Philip Hammond: Britain and India will show the world the true benefits of free trade and open markets

Philip Hammond
The total number of people employed by British companies in India currently stands at 788,000 – representing an astonishing one in 20 private sector jobs (Source: Getty)

As we begin preparing to set our own trade terms for the first time in 40 years, Britain is ready to breathe new life into its relationship with the rest of the world.

That’s the simple message I have taken with me to India this week.

In Delhi I spoke to Finance Minister Arun Jaitley about the triggering of Article 50 last week, which will open up a new and exciting chapter for our country – a chapter built on stronger relationships with our traditional friends and allies.

We will be a Global Britain that is confident, ambitious and tolerant and a Britain that can make its own decisions; build new economic partnerships and work on a one-to-one basis with nations like India. Opening the doors to new opportunities for our country, with enhanced business relationships, new job opportunities in this country and new ventures between British and Indian companies.

The rhetoric of last year’s referendum campaign was not a rhetoric of isolation. Quite the opposite: it was an insistence of bigger and better engagement with the world, not just with our European friends and neighbours, but with everyone beyond those borders too.

Read more: Britain can lead the world in free trade – by keeping trade deals simple

The Prime Minister has emphasised constantly over the last nine months our continued support for free trade, open markets and an expanded engagement with the outside world.

Nowhere is this more relevant than India, whose economic transformation has been nothing short of remarkable. This year India is forecast to grow at 7.2 per cent and the IMF forecasts it to be the fastest growing economy in the G20 next year as well – a credit to the reforms that Prime Minister Modi and Finance Minister Jaitley have put in place.

As well as our annual talks on economic and financial cooperation, I have been laying the groundwork for the time, not too far distant, when we will be able to negotiate our own trade agreements.

Our bilateral relationship today is strong and broad-based and it is underpinned by what Prime Minister Modi has called a “Living Bridge” of 1.5m people of Indian origin who live in the UK. We are major investors in each other’s economies – over the last decade, no G20 country has invested more in India than the UK. We are the largest job creator via foreign direct investment in India, in fact.

From Marks & Spencer, now one of the largest international retailers in India with a presence across 18 cities with 49 stores, to BP – the largest international oil company in India, employing around 8,500 people – British companies have played an important role in the growing Indian economy.

Read more: UK boosts position as largest investor in India

Between 2000 and 2016, British investment in India helped to create 371,000 jobs and the total number of people employed by British companies in India currently stands at 788,000 – representing an astonishing one in 20 private sector jobs.

And in turn, Indian firms have a strong record as investors in British industry, with perhaps the most high-profile being Tata’s successful management of Jaguar Land Rover, but there are many more opportunities available.

I am representing Britain, alongside the Bank of England Governor and other ministers, at the ninth India-UK Economic and Financial Dialogue in Delhi where our world leading finance sector will be in sharp focus.

The UK is perfectly placed to be India’s financial partner of choice, helping it to raise the finance needed for its continued rapid growth, and my message is “Make in India, finance in the UK”.

There have already been more than 37 Masala Bonds issued on London Stock Exchange – and only last Friday HDFC issued its largest masala bond, raising £400m. Finance Minister Jaitley and I have confirmed a new partnership under the National Investment and Infrastructure Fund, in which we will work together to leverage City of London investment into India’s rapidly growing energy and renewables market.

Read more: Why India holds rich opportunities for the City

We believe that the UK’s position as a global finance hub, our plans to build a truly Global Britain as we leave the EU, and India’s own ambitious growth aspirations make an unbeatable combination to help us take our relationship to the next level.

The UK is already the world’s largest exporter of financial services and the leading centre for fintech, and there are enormous opportunities for Britain and India to collaborate in both areas, which is why I will be addressing the India-UK Fintech Conference in Mumbai today, along with a delegation of British leaders in financial services and fintech.

With us we bring this message: as the world’s oldest democracy and the world’s biggest democracy, who better to show the world the true benefits of free trade and open markets than Britain and India?

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