Cameron Urges India to Lift Barriers to Trade to Create Jobs




July 28 (Bloomberg) -- U.K. Prime Minister David Cameron will press India today to remove barriers to free trade to create thousands of jobs in both countries.

Cameron is visiting the southern city of Bangalore, India’s technology hub, with a delegation that includes 39 business leaders and four members of his Cabinet. The premier will seek to sell Britain as a place for Indian companies to do business while asking India to create opportunities for U.K. investors.

“We want you to reduce the barriers to foreign investment in banking, insurance, defense, manufacturing and legal services -- and reap the benefits,” Cameron will say in a speech, according to excerpts released in advance by his office. “There are no two ways about this, we’ve got to take on the vested interests and open up.”

The threat to the British economy from the euro-region debt crisis and the need to cut the budget deficit prompted Cameron to focus foreign policy on trade and investment. India’s government estimates this year’s growth will be the fastest in three years. Global negotiators have been in talks since 2001 to lift trade barriers in emerging economies such as India because they’ve been unable to reach agreement on farm subsidies.

The prime minister will also announce today an Indian order for 57 Hawk pilot-trainer aircraft from BAE Systems Plc, valued at around 500 million pounds ($775 million), two people familiar with the matter told reporters.

‘Generate Growth’

In his speech, Cameron will say that Indian plans to invest more than $750 million in infrastructure in the coming years are “good for Indian business, but it is also a chance for British companies to generate growth.”

He will cite the “deep and close connections” between the two nations. India achieved independence from Britain in 1947, and almost 2 million people of Indian origin live in the U.K.

“I want this to be a relationship which drives economic growth upwards, and drives our unemployment figures downwards,” Cameron will say. “I want to see more Indians setting up in Britain and more Brits setting up over here.”

Bangalore is home to Infosys Technologies Ltd., India’s No. 2 software-services provider, and Wipro Ltd., the country’s third-largest software exporter.

In an article for the Chennai-based Hindu newspaper published today, the prime minister said he’d come to India “in a spirit of humility,” aware that “Britain cannot rely on sentiment and shared history for a place in India’s future.”

Cameron said he’s traveling with “the biggest visiting delegation of any British prime minister in recent memory.”

Barclays, Vodafone

Business leaders on the trip include BAE Systems Plc Chairman Richard Olver, Michael Queen, chairman of 3i Group Plc, John Varley, chief executive officer of Barclays Plc, Vodafone Group Plc CEO Vittorio Colao and Stuart Popham, senior partner at international law firm Clifford Chance LLP.

Foreign lawyers are lobbying the Indian government to be able to give corporate advice to Indian clients. Barclays plans to quadruple the amount of money it manages for rich clients in South and Southeast Asia in the next five years, the London- based bank said last month.

While Cameron is calling on India to open up its markets, his Conservative-led coalition government is planning a cap on non-European Union immigrant labor at home. That has led to criticism from the Indian government, with Commerce and Industry Minister Anand Sharma warning the quota could hit Indian doctors, nurses and engineers seeking employment in the U.K.

The proposal is also at odds with the views of Cameron’s Liberal Democrat coalition partners. Liberal Democrat Business Secretary Vince Cable told Indian journalists before the trip that he wants a “liberal” immigration policy.

Second Behind U.S.

India is the second-largest foreign investor in Britain after the U.S., with Indian-owned businesses generating more than 14.4 billion pounds of sales in the year ending March 2010, according to the Indian Commerce Ministry. Mumbai-based Tata Motors owns the Jaguar and Land Rover brands and Tata Steel Ltd. owns U.K. steelmaker Corus Group Ltd.

While the U.K. ranks fourth among foreign investors in India, its share of the total is just 5 percent in rupee terms.

Indian exports to the U.K. fell 0.8 percent to $6.6 billion in the year ended March 31, ministry figures show. Imports from Britain during the period rose 18.5 percent to $5.9 billion.

Cameron will also call on India today to reach agreement on a free-trade deal with the European Union by the end of the year and to make progress on a global trade accord. The so-called Doha Round of talks collapsed in July 2008.

“Agreement on Doha would add $170 billion to the world economy,” Cameron wrote in The Hindu. “Together we need to make the argument that we will only get things moving on Doha if we expand it -- because when the pie gets bigger, we’ll all get a greater share.”

After his visit to Bangalore today, Cameron will travel on to New Delhi for a meeting with Indian Prime Minister Manmohan Singh tomorrow.