IN RECENT years, the UK has traded more with Ireland than all of the Bric nations (Brazil, Russia, India and China) put together. That fact has been rolled out regularly by our politicians over the past few years. And it also explains why trade delegations led by the Prime Minister and other ministers to emerging markets have been such a frequent occurrence since 2010.
Having returned from India last week on my first foreign visit as lord mayor, I concur that more needs to be done to strengthen our economic ties with emerging markets. My five-day visit to New Delhi and Mumbai consisted of a whirlwind series of meetings with ministers, regulators and the central bank, interspersed with speeches and productive round-table meetings.
The objective was simple: to share our experience of the global business world for the mutual benefit of India and the City.
Since Prime Minister Narendra Modi came to power in India this year, we have seen his ambitious and visionary economic reform plans go beyond the old party politics, focusing instead on the new “Made in India” agenda. Along with finance minister Arun Jaitley, whom I met twice during last week’s visit, Modi has set out clear plans to convince investors of India’s seriousness as a global economic force.
Despite being ranked a lowly 142 out of 189 in the World Bank’s Ease of Doing Business report, the impression I got was that Modi is determined to improve on this. Reforming labour laws, cutting trade red tape, streamlining the process of setting up a business, simplifying corporate law, and liberalising the insurance market (as we saw with the proposals last week to increase the foreign equity cap in the sector from 26 per cent to 49 per cent) are all signs of this effort.
And as India looks to raise more capital, the City of London, as the leading financial centre in the world, stands ready and willing to support these changes. We are already the biggest investor in India, and our bilateral trade is worth £16bn a year – but this can be improved upon.
As the government, regulators and Reserve Bank of India move away from a model of state bank loans for financing, there is going to be an enhanced role for the corporate bond market. This was a key aspect of my meetings in Mumbai and Delhi last week, where I championed the expertise and experience of our firms in the UK, emphasising all that we can offer the country.
As a nation, we will only succeed if we contribute to the success of fast-growing emerging markets. Fortunately, London-based capital markets professionals like me are born realists. We know that the future success of our own economies is intertwined with today’s new global forces. Clearly there is more to do in building stronger economic ties between our two countries.
However, having quizzed key Indian ministers and officials in a week of meetings, I believe that our partnership with this rising economic giant is being reinforced – for the benefit of us all.
Alan Yarrow is lord mayor of London.