Bilateral trade pact with UK to focus on digital, F&B, health: UKIBC CEO

The first Indian to take charge as CEO of the influential council, Jayant Krishna tells Subhayan Chakraborty many UK firms are exploring India as a large incremental base for manufacturing and R&D

While both governments gear up to flesh out the proposed trade deal between India and the UK, market access and ease of doing business remain priorities for British businesses in India, says UK India Business Council (UKIBC)’s new group Chief Executive Officer (CEO) JAYANT KRISHNA. The first Indian to take charge as CEO of the influential council, Krishna tells Subhayan Chakraborty that while British companies may not abandon China in favour of shifting supply chains to India, many UK firms are exploring India as a large incremental base for manufacturing and research and development (R&D). Edited excerpts:

Which are the sectors in focus for the proposed bilateral trade pact being negotiated by both nations?

UKIBC has welcomed both governments’ shared ambition for a future free trade agreement. The commitment to an enhanced trade partnership that came out of the UK-India Joint Economic Trade Committee (JETCO) at the end of July is seen as a road map to such an agreement. The three priority sectors agreed by both governments at JETCO in 2019 — food and drink, lifesciences and health care, and digital and data services — are an important starting point for such action. This enhanced trade partnership is rightly focusing on market access issues and the ease of doing business.

Will the recent skirmishes between India and China lead to movement in British investment flows?

The UK and India are also on a lookout for opportunities emanating from the business sentiments worldwide to explore manufacturing supply chain possibilities as alternatives to China. But China has specific capabilities and a large, attractive market similar to India’s. Nonetheless, the UK entities look at India as an incremental base for manufacturing and R&D.

Which areas of the economy will see British interest after the pandemic?

British foreign direct investment into India has totalled over $28 billion since 2000 and continues to grow. Investments by UK firms have created 800,000 jobs in the organised sector. It was very positive to hear Prime Minister Narendra Modi highlighting the centrality of sectors such as manufacturing, infrastructure, energy, pharmaceutical, space, defence, and global cooperation. These are all areas ripe for India-UK collaboration in creating an Atmanirbhar Bharat, underpinned by both nations’ strong track record in technology and innovation. In manufacturing, the UK already has a great presence in India, with the likes of Perkins Engines, JCB, BAE Systems, GlaxoSmithKline, and Rolls-Royce.

How important is India in the UK’s plans of engagement in a post-Brexit world?

At JETCO, senior government officials welcomed the positive trend in UK-India trade, which saw trade top £24 billion in 2019, with a 10 per cent growth over 2018, and set targets to make that even greater. The introduction of the UK’s new point-based immigration system and graduate immigration route will make it easier for Indians to work and study in the UK.

What are UKIBC's suggestions on improving ease of doing business?

For the last five years, UKIBC has been producing an annual Doing Business in India report which complements the World Bank’s Ease of Doing Business rankings. And every year we have found that the top barrier to doing business in India is legal and regulatory impediments. Improvement in the bureaucratic processes was subsequently the most desired reform, as articulated by 28.6 per cent of respondents. More transparency, consistency and equanimity in the application of law and regulations would be a great way forward."

How do British businesses view the ‘Atmanirbhar Bharat’ policy being espoused by India?

Finance Minister Nirmala Sitharaman has said that Atmanirbhar Bharat means integration, not isolation, and we at UKIBC have had similar reassurances from senior government representatives in recent engagements. The UK’s rich research and development ecosystem, and world leading technology can be hugely beneficial to Atmanirbhar Bharat and contribute to India’s objective of becoming a global manufacturing powerhouse.