Indian businesses will continue to get warm welcome in Britain: UKIBC chief

Q&A with Richard Heald, CEO of UK India Business Council

Despite Brexit referendum, UK and India believe there are reasons to be extremely positive about the economic partnership. In an exclusive interview with Sanjay Jog, UK India Business Council (UKIBC) CEO Richard Heald says Bilateral Trade Treaty with India should be a priority and would be immensely beneficial to both countries.

Will the Brexit have an adverse impact on businesses in the UK and India?

Obviously, there is great amount of uncertainty post Brexit referendum and while the way forward, and timelines to achieve negotiated agreements with the EU and other trade partners, is not yet known, it is clear, that the UK's trade and economic engagement with the world's leading countries, including India, will become more important to the nation's future, not less.

Indeed, the UK India Business Council expects that more emphasis will now be put on improving bilateral economic ties especially with India. Already we are hearing increasingly positive noises at all levels about the opportunities that exist in the current environment to increase economic ties between India and the UK.

The UK India Business Council remains positive on the outlook for trade/economic ties with India. The arguments for both Indian and UK companies to trade and to invest in each other's economies remains intact.

The recent further relaxation of FDI norms in key sectors is a welcome step forward and the passage of GST in the Monsoon session which is now widely anticipated will both be a significant boost both to economic growth and inbound investments as well as enhancing Ease of Doing Business. At the same time, the UK Chancellor has announced plans to reduce the levels of Corporation Tax further to encourage investment into the UK.

We are confident that the UK will remain a very good place to do business. We do know that the British economy is fundamentally strong which, taken together with the benefits of a common language, rule of law, ease of doing business, time zone, and world-leading technical and intellectual innovation, there are reasons to be extremely positive about the UK and Indian economic partnership.

Will the present political development affect operations of Indian companies in UK?

Indian businesses will continue to receive a very warm welcome in Britain, and all of us who believe in India will continue to work for even stronger and closer ties. Many of the 700 Indian companies have invested in the UK for UK specific reasons rather than for ease of access to the EU (pharma, financial services, engineering/ electric research collaborations, access to NRIs). This will not change and we fully expect that the UK will negotiate access to the single market.

The current scenario, thus opens many new opportunities for UK industry to work even more closely with Indian corporates and build a much stronger, and more open trade and investment partnership. Clearly, the UK will go on selling a very large volume of goods and services to the EU as the Single Market is the UK's largest trading partner and will remain so.

The Brexit may have an impact on future investment and expansion decisions. What is your take in this regard?

Actually, recent statistics would indicate that only some 14% of Indian companies investing do so largely for the EU access. This compares to 48% who invests in the UK for UK specific reasons and a further 38% because of a combination of UK and EU reasons. Of course, Brexit has affected sentiment but again a large percentage of Indian companies in the UK feel that Brexit will either make no difference to them or indeed is expected to be good for their business.

Anecdotally, the UKIBC has seen increasing uncertainty into the referendum campaign. This was evidenced by investment decisions/ projects being put on hold pending the referendum. Post the result, in the immediate aftermath, it is entirely natural that companies may wish evaluate their future plans from a holistic point view. At the same time, the UKIBC have had companies who have identified opportunities and have approached us as they accelerate their plans.

The UKIBC's position is in favour a continuation of the UK's access to the Single Market on the most favourable compatible with the will of the UK people. We believe that a Bilateral Trade Treaty with India should be a priority and would be immensely beneficial to both countries.