UK prime minister David Cameron recently made his third visit to India accompanied by a large trade delegation, including GlaxoSmithKline’s Sir Andrew Witty and representatives from drinks company Diageo and publisher Reed Elsevier.
Mr Cameron is the second British prime minister to visit Kolkata after John Major 16 years ago. Strengthening trade ties and boosting bilateral business opportunities were at the top of his agenda. British companies have made big-ticket investments in India of late. Unilever has spent $3.5bn to increase its stake in its India unit, so too has GlaxoSmithKline. UK-based telecoms major Vodafone has just announced a $1.7bn offer to buy out its Indian partners.
For all the good news, problems persist with India's FDI tax regime. “India is a very attractive country for inward investments,” Mr Cameron told reporters on board his plane to the Indian capital. “It’s attracted a lot, it’s got huge future potential. But I’ll be making the argument that one of the best ways to get that is stability, security, predictability and fairness in front of the law,” according to Bloomberg. This is possibly a reference to Vodafone’s $2.2bn tax battle with the Indian government for taking over Hong Kong-based Hutchison Whampoa’s offshore stake in a domestic telecoms company in 2007.
Mr Cameron was also excited about the next stage in establishing the 1000 kilometre Bangalore-Mumbai economic corridor that will link India’s software and technical hub with its main financial centre and the manufacturing base of Pune. According to India’s business newspaper Mint, before his visit, Mr Cameron talked by phone with Anand Mahindra, chairman of Mahindra and Mahindra, India’s biggest tractor manufacturer, to try to help conclude a deal with British engineering-services company Ricardo to develop a technical centre in Leamington Spa, investing £2m ($3.2m) and creating 250 jobs. Mr Cameron also hoped to see a joint agreement signed between the UK’s Helperby Therapeutics and India’s Cadila Healthcare for research and development into antibiotic drug resistance.
In Kolkata, the UK is expected to make investments in tourism, transport, particularly inland water transportation and riverfront beautification. If that goes ahead, industrialists from the UK would visit West Bengal, while those from the state would in turn visit the UK. Mr Cameron has also invited West Bengal’s chief minister Mamata Banerjee, who often has spoken about transforming Kolkata into London and developing the Hooghly riverfront along the lines of London’s Thames.
N Chandra Mohan is an economic and business commentator based in New Delhi.