Cameron demands India opens up economy to City

DAVID Cameron yesterday called on India to open up its economy to British banks and insurers, in return for relaxing UK visa rules for executives from the subcontinent.

But the Prime Minister faced difficulty as he waded into the debate over two troubled defence contracts and tried to convince India to hand major infrastructure contracts to British businesses. “Britain is an open economy and we encourage that investment,” Cameron said in New Delhi. “I think, in return, we should be having a conversation about opening up the Indian economy, making it easier to do business here, allowing insurance and banking companies to do more foreign direct investment.”

The Prime Minister is in the country with a 100-strong trade delegation, as well as four ministers and nine MPs, in the hope of boosting business links with one of the world’s fastest growing economies.

Yesterday he unveiled plans to allow Indians to receive a same-day visa if they want to visit the UK on business by streamlining the existing bureaucracy-heavy process.

However large state-backed contracts remain the top prize. Cameron continues to argue that India should reconsider its decision to order 126 French-built Rafale fighter jets in favour of the part-British Eurofighter, which he calls “a superior aircraft”.

It appears that the UK is just as likely to lose a major defence contract with the Indian government. On Friday New Delhi said it wanted to cancel a £480m deal to buy a dozen helicopters from Anglo-Italian business AgustaWestland, which has a major manufacturing base in Yeovil, over allegations of bribery which have resulted in the arrest of the company’s chief executive Bruno Spagnolini.

The Prime Minister insisted the manufacturer was an “excellent company who make brilliant helicopters” and said Britain’s Serious Fraud Office would decide whether to investigate the allegations.

Cameron also said he wanted British businesses to help develop the corridor between Mumbai and Bangalore, as wants the rules on the operations of foreign chains to be relaxed – paving the way for businesses such as Tesco to expand in the country.

Representatives of major firms such as BP, BAE Systems and the London Stock Exchange are also on the trip.