Date:15/01/2004 URL: http://www.thehindu.com/2004/01/15/stories/2004011504741400.htm

National

No escape from outsourcing: Britain

By Our Special Correspondent

NEW DELHI, JAN. 14. Accepting that there was no escape from outsourcing in the changed world economic environment, Britain today asked India to lift the cap on foreign investment in areas such as banking, insurance, accountancy law and financial services. It also offered to act as a bridgehead for India to European Union.

Though outsourcing is a sensitive issue in the United Kingdom, yet there was realisation it (outsourcing) was inevitable and beneficial.

"The British Government is taking steps to boost competitiveness of the country and enable its workforce to be engaged higher up in the value chain," the British High Commissioner to India, Michael Arthur, addressing a meeting organised by the CII here said.

"Outsourcing is an inevitable and economically beneficial consequence of globalisation. But so too will Indian companies benefit — we believe — if you allow full access in India to services such as insurance, banking, accountancy, law and financial services — where we in Britain are world competitive," he said.

Mr. Arthur told the meeting that after the United States and Japan, the U.K. was the third largest investor in the country, while India has become the eighth biggest investor in Britain. Indian companies were doing business through the London Stock Exchange that had greater financial depth than both NYSE and Nasdaq combined.

On WTO, he said that though India and Britain do not have identical interests in what the final Doha round conclusions should ideally be, "we do have a shared interest in ensuring that there is such a conclusion and that the global trading regime moves forward and liberalises."

He said Britain was keen to see greater Indian access to the E.U. markets for agricultural produce. The two countries have a shared interest in avoiding protectionism.

While Tourism and Education afforded great opportunities to build bridges between the peoples of the two nations, his country was ready to act as the bridgehead for India to the E.U.

Acknowledging that India was fast emerging as an international player and economic powerhouse, the High Commissioner said New Delhi is a key partner with which his country had a shared priority to combat terrorism and strategic cooperation for peace and security.

"`Development policy is a key element in our bilateral relationship. Britain has a huge development cooperation programme. With India, we work with four key states and the Centre. Our development programme here — at about Ł 200 million per annum, and we plan to raise this figure half as much again — is our biggest anywhere in the world. But Britain and India also have a joint agenda on multilateral approaches to development," he said.

Emphasising Britain's support to India's permanent membership to the United Nations Security Council, he said six senior British Ministers would be visiting the country this year and hold discussions for closer bilateral cooperation in areas such as counter-terrorism, sustainable development, climate change, weapons of mass destruction, energy supply and a liberal global trading regime which already stand identified.