Interview with: Hindustan Times
Read the interview in full here.
I was pleased to hear the United Kingdom (UK)’s Chancellor Rachel Reeves use her pivotal growth speech this month to announce the restart of the UK-India free trade agreement (FTA) talks. Wherever trade is liberalised, stronger partnerships and ease of business follow. We, in the City of London. have always called for more liberalised trade with our partners, especially India, given our strong historic ties.
There are huge opportunities for services in a UK-India FTA, and the resumption of talks is part of the UK government’s wider mission to drive economic growth through trade, innovation and foreign direct investment. India is a key player in all three aspects.
As part of my mayoral theme, Growth Unleashed, I am visiting the most exciting markets urging businesses and investors there to come to the UK. My message to leading banks and multinationals in Mumbai this week is that Britain is open for business, and there is mutual benefit to be had.
London’s leadership as a world financial centre is no secret. We have the world’s most dynamic risk management centre, with $159bn of insurance premiums written by the London Market making it the largest global hub. We have the second largest assets under management globally and receive the most financial services foreign direct investment in Europe. I say to the Indian renewable energy firms and tech companies driving growth: Come to London. If you want to raise equity, come to London. If you want to insure yourself against catastrophe, come London. If you want to raise debt, come to London.
Political stability is a prerequisite for growth. The UK has a world-renowned legal framework, well-respected regulatory environment and favourable time zone. The government has ambitions for closer European Union ties and strengthening trade globally underpinned by a strong mandate for economic growth. We are seeing that through the establishment of a new and bolstered Office for Investment to support foreign companies coming into the UK, the new growth mandate to regulators across sectors and the tranche of pension reforms to drive investment into UK infrastructure.
These measures send a strong signal to Indian businesses that the UK is open for business and is a premier investment location, as PwC also found in their latest CEO Survey confirming the UK as the second most-favoured destination for investment – trailing only the United States.
There are similar positive signals on the India side. Minister of finance Nirmala Sitharaman’s budget announced that the bilateral investment treaty (BIT) will be revamped which will take steps to address investment protection. In addition, the budget also outlines plans to raise the foreign direct investment (FDI) limit for the insurance sector from 74 to 100%. This is a win for the many large speciality insurance and reinsurance firms in the UK seeking to further expand their services into India.
It is clear to see the exciting prospect on offer of further liberalised trade between the UK and India. Just last year, the UK’s trading relationship with India was worth £42bn and supports over 600,000 jobs across both countries. Together, we can be doing so much more.
Whatever the final stages of the FTA agreements entail, the UK’s intent is clear. India matters, hugely. Growth is the mission for the UK and India is an irreplaceable partner.
Strong global trade has been at the epicentre of economic growth, opportunities and prosperity for thousands of years. Barriers to this trade almost always lead to inflated prices, hurt jobs, slow growth and damage supply chains. As Franklin Roosevelt knew, tariffs were ‘a road to ruin’. And in most instances, the costs of tariffs fall heaviest on consumers in the country that has imposed them. When free trade encounters friction, everyone loses.
Our close friendship with India is based on so much more than just business. History and culture, along with shared ambitions, bind us together in common pursuit. It is vital that we reaffirm that message as often and as loudly as possible during the months ahead and seize the opportunity the FTA presents to us.