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Warm words, trade challenges ahead as UK woos India

NEW DELHI (Reuters) - India and Britain spoke on Thursday of a new momentum toward closer trade and security ties, but a high-profile visit by Britain’s prime minister was partly overshadowed by his outspoken comments on Pakistan.

British Prime Minister David Cameron (L) and his Indian counterpart Manmohan Singh walk before their meeting in New Delhi July 29, 2010. REUTERS/B Mathur

David Cameron flew in with six ministers and more than 30 senior executives from top British firms to show seriousness about enhancing relations with India, with a view to boosting trade and business exchanges and fostering growth.

Indian Prime Minister Manmohan Singh said during a joint news conference with Cameron that he shared the British vision of “a renewed and enhanced partnership” between the Asian powerhouse and its former colonial master.

“We have set in place a new momentum to drive our strategic partnership forward,” Singh said in what was the final public event for the British delegation after a hectic two days in Bangalore, Mumbai and New Delhi.

But three out of the four questions from journalists at the news conference were about Cameron’s comments on Pakistan, which had already dominated Indian media coverage of the visit.

Cameron told an audience of Indian business leaders in Bangalore on Wednesday that Pakistan should not “promote the export of terror,” causing anger in Islamabad. The comments resonated with India, which has long accused arch-rival Pakistan of being behind terror attacks on its soil, but the Pakistani ambassador to Britain said Cameron had damaged the prospects for regional peace and shown inexperience.

Cameron defended himself during the joint news conference.

“I believe in speaking clearly and plainly about these matters,” he said, adding that it was not acceptable for terror groups to exist within Pakistan and that Britain would help Islamabad further its efforts to crack down on such groups.


The two prime ministers were keener to talk about trade links, with Singh saying he wanted bilateral trade to double within the next five years.

British-Indian trade was worth $12.5 billion in 2008-2009 -- an amount dwarfed by what Britain trades with Ireland, a country of about 4 million. India has the world’s second-biggest population, a potential customer base of 1.2 billion.

The stakes are greater for Britain, which is struggling to emerge from its worst recession since World War Two, than for India, which is enjoying strong growth and stands to reap benefits from increasing trade flows between emerging markets.

Britain has lost market share in India in recent years, slipping to 18th biggest exporter to the Asian giant in 2008-2009 from fifth in 2002-2003.

“There’s been a certain amount of complacency in the past ... a belief that sentiment was enough,” Vince Cable, business secretary in a new coalition government that came into office in London in May, told ministers and business leaders in New Delhi.

The new British government, a coalition of Conservatives and Liberal Democrats, has made clear it thinks the previous Labour government had focused on other foreign policy priorities to the detriment of ties with India, a long-time friend and ally.

With Britain planning deep cuts in public spending to rein in a bulging deficit, the coalition wants to focus on fast-growing economies like India to tap new sources of growth.

But Cameron also found time during his visit for some light relief, enjoying a brief encounter with Indian cricket icon Kapil Dev, who wreaked havoc among England batsmen in the 1980s.

At the news conference, he thanked Singh for “allowing me to realize one of my childhood dreams when I was able to hit Kapil Dev for six,” he said to laughs. Cricket is hugely popular in India.

“I do admit he was bowling a tennis ball, not a cricket ball, which made things a lot easier for me,” he said.

Additional reporting by Matthias Williams and Krittivas Mukherjee; Editing by Sugita Katyal