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Dynamic private sector driving India-U.K. relationship: envoy

— Photo: M. Vedhan

(From right) Richard Stagg, British High Commissioner to India, Iain Wright, senior manager, KPMG U.K., and Mike Connor, British Deputy High Commissioner, Southern India, at a trade seminar in Chennai on Tuesday.

CHENNAI: It is the private sector that is driving the United Kingdom-India relationship, Richard Stagg, British High Commissioner to India, said on Tuesday.

There was a dynamic and powerful private sector in both countries, propelling growth. The way the relationship had grown in the last four-five years was dramatic. An indicator was the rise in the number of flights between India and the U.K. — in 2004, there were 19 flights and now, it went up to 110, he said.

With 60 per cent of Indian investment in the European Union coming into the U.K., the country had emerged the natural jumping off point for the whole of Europe. Speaking at a seminar on ‘Investing in the U.K.’ organised here by the U.K. Trade and Investment and KPMG, Mr. Stagg clarified that the U.K. was interested not merely in securing investment from India but also in facilitating British companies to invest in India.

Iain Wright, senior manager, KPMG U.K., drew up a brief for Indian businessmen considering investing in the U.K., while acknowledging that it was indeed a well-trodden path for Indian investors. India was the second largest foreign investor in London and third largest in the U.K. New sectors such as construction, retail and aerospace industries had lately been showing interest in India and some of them already made their investments in these segments, Mr. Wright said.

An open economy, a flexible labour market, lack of trade barriers and its position as the “beachhead” for the E.U. market made the U.K. a popular investment destination.

As incentives to businessmen gathered, Mr. Wright said, raising credit was easy; there were no restrictions on foreign ownership of companies; it was relatively easy to hire and fire staff; trade unions were relatively benign; and statutory minimum wages and rights were fixed. Apart from London, the world’s financial capital, regional centres such as Birmingham, Manchester, Leeds and Edinburgh had strong financial industries to attract investors.

The tax and regulatory environment was friendly with a favourable capital gains tax regime. There was no annual charge for taking advantage of the non-domicile regime now (this charge will be introduced after seven years). Mr. Wright also spoke about the advantage of listing companies on the London Stock exchange and the Alternative Investment Market, both of which had a huge foreign presence.

Representatives of Indian businessmen who have had experience investing in the U.K. — Capt. Balasubramanian, chairman, Teledata Informatics, Chennai, and Arun S.Raj of ALMT Legal — spoke.

Mike Connor, British Deputy High Commissioner in southern India, said the U.K. was one of the most successful destinations for overseas investment.

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