Decision on Vodafone tax case has given a positive signal to British businesses: Dominic Jermey

Interview with chief executive officer, UK Trade and Investment

The government’s decision not to appeal in the Vodafone transfer-pricing case which it has lost, has resonated positively with the British industry, Dominic Jermey, chief executive officer of the UK Trade and Investment (UKTI), tells Nayanima Basu during his maiden visit to India in the present capacity. Excerpts:

This is your first visit as the UK Trade and Investment chief. How was your interaction with the government, which is keen to take India-UK ties to the next level?

We identified some clear ways to increase investments on both sides. We in the UK have worked really hard on making the UK a business-friendly environment. We talked about the Indian government’s aspirations around the ease of doing business and how we could share some of our learning on that and make India an absolutely easy place to do business. And, that will be good for UK businesses. We talked about sustainable and smart cities and all that the UK has got to offer around water systems, power systems, information technology network, etc. We are also looking to work and collaborate with India in bio and pharma products.

While investment flows between both countries have been impressive, bilateral trade continues to be within the range of $8-10 billion. Are you taking any measures to increase imports from India?

Yes, that’s right. I am very focused on how we can do better and how we can make that a much more substantial number. We at UKTI and with our partners like the UK-India Business Council are focusing on the key areas where UK businesses can add value to the Indian economy.

How keen is industry in the UK on the ‘Make in India’ campaign?

Under this, UK businesses are focusing on joint ventures, partnerships with Indian companies in order to support the ‘Make in India’ campaign. For example, BP and Reliance have already financed a joint venture under our ‘Great’ collaborations banner for over a billion dollars to develop oil fields together. That’s the kind of collaboration we are looking at.

The Vodafone tax issue finally seems to be settled, with the government deciding not to appeal in the transfer pricing case it lost in the Bombay High Court. Are UK businesses feeling relieved?

This is really important. We strongly support the reform agenda of Prime Minister Modi. I cannot think of a more important indication for British businesses that the way things are changing and improving in terms of international business environment here in India and the way in which some of the difficult issues are now being dealt with.

But one of the other British conglomerates, Tesco, is having a hard time here. All their plans to enter the multibrand retail sector seems to be on hold due to the current Indian government’s policy decision not to allow foreign direct investment (FDI) in multibrand retail. Is that a cause of concern?

I have not engaged with Tesco here.

What are the concerns and issues being flagged by the British companies operating here for not allowing FDI in multi-brand retail?

They are very optimistic. Prime Minister Narendra Modi has a clear agenda and we are judging by that. He is starting to deliver on it.

Is not allowing FDI in retail not a concern for you at all? Did you not raise this issue with commerce and industry minister Nirmala Sitharaman when you met her?

This is part of the conversation. We raised a number of issues and this was not on my agenda to raise. Tesco is one aspect of the retail space. There are many other areas in retail where there are success stories. We believe the goods and services tax is going to be great stimulus for this country.

Do you believe it will be rolled out as promised?

Yes, and this time we sense a very strong political commitment to do so. These things are not easy. But it is clearly on the agenda.

The UK-India Joint Economic and Trade Committee (Jetco) had recently met in London this January. What are some of the issues that were discussed?

Jetco focused on three core areas — education and skills, sustainable cities and manufacturing and advance engineering. We have set up concrete little goals in these areas to be completed in the next six to 12 months. Then we are also looking at tax environment and other incentives to support each other’s business.
 

How keen is UK industry on the ‘Make in India’ campaign? 

UK businesses are focusing on joint ventures, partnerships with Indian companies in order support the ‘Make in India’ campaign. For example, BP and Reliance already financed a joint ventures under our ‘Great’ collaborations banner for over a billion dollars and we will be developing oil fields together. That’s the kind of collaboration we are looking at.