British PM launches charm offensive in India

28th July 2010, Comments 0 comments

British Prime Minister David Cameron kicks off a much-touted visit to India Wednesday, aimed at winning over a key business partner seen as vital to boosting Britain's post-recession recovery.

Flanked by a bevy of top ministers and a small army of business luminaries, Cameron arrived late Tuesday at the head of the largest British delegation to travel to the former jewel in its colonial crown in recent memory.

It has been tagged as a mould-breaking mission to redefine what Cameron's government sees as a long-neglected relationship with one of the world's fastest growing economies.

The trip kicks off in the southern city of Bangalore -- the showcase of India's IT industry -- where Cameron will visit the country's second-largest software exporter Infosys and the state-run defence giant Hindustan Aeronautics Ltd. (HAL).

Among a raft of trade agreements to be signed during the visit, the expected highlight is a deal worth up to 650 million dollars for BAE Systems to supply about 60 more Hawk trainer jets.

India ordered 66 Hawk jets from BAE in 2004. All the aircraft in the follow-up deal are likely to be jointly assembled locally with HAL.

Since taking power in May, Cameron has said he wants British foreign policy to focus more on business in a bid to boost the economy as it emerges from recession facing deep budget cuts to combat record state debt.

Among the BRIC group of emerging economies -- Brazil, Russia, India and China -- India is seen as one of the largest, most culturally compatible and under-exploited markets for partnerships with British firms.

One of the first countries to shrug off the effects of global financial crisis, India boasts a growing, consumer-hungry middle class and an economy that is forecast to grow 8.5 percent this fiscal year.

"India matters. Its economy is growing at three times the speed of ours," said Britain's finance minister, George Osborne, who is accompanying Cameron along with Foreign Minister William Hague and Business Secretary Vince Cable.

Britain's ambassador to India, Richard Stagg, described the visit as one of "unique scale and ambition" and said Cameron and his cabinet ministers were intent on forging a "new, special relationship" with India.

Ties between the two countries go back a long way.

India was known as the "jewel in the crown" of the British empire until independence in 1947 and up to two million people of Indian origin live in Britain, its largest ethnic minority group.

Bilateral trade was worth 11.5 billion pounds (13.7 billion euros, 17.7 billion dollars) last year.

Britain is the most popular business destination in the European Union for Indian companies such as Tata and ICICI Bank -- and the richest man in Britain is the Indian steel magnate Lakshmi Mittal.

"Cameron's visit is a clear signal: Britain is wooing India," said R.K.Jain, a professor of European studies at Jawaharlal Nehru University in New Delhi.

"Britain wants to attract high ticket investment from India. They are fighting a deep financial crisis and acquiring foreign direct investment is one of the best ways to improve that," he said.

But Britain is not alone in paying court to its former colony, and faces competition from much bigger trading powers such as the United States and Japan.

"The question is, what can we offer India?", Gareth Price, head of the Asia Programme at London foreign affairs think-tank Chatham House, told AFP.

"If (Cameron) just comes back with smiles and handshakes and MOUs (memoranda of understanding) there will be a collective shrugging of shoulders," Price said.

"There needs to be some scheme, some initiative around which you rejig the relationship," he added.

Cameron is expected to tread carefully around issues such as India's volatile relationship with Pakistan, given New Delhi's extreme sensitivity to anything that smacks of outside interference.

"Our approach would not be to tell those countries what to do, they must take forward their own bilateral relations," Hague said recently.

Hague's predecessor in Britain's previous Labour government, David Miliband, infuriated Indian officials during a visit here last year when he linked the unresolved Kashmir dispute to the 2008 militant attacks on Mumbai.

© 2010 AFP

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