British PM launches charm offensive in India
Thursday, July 29, 2010
British Prime Minister David Cameron kicked 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. Accompanied by a bevy of top ministers and a small army of business leaders, 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 kicked off in the southern city of Bangalore -- the showcase of India's IT industry -- where Cameron was to 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 57 more Hawk trainer jets. India ordered 66 Hawk jets from BAE in 2004. All the aircraft in the follow-up deal will 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.
Apart from a trip to war-torn Afghanistan last month, the visit is Cameron's first major foray to Asia. The choice reflects India's growing regional clout and its emergence as an investment destination to rival neighbouring China. 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.
"This is the beginning of an enhanced relationship," Britain's finance minister George Osborne said after ringing the bell to start trading at the Bombay Stock Exchange on Wednesday. "The relationships are good and historic but can be made stronger," said the chancellor of the exchequer, 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. "There needs to be some scheme, some initiative around which you rejig the relationship," he said.
posted @ 11:02 AM,
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UK: Country outlook
Sunday, April 25, 2010
- After 12 years in government, the Labour Party is continuing to struggle in the polls and faces defeat at the next general election (due by early June 2010).
- The Economist Intelligence Unit expects the opposition Conservative Party to gain a modest overall parliamentary majority at the election. However, a hung parliament cannot be discounted, with the Liberal Democrats as kingmaker.
- The unprecedented policy response, at home and abroad, has stabilised the financial markets, but has huge medium-term implications. Transferring banks' balance-sheet risk to the public sector could sow the seeds of the next crisis.
- Concerns about the abysmal state of the public finances will dominate policy debate, as the fiscal deficit and public debt rise to post-war record levels. This will necessitate higher taxes and deep spending cuts. Industrial unrest is likely.
- We expect the Bank of England (BoE, the central bank) to begin to raise its main policy rate from early 2011. Concerns about gilt market volatility may lead the BoE to raise rates before exiting from its more unorthodox policy measures.
- Despite massive state-backed financial support, the banking sector remains in a precarious condition. Credit availability will remain constrained, as private-sector balance sheets are rebuilt and capital positions strengthened.
- After contracting by an estimated 4.6% in 2009, real GDP is forecast to grow by an anaemic 0.7% in 2010 and 1% in 2011. There is a risk of a renewed decline in output as inventory adjustment and stimulus measures fade.
Labels: Economy and Business, UK
posted @ 11:44 AM,
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