importer of
Indian goods after US. The total trade in goods and services in last five years (2002-2006) grew 0ver 75
percent to £ 8.74 bn in 2005 from £ 4.99 bn in 2002. With the presence of more than 350 Indian companies,
India is the eighth largest investor in the UK in terms of number of projects. Of this, 275 firms are from
Information and Communications Technology. UK ranks third in terms of foreign investments in India after
Mauritius and the US.

UK's Trade with India (2007)


(In £ million)

2007 (Jan.-
Total 2001 2002 2003 2004 2005 2006
Aug.)
Exports of 2798 2695 1900
1772 1755 2284 2235
goods
Imports of 2783 3136 2502
1816 1804 2093 2290
goods
Total Trade in 5581 5831 4402
3588 3559 4377 4525
Goods

Source: DTI Economics & Statistics Directorate, UK

UK in the third largest investor in India , after Mauritius and the US, for the first four month of Indian fiscal
year ( April-March) of 2007-08.The actual inflow of investment from the UK in 2006 stood at Rs 7824.7 crore
compared with Rs 1284 cr in 2001.This marked growth was mainly due to Rs 6663.23 cr investment by Cairn
Energy. The UK investment (actual flow) in India in 2006 was 15.5 percent of total foreign investment (actual)
in India in 2006. FDI inflows during the first quarter of fiscal 2007-08 were $ 4.9 billion, a growth of more than
185 percent, as against $ 1.7 billion received during the corresponding quarter of fiscal 2006-07. Services,
telecom, electrical equipment, real estate and transportation were the 5 major sectors which received most FDI
in 2007-08. Actual flow of FDI into India from the UK during the first three months of 2007 stood at Rs 863.83
crore which is 6.1 percent of India's total FDI inflow during this period. I
“UKIBC ( UK India Business Council ) will bring focus to the UK’s engagement with India and greatly enhance bilateral trade and
investment between our two great nations. Through the facilitation of partnerships, and with the support of an extensive network of
influential corporate and individual members, UKIBC will provide the resource, knowledge and infrastructure vital for UK companies
to make the most of the business opportunities in India, and for Indian companies to invest in the UK.” --Sharon Bamford, Chief
Executive, UKIBC

In terms of technology collaboration, the UK ranks fourth after the US, Germany and Japan. From August 1991
to March 2007, the number of technical collaborations approved from UK stands at 855 which is 10.90 percent
of the total technology transfer approvals.

INDIA-UK SUMMIT - JOINT STATEMENT


1. The India-UK annual Summit was held in Delhi on January 21, 2008. The delegation from the United Kingdom was led by Prime Minister Rt.
Hon. Gordon Brown MP and that from India was led by Prime Minister Dr Manmohan Singh.

India-UK Strategic Partnership

2. India and the UK share a Strategic Partnership. The two Sides underscored their commitment to the Strategic Partnership launched in 2004 and
reaffirmed their shared conviction in the values of democracy, fundamental freedoms, pluralism, rule of law, respect for human rights and
multilateralism in the international political and financial architecture as the means to tackle global challenges effectively. The close bilateral
relationship has already led to growing cooperation in global affairs and substantial expansion in the bilateral engagement in multiple fields.
Building on the achievements of the ‘New Delhi Declaration’ (2002) and ‘India-UK Joint Declaration’ (2004), the two Sides commit themselves to
strengthening and deepening the comprehensive Strategic Partnership that exists between the two countries, which is underpinned by growing
economic ties and the presence of a large Indian Diaspora in the UK.

Economic & Commercial

3. Bilateral economic linkages are strengthening through increased trade and investment flows. The UK is the third largest cumulative investor in
India. India has emerged as one of the largest investors in the UK, including several major acquisitions, reflecting the maturing nature of the
bilateral economic partnership. The UK is among India’s important global trading partners. The two Sides acknowledged the potential for greater
collaboration especially in hi-tech (ICT, life sciences, nano-technology etc.), research, advanced manufacturing, infrastructure, energy, healthcare,
agricultural products and processed foods, higher education and other service sectors.

4. Both sides took note of the outcome of the 4th meeting of the India-UK Joint Economic and Trade Committee (JETCO) held in London on 13
December 2007. This meeting reviewed various aspects of bilateral trade and received valuable feedback from businesses on both sides on
measures that could further enhance bilateral trade and investment flows. India and the United Kingdom agreed to cooperate in developing
collaboration between Small and Medium Enterprises (SMEs), entrepreneurs and venture capitalists. The Prime Ministers welcomed the meeting of
a CEOs’ Round Table and Entrepreneurs’ Summit of Indian and UK business leaders in Delhi. In the light of the rapidly growing trade and economic
relations and the rapidly evolving pattern of international competitive advantage, both governments acknowledged the considerable potential for
bilateral trade, investment and services. They noted the importance of improving market access through liberalization and facilitating movement
of professionals across a broad range of sectors of interest to both sides.

5. Both sides took note of the large opportunities in the infrastructure sector, in the context of the massive infrastructure development programme
being undertaken in India. Facilitating the flow of information on the infrastructure projects being undertaken would encourage business
partnerships. Both sides agreed to take forward proposals for the establishment of a capacity building programme in India for public-private
partnership in infrastructure with UK support.

6. India and the United Kingdom noted the role played by people of Indian origin in Britain. Through their hard work, dynamism and
entrepreneurial talents they have made an enormous contribution to the strengthening of bilateral ties.

Education

7. The two Sides noted the traditionally close ties between the two knowledge societies in the field of Higher Education. They recognised that the
UK-India Education & Research Initiative (UKIERI), launched in April 2006, was playing an important role in fostering such contacts. They further
noted the huge expansion planned in the Indian Higher Education sector which would increase the gross enrolment ratio by 5 percentage points
and include the establishment of a range of central government institutions of excellence including 8 new Indian Institutes of Technology (IITs), 7
new Indian Institutes of Management (IIMs), 5 Indian Institutes of Science Education and Research and 30 new Central Universities. It was agreed
that both sides would forge a closer partnership in the field of Higher Education, for further developing education and skills to the mutual
advantage of the students and faculty of both countries. While exploring new avenues of collaboration to further deepen the cooperation, the two
Sides agreed to initiate specific measures to collaborate in the field of higher education. In particular they agreed: to establish an Education Forum
to work towards an early conclusion of an Education Partnership Agreement; to enter into a Memorandum of Understanding on an India-UK Higher
Education Leadership Development Programme to develop leadership skills in Indian and UK universities; to establish a Programme, under
UKIERI, to support faculty development in key Indian universities with participation of leading UK academics; to develop further student and
faculty exchange programmes and partnerships with a commitment of further funding from the UK government; and to promote pro-actively links
between British Universities and the premier educational institutions in India including collaborating for the establishment of at least one new
Indian Institute of Technology, one new Indian Institute of Science Education and Research and one Central University proposed in the XI Five Year
Plan. The latter would be taken forward through a meeting between a British delegation, including Vice Chancellors and their Indian counterparts
later in the year. They further agreed to work towards mutual recognition of degrees, diplomas and other academic qualifications supported
through greater co-operation between the relevant UK and Indian authorities. The two Sides agreed to the further development of UK/India
collaboration on English Language Training. The two Governments recognize the strong interest of higher educational institutions of both countries
to work together to further their global educational objectives.

Research, Science & Technology

8. India and the UK see considerable potential for growth in Research, Science and Technology collaboration. They share the vision for further
strengthening their partnership through new and existing initiatives and agree to widen discussion to all research funding bodies in both countries
through the India-UK Science and Innovation Council mechanism. The UK’s proposal to establish a Research Councils UK (RCUK) office in India is
a welcome development that would lead to enhanced collaboration between the two countries. Underlining the importance for further developing
Research and S&T cooperation, India and the UK shall establish a Science Bridges Initiative to build institution to institution relationships on equal
partnership with joint funding under the principle of parity. RCUK will contribute £ 4 million with a matching grant from Department of Science and
Technology (DST) India to promote this initiative. The UK and India also agree to support a further round of UKIERI awards designed to establish
networking links between Indian and UK education and research institutions with the UK committing £ 2 million over 3 years and DST agreeing to
match this funding on a parity basis. DST and the Engineering & Physical Sciences Research Council (EPSRC) UK also agreed to collaborate on the
initial phase of development of major projects in select research areas.

Civil Nuclear Cooperation

9. The two Sides strongly emphasised the potential of civil nuclear energy to be a safe, sustainable and non-polluting source of energy, which
could make a significant contribution to meeting the global challenge of achieving energy security, sustainable development, economic growth,
and limiting climate change. The UK supports the India-US civil nuclear co-operation initiative with all its elements, including an appropriate India
specific exemption to the Nuclear Suppliers Group Guidelines. As two countries with advanced nuclear technology, India and the UK agree to
promote co-operation in civil nuclear energy and will work expeditiously towards a bilateral agreement for this purpose, in line with their strong
commitment to non-proliferation. The two Sides will also continue to encourage their scientists to develop closer links and to co-operate in
research in this field. The two Sides also welcome the opportunity for their scientists to work together in the context of ITER.

Climate Change

10. India and the UK recognise the need to find effective and practical solutions to address concerns regarding climate change and its implications
for human kind. These would include mitigation and adaptation strategies in a manner that supports further economic and social development in
particular of developing countries. Long-term convergence of per capita emission rates is an important and equitable principle that should be
seriously considered in the context of international climate change negotiations. They expressed satisfaction over the successful outcome at Bali
that reaffirmed the relevance of the United Nations Framework Convention on Climate Change (UNFCCC), including its provision and principles, in
particular the principle of common but differentiated responsibilities and respective capabilities. The process established under the Bali Road Map
should aim for enhanced implementation of the UNFCCC and give due weight to issues of concern to developing countries, in particular those
relating to addressing adaptation, technology, and financing arrangements. In the field of bilateral cooperation on climate change, the two Sides
expressed satisfaction over the announcement of a UK-India Agreement on the second phase of UK-India Climate Change Impacts and Adaptation
Study. The UK and India are convinced that development of the international carbon market is important for the future and wish to explore new
approaches to market related investment that offer the potential to drive technology transfer. The two Sides shall work towards the success of the
second Phase of a project aimed at identifying the barriers to low carbon technology transfer. They will also collaborate on a project piloting
implementation of programmatic CDM in India this year to jointly explore the potential of this to facilitate up-scaling of carbon market investment
in accordance with India’s future development priorities. Both sides recognised the importance of Research and Development collaboration on low
carbon energy technologies and welcomed the broadening dialogue between the two countries on clean coal technologies and other power
generation technologies.

MDGs

11. The two Sides agreed that an urgent global effort is required to meet the MDGs. India and the UK agreed to enhance efforts to achieve the
MDGs and reduce global poverty. The two parties launched a new Partnership to Achieve the MDGs Globally. The two countries committed to
harness their combined knowledge, experience and resources towards this goal including through third country cooperation. India and the UK will
start by scoping opportunities to collaborate in third countries where both parties have a development interest. India and the UK would jointly
consider ways and means to reform the international institutions. While noting the establishment of the mechanism for this purpose under the
Commonwealth at the Kampala CHOGM 2007, the two Prime Ministers agreed that India and the UK should exchange views bilaterally on this
important agenda. They agreed the importance of continued exchange of experiences and future cooperation on international policies on major
global public goods that impact on the global achievement of the MDGs.

WTO

12. India and the UK strongly support an early, fair and ambitious outcome of the Doha Round of multilateral trade negotiations. A successful
conclusion of the Doha Agenda must focus on the development dimension. Existing differences amongst members have to be overcome for the
benefit of all. Close cooperation between India and the UK will make a significant contribution to achieve a balanced and comprehensive
agreement.

India-EU

13. India and the UK noted with satisfaction the growing partnership between India and the EU. They welcomed the progress made in the
negotiations between India and the EU for a broad-based Trade and Investment Agreement and expressed their commitment for an early and
mutually beneficial conclusion of the negotiations for such an agreement. They noted with satisfaction the success of the 8th India-EU Summit
held in New Delhi on November 30, 2007.

International
14. The two Sides discussed a range of other international issues, and agreed on the importance of more representative and effective international
institutions to address global challenges. The two Sides agreed that a reformed UN Security Council that better reflected the realities of the 21st
century would enhance global cooperation and security. The UK reaffirmed its firm support for India’s candidature for a permanent membership in
an expanded UNSC.

15. They reaffirmed their sustained commitment to supporting the Afghan government in the stabilisation and rebuilding of Afghanistan, and
reiterated the importance of coherent international efforts to address the development needs of Afghanistan. They urged Iran to co-operate fully
with the IAEA and fulfil the requirements of the relevant UN Security Council resolutions, to address international concerns about its nuclear
programme. In this regard, they underlined the importance of continued dialogue with Iran. The leaders emphasised the urgent need for a
comprehensive, just and durable peace in the Middle East/West Asia. They reaffirmed their support for a negotiated settlement of the Israeli-
Palestinian conflict based on existing agreements, including relevant UNSC Resolutions, the Roadmap, and the Arab League Resolution (Beirut
2002), and urged the parties to work toward this end. The UK and India are committed to contributing to peace and prosperity in Africa. They
reiterated their firm belief in the New Partnership for Africa’s Development, a key framework for socio-economic development. Both sides
recognised the importance of enhancing efforts to support peace and security in Africa, and the UK paid particular tribute to India’s contribution to
UN Peace Keeping Operations. India and the UK will work with international partners to support implementation of the Comprehensive Peace
Agreement between North and South Sudan. They will support AU-UN efforts to reach a lasting political settlement for Darfur, underpinned by an
effective peacekeeping force. They called on all parties to the conflict to immediately cease all hostilities and commit themselves to a sustained
and permanent ceasefire.

16. The two Sides shared the hope that Pakistan would see an early return to stability and prosperity and recognised the importance of free and
fair Parliamentary elections on 18 February. They agreed that the process of national reconciliation and political reform in Burma/Myanmar should
be inclusive, broad-based and taken forward expeditiously, so as to bring about genuine reconciliation and progress towards democracy. They
expressed their strong support for the ongoing good offices of the UN Secretary General’s Special Envoy, and their shared hope that he be able to
visit Burma/Myanmar again as soon as possible. They welcomed the announcement of elections in Nepal on 10 April and urged all parties to
cooperate and maintain the declared date to ensure a free and fair process, open to all without intimidation. It is for the people of Nepal to decide
their own future. Both sides would like to see a peaceful, stable and democratic Bangladesh, where the people of Bangladesh will be able to
exercise their will through free and fair elections. They agreed that there is no military solution to the conflict in Sri Lanka, and urged the Sri
Lankan government to put forward a credible devolution package as a key contribution to finding a political settlement acceptable to all
communities within the framework of a united Sri Lanka.

Counter Terrorism

17. Terrorism is a global threat requiring a global response. Both sides underline the importance of joint international efforts in countering
terrorism which is not justified under any circumstances. They agree to intensify mutual exchange of views, experiences and practical cooperation
in the fight against terrorism, both through bilateral channels and in multilateral forums. They shall strengthen cooperation through the Indo-UK
Joint Working Group on Counter-Terrorism. Multilaterally, the two countries remain committed to pursuing as soon as possible agreement in the
UN on the Comprehensive Convention against International Terrorism. Bilaterally, the UK and India agreed to build on existing co-operation
including in the protection of critical national infrastructure, mass transit systems and the security of major sporting events/UK, and expand it
further in the fields of Civil Aviation security and crisis management. In addition, it was agreed to establish a new bilateral dialogue on Terrorist
Financing. The UK reiterated its support for India’s full membership of the Financial Action Task Force.

Dr. Manmohan Singh Rt. Hon. Gordon Brown MP

Prime Minister of India Prime Minister of the United Kingdom

Signed in New Delhi on 21 January 2008.

According to a survey conducted by Invest UK, number of Indian companies investing in the UK has gone up
to 4501 of which 338 are in the ICT sector. The survey also notes that in keeping with global trends, several
Indian companies from the biotechnology and pharmaceuticals sectors are now showing increased interest in
investing in the UK. In terms of projects, India is the second largest investor in the UK from Asia. About 40
percent of Indian overseas investment flows into Europe, compared with 20 percent to the US. Out of the total
Indian investment flow into Europe, over 60 percent is concentrated in the UK.

'A fabulous relationship' : Digby Jones*


"India is changing by the day - 9.4% growth this year. Goldman Sachs believes that by 2050 India will be the 3rd largest economy on earth.
And you’ll overtake Japan by 2030.

I sometimes worry – does business get on in spite of, or because of governments? This is not something that happens only in India. Believe me,
it happens everywhere. Globalization doesn’t take any prisoners. There’s a huge momentum in the world for change. The advancement isn’t
going to wait for politicians in India or Britain or anywhere in the world to catch up. So every time I come, I’m delighted to see a bit more
progress.
There are 20 Indian companies with full listing on the London Stock Exchange (LSE), with a combined market capitalization of just under £2 bn
($4 bn). That’s more than the market capitalization of all Indian companies on both NASDAQ and the NYSE combined. I’m very proud that it is
my country’s stock exchange that has become the location of choice for investors from all over the world. If they want to raise the dosh, follow
the dosh, insure it, they come to London. And India is living proof of how successful that is. There are another 20 Indian companies on the
Alternative Investment Market (AIM) in London as well. Of all the developing economies, India leads the way in taking its full part in the world’s
financial movement.
From a company investment point of view, Indian investment into the UK is also growing. Of all the investment that Indian companies put into
27 countries of the European Union, 60% comes to my country. That’s nearly two-third of the total Indian investment into the EU. I say “thank
you” to you for that. That matters. It’s something we can’t do without.
We have with us today one of the great legends of the Indian British business relationship -- Mr Rata Tata. A few months ago Tata acquired
Corus for £4.5 billion ($9 billion). Mr Tata was telling me this morning that he has got £13 billion invested in Britain and that he employs 30,000
Brits in my country -- That’s about 120,000 people dependant on that. This is serious, serious stuff. Not only are you welcome but it’s my job is
to ensure that every one of those jobs is secure because they did not want to go anywhere else. Then there’s UB-Whyte & Mackay -- £600 m
($1.2 billion).
And it is the other way around as well. The United Kingdom is the 3rd biggest investor in India. And UK’s investment into India is at an all-time,
obviously thanks to Vodafone’s recent £5.5 bn investment into Hutch.
It is important both ways round and our trade is in balance too – around £4 bn in either direction. We really are in a position where this is true
partnership, both ways. We continue to be an attractive destination for Indian companies. We are that springboard into Europe -- we speak the
global language of business. We also, of course, are the place where, if you want to build a global business, the only place you’d come to really
is London: the right time zone, flexible labour market, and at the same time, we don’t give a damn about the colour of one’s skin, and we don’t
care which god people worship. Bring the money, risk your talent and help make Great Britain greater.
In Britain, governments don’t interfere in companies buying companies. We get out of the way. Maybe because governments don’t understand it
for a start, but essentially because if we truly believe in a free market then we must walk the walk. And the benefits are there to see. But I know
it is difficult in democracies not to interfere.
The UK is a lightly regulated open economy. We have a highly skilled labour force and we are constantly moving up that value-added chain. And
we value innovation, creativity and new ideas.

Last year, over 70 new Indian companies made a new inward investment into the UK, creating 5,000 jobs. For example, take Northern Ireland -
the most fabulous place to start a business. It’s a part of our country that’s really got its tails up and really wants to do serious business around
the world. And it’s lovely to see Indian investment making a difference there.
Creative industries, advertising, architecture, design, art, web design, books, music, film – we really are very good and so are you. Just look at
the success of Bollywood and I believe together we can have a true partnership. We really can use each other’s skills, and access to dosh.
In UK’s context, you often hear of creative industries, and financial services but you know, we still make things rather well. I’m very proud to
have my hometown in my title. Birmingham is very important to me. And all over Britain we still make things well - successfully and without any
protection. We don’t do tariffs and subsidies. We just expose ourselves to global competition and, well, sink or swim. And because of this we’ve
made this enormous move up the chain of value-added innovation. Take, for example, our pharmaceutical companies, or our automotive
industry – the most productive plant that Ford have got anywhere in the world is Jaguar’s plant in Liverpool. And did you know that last year we
exported more cars that were made in Britain than we have ever exported in a year in the history of my country. And take the example of Airbus
– two-thirds of every Airbus ever built (if it’s got a Rolls-Royce engine) was built in Britain: the wings are built in North Wales, avionics in Bristol,
and the Rolls-Royce engine in Derby. "