Migrant row overshadows Indian deals
DAVID Cameron yesterday smoothed the way for a flurry of deals with India on a trade mission to the emerging superpower, but simmering tensions over plans to cap immigration in Britain threatened to turn into a full-scale row.
The Prime Minister is leading a 90-strong delegation, which includes top business figures like Barclays boss John Varley and London Stock Exchange (LSE) chief Xavier Rolet, in a bid to improve economic ties with the region.
Yesterday, BAE Systems and engine maker Rolls-Royce signed a £700m deal to build 57 Hawk training jets to train pilots in the Indian military. Around £500m will go to BAE and £200m to Rolls-Royce.
The LSE signed a pact with India’s National Stock Exchange (NSE) which promised closer cooperation. Both said they would explore the possibility of linking the FTSE 100 Index to the NSE, while the NSE would in turn license its Nifty 50 Index for trading options and index contracts in London.
And Xchanging said it would spend £4m to build a processing centre in Karnataka, while construction giant JCB is expected to unveil a deal today. Cameron also said he would remove barriers that stop Britain exporting civil nuclear technology India, opening the way for Serco, Amec and Rolls- Royce to win business in the region.
The string of deals was overshadowed by an escalating row over plans to impose a cap on
non-EU economic migrants, which has become a hot-button issue in India, where politicians and businessmen say it amounts to a fear of protectionism. They are worried it could stem the flow of opportunities that are currently available to high-flying Indian graduates.
Vince Cable, the Liberal Democrat business secretary that argued for an amnesty on illegal immigrants in the run up to the election, exacerbated the situation by repeating his opposition to a cap. And he said he wanted the regulations to be administered with a “light touch” when they come in. An aide to home secretary Theresa May, who is responsible for immigration, said: “The Prime Minister has set out what the policy is. Last time I checked, he was in charge of the government – not Vince Cable.”
A NEW ORDER IN ANGLO-INDIAN RELATIONS
WHEN George Osborne rung the bell at the Bombay Stock Exchange, he was trying to ring the changes in Anglo-Indian relations. He said negotiations over an EU-Indian free trade agreement, which have entered their fourth year, needed to be concluded – and fast: if a deal is struck, it could be worth €4.5bn (£3.7bn) to the regions by 2020. Although the chancellor was on a charm offensive, he reminded the hosts this was a two-way street.
He wants to smooth the way for British banks and insurers to enter the emerging superpower, and reminded the Indians they had promised to raise a cap on foreign investment from 26 per cent to 49 per cent. Aides to Osborne say this is all about boosting exports and inward investment, fitting with the oft-repeated intention of aiding a private-sector recovery. India is already Britain’s biggest manufacturing employer (Tata has 47,000 UK employees), but Osborne wants them to buy more of our goods and services. He has his work cut out, however: a younger generation of Indian high-flyers see America – not Britain – as the real place to forge economic ties. An immigration cap in the UK is unlikely to change their minds. By David Crow