'The UK India Business Council remains positive on the outlook for trade/economic ties with India.'
Britain’s decision to leave the European Union will not have much impact on UK-India economic ties, UK India Business Council chief executive officer Richard Heald, below, left, tells Sanjay Jog.
Will the Brexit have an adverse impact on businesses in the UK and India?
There is great amount of uncertainty after the Brexit referendum.
While the way forward and timelines to achieve negotiated agreements with the EU and other trade partners are not yet known, it is clear that the UK’s trade and economic engagement with the world’s leading countries, including India, will become more important to the nation’s future, not less.
Indeed, the UK India Business Council expects more emphasis to be put on improving bilateral economic ties especially with India.
We are already hearing increasingly positive noises at all levels about the opportunities that exist in the current environment to increase economic ties between India and the UK.
The UK India Business Council remains positive on the outlook for trade/economic ties with India.
The arguments for both Indian and UK companies to trade and to invest in each other’s economies remains intact.
The recent relaxation of foreign direct investment norms in key sectors is a welcome step forward and the passage of the goods and services tax in the monsoon session will be a significant boost both to economic growth, inbound investments and enhancing the ease of doing business.
At the same time, the UK Chancellor has announced plans to reduce the levels of corporation tax further to encourage investment into the UK.
We are confident that the UK will remain a good place to do business.
The British economy is fundamentally strong which, taken together with the benefits of a common language, rule of law, ease of doing business, time zone, and world-leading technical and intellectual innovation, there are reasons to be extremely positive about the UK and Indian economic partnership.
Will the present political development affect operations of Indian companies in the UK?
Indian businesses will continue to receive warm welcome in Britain, and all of us who believe in India will continue to work for even stronger and closer ties.
Many of the 700 Indian companies have invested in the UK for UK-specific reasons rather than for ease of access to the EU (pharma, financial services, engineering/ electric research collaborations, access to non-resident Indians).
This will not change and we fully expect that the UK will negotiate access to the single market.
The current scenario, thus, opens many new opportunities for UK industry to work even more closely with Indian corporates and build a much stronger, and more open trade and investment partnership.
Clearly, the UK will go on selling a very large volume of goods and services to the EU as the single market is the UK's largest trading partner and will remain so.
Will Brexit impact Indian companies’ future investment decisions in the UK?
Actually, recent statistics would indicate that only 14 per cent of Indian companies investing in the UK do so largely for the EU access, compared with 48 per cent for UK-specific reasons, and 38 per cent because of a combination of UK and EU reasons.
Brexit has affected sentiment, but a large percentage of Indian companies in the UK feel Brexit will either make no difference to them or be good for their business.
Anecdotally, the UKIBC has seen increasing uncertainty into the referendum campaign.
This was evidenced by investment decisions/ projects being put on hold pending the referendum.
After the result, in the immediate aftermath, it is entirely natural that companies evaluate their future plans from a holistic point view.
At the same time, we at the UKIBC have had companies that have identified opportunities and approached us as they accelerate their plans.
The UKIBC’s position is in favour a continuation of the UK’s access to the single market on the most favourable compatible with the will of the UK people.
We believe a bilateral trade treaty with India should be a priority and would be immensely beneficial to both countries.
Image: British Airways' Airbus A380 arrives at a hanger after landing at Heathrow airport in London. Photograph: Paul Hackett/Reuters
The image is used for representational purpose only