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UK wants 'special relationship' with India

April 23, 2008 10:33 IST

Recognising that 'trade' and 'takeovers' have become the buzzwords in UK-India relations in recent years, a key House of Commons committee wants the Labour government to forge a 'special relationship' with India.

"We need to establish a relationship as special with India as the one we have enjoyed with the United States," the Business and Enterprise Committee said in a report titled 'Waking up to India: Developments in UK-India economic relations'.

The report, published this week, notes that there has been a 'significant improvement' in economic relations between Indian and Britain since 2006, and mentions recent takeovers of British companies by Indian companies such as Tata and United Breweries.

The committee, comprising MPs across party lines, is chaired by the Conservative MP from Mid Worcestershire Peter Luff.

"The United Kingdom has woken up to India, but progress must not now be slowed in response to global concerns or expressions of doubt about India's future," the committee's report said.

"Even if India grows more slowly than other emerging markets, in a country of over a billion people the opportunities created would still be huge. The United Kingdom is uniquely well placed to take advantage of them, to the benefit of both partners," it added.

The committee had briefings from several stakeholders, including Indian-origin entrepreneur Karan Bilimoria and representatives of UK Trade and Investment, the department responsible for overseas trade relations.

The committee noted that there were several hurdles in India to further growth, but declared that "not all the barriers to a deepened relationship are on the Indian side".

It mentioned challenges faced in the area of visas and competition in education from the United States and Australia. The committee noted the 'recent shocks' to the world's financial markets and said that India's economy had recently enjoyed growth rates of around 9 per cent a year.

It said that the growth was likely slow slightly in 2008 and 2009. "The country faces significant challenges, such as real poverty, poor infrastructure and public sector bureaucracy. However, the Indian market is liberalising. India is an emerging market with much to offer," it said.

"It would be wrong to pretend that no barriers to trade or investment remain, but there are real opportunities for those who are prepared to take advantage of them," it said.

The committee also noted that several British government agencies had opened offices in different parts of India and called for a coordinated approach to deepen economic ties at various levels.

"While the establishment of offices by different public and private sector organisations in India is a sign of genuine and committed UK interest, we are concerned that the influx of organisations, if not properly coordinated, will increase confusion, with too many bodies with overlapping objectives," it said.

Recalling that the first bilateral UK-India Investment Summit was held in 2006, the committee noted that it had not been held again. It encouraged the British government to hold a follow-up summit soon.

The committee also urged the government to keep under review the possible improvements in visa and other related arrangements that could be made to the mutual benefit of the economies of India and Britain.

"We urge the Government to explore with Schengen countries how the visa regime for Indians resident in the UK and needing to travel to other EU countries could be eased, or periods of EU visa validity extended considerably," the report said.

The committee noted that Indian students were coming in increasing numbers to Britain, but said it was concerned that Britain's share was declining in absolute terms relative to its competitors, notably Australia.

"We call on the Government to undertake a comprehensive examination of the ways of making the UK a more attractive place to study for Indian students, including overcoming visa issues and increasing the length of time Indian students can remain in the UK after graduation," it added.

Prasun Sonwalkar in London
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