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UK Congratulates India On GST, Calls It An Ambitious Tax Reform
BW Businessworld talks to Amo Kalar, Deputy Director - Trade, Economics and Prosperity, India British High Commission to throw light on impact of GST on Indo-UK trade relations, future of bilateral ties between the two countries and the impact of the recent terror attacks on the British economy
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The Indo-UK trade relations go back a long way. The United Kingdom has been the largest G20 investor since 2000. PM Theresa May made India, her first destination for visit after the European Union in November last year. With the turmoil going on the British soil, and the biggest change in India's tax regime (GST), BW Businessworld talks to Amo Kalar, Deputy Director - Trade, Economics and Prosperity, India British High Commission to throw light on impact of GST on Indo-UK trade relations, future of bilateral ties between the two countries and the impact of the recent terror attacks on the British economy.
What will be the impact of GST rollout on the Indo-UK trade?
The UK has a strong trade and investment relationship with India. The GST is a very ambitious tax reform and we congratulate the Indian Government on its vision. We are excited about the potential the GST brings in terms of simplifying processes, reducing red tape, and increasing growth. PM May and PM Modi signed a MoU on cooperation on ease of doing business last year and tax administration was an important pillar of this.
With increasing focus on bilateral trade treaties in various countries, what do you think are the prospects of a U.K.-India FTA ties?
As the UK leaves the EU, we will enhance our global role and seek new opportunities to deepen our ties with countries across the world. India is a central part of that vision. We want the closest possible economic partnership with India - expanding our £16 billion worth of bilateral trade, generating jobs and developing skills. The UK is the G20's largest investor in India, and India invests more in the UK than it does in the rest of the EU combined.
What are the roadblocks between the further strengthening of ties between the two countries?
Far from identifying roadblocks, our ties are motoring ahead. Our countries are linked by a living bridge between people, ideas, innovation, science and commerce. Over 1.5bn people of Indian descent live in the UK and are leaders in politics, business, sports, culture and all other fields. London is becoming an increasingly important source of funding for Indian infrastructure projects via the issuances of Masala Bonds. We are celebrating the India-UK Year of Culture this year, bringing together artists, writers and musicians from all walks of life. And, contrary to what you read all too often, the numbers of visas issued to Indian professionals, business people, tourists and students are surging.
What are some critical advantages and disadvantages of Brexit on UK's ties with India?
There are many opportunities for the UK to work even closer with India and we are determined to make the best of them.
We are committed to partnering with India on key projects like Make in India, Digital India, Skill India and creating smart cities. Prime Minister Theresa May led her first overseas trade mission, leading 40 British companies to India in November 2016. Her first trade mission resulted in £1.2 billion worth of business.
We are a country partner in developing Pune, Indore and Amravati as smart cities. We are already "Making in India" through, for example, JCB and Airbus. The UK is the largest exporter of financial services in the world and India can use our expertise and experience in this field to support the burgeoning demand for a cashless economy.
The Duke and Duchess of Cambridge launched the Tech Rocketship Awards in April 2016 for tech start-ups in India. The awards provided promising Indian start-ups with expert business advice and support from leading professional services companies in the UK. Through this campaign, the UK is deepening our support for PM Modi's 'Start-Up India' campaign. Ten winners of the competition concluded their business trip to the UK in January and two of them have already secured venture funding for their projects from the Indian Angel Network. We are launching the competition again in August this year which is open to Indian tech startups that have global ambitions for their business.
Which companies in the UK are investing in India's renewable energy drive project, what are the advantages for the UK in the same?
British Secretary of State for Business Energy and Industrial Strategy, Greg Clark, visited India in April this year to participate in the first-ever Energy for Growth Dialogue between the two countries. He discussed energy finance with Minister Piyush Goyal and promoted opportunities in the Indian market. He announced up to £20m of additional technical assistance funding under the Energy for Growth partnership to support priority areas for collaboration on power, renewables, energy access and efficiency and oil and gas. The UK has agreed its priorities will include helping India's power sector companies introduce smart technology to improve performance and reduce losses; support for increased energy efficiency; and work to accelerate deployment of renewable energy including through support at the state level on planning for renewable energy. India is also looking at new instruments for raising finance such as green masala bonds on the London Stock Exchange as well as significant commercial investments in oil and gas and growing investment in renewable by UK companies.
We have had investments in tech renewable sector from Lightsource Renewable Energy Holdings, who announced a £2 billion investment in India. They will design, install and manage around 3 gigawatts of solar power infrastructure in India over the next 5 years. This investment will create an expected 300 jobs and £42 million of revenue in the UK and benefit hundreds of families in India.
British smart grid companies like Sensus, Cyan Technologies and Smarter Grid Solutions have also invested in India.
How has the recent terror attack spree impacted the Trade, for travel and tourism?
We were very grateful for the messages of support from our Indian friends following the recent attacks. No country is free from the scourge of terror. As the Prime Minister, Theresa May, said recently, the UK is reviewing its counter-terrorism strategy to make sure the police and security services have all the powers they need.
In the meantime, trade and investment between the UK and India go from strength-to-strength and tourists are continuing to visit the UK in record numbers. We cannot and will not allow terrorists to destroy our way of life.
How has the prolonged uncertainty in Brexit impacted the trade in Britain?
We continue doing business with the world. Our exports are performing strongly at £547.6bn in 2016, up 5.8 per cent compared with 2015. We are the largest exporter of financial services in the world. The UK exported £63.7 billion worth of financial services in 2015, and the trade surplus in financial services was £54.8 billion.
The UK remains a great place to do business and remains fully open for business. The Department for International Trade recorded a record-breaking number of FDI projects coming into the UK in 2015-16 at 2,213, up 11 per cent compared to 2014-15. The UK leads Europe in attracting Foreign Direct Investment and is the third in the world for inward FDI stock, just behind the USA and China (including Hong Kong). Inward investment into the UK is estimated to have created over 82,600 new jobs in 2015-16.
We have maintained and improved our position as a global innovation super-power ranked amongst the top 5 in the world ahead of Germany and Singapore.