NEW DELHI (Reuters) - Britain would like greater transparency for companies doing business in India and will raise specific concerns from British firms with the New Delhi government, Trade Minister Stephen Green said on Monday.
Green, on an India trip this week, will promote British expertise in areas such as railways, as part of Prime Minister David Cameron’s strategic trade push to emerging giants like India and China to help Britain’s economic recovery.
But London has raised concerns over India’s erratic and opaque business climate after regulatory delays over London-listed Cairn Energy’s (CNE.L) $9.6 billion asset sale to India’s Vedanta Resources (VED.L), and legal wrangling over India’s $2.6 billion Vodafone (VOD.L) tax demand.
Britain was also one of eight countries to complain to the Indian government about unpaid bills of more than $74 million owed to firms from their nations from contracts relating to the Commonwealth Games, the Hindustan Times reported on Monday.
Asked whether he would raise the Cairn-Vedanta deal and Vodafone tax issue, Green said he would discuss “specific business situations which are under examination.”
“I think we’ll see a significant increase in investment in both directions,” he said in an interview in New Delhi. “In order to facilitate that ... we need to have predictability, transparency on both sides.”
India has been in the grip of a series of corruption scandals in the past year that piled pressure on Prime Minister Manmohan Singh’s government, put the brakes on economic reforms and added to a sense of regulatory uncertainty.
“GLASS HALF FULL”
With a potential market of 1.2 billion customers and one of the highest economic growth rates in the world, India presents a huge business opportunity for British exporters and service providers. Britain is already the fourth largest foreign direct investor into the South Asian giant.
India and Britain want to unlock what both sides agree is huge trade and investment potential that has already seen bilateral goods trade grow from $4.7 billion in 2000 to $11 billion last year, according to Indian government data.
British firms, such as private equity company 3i (III.L), are pushing major investments into India’s infrastructure sector, which is seen worth $1.5 trillion in the ten years to 2017.
Cameron visited India in July as part of an early diplomatic push to court Indian business and tap new sources of economic growth after Britain’s worst recession since World War Two.
“I don’t want to convey the impression that one should be raising a bunch of negative points, actually points of difficulty,” Green said. “I do this in the context of a relationship growing fast,” he said. “It’s a glass half full.”
Editing by Miral Fahmy