Chancellor’s statement on the UK-India Economic and Financial Dialogue

Statement by the Chancellor of the Exchequer.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon George Osborne

I am pleased to welcome Finance Minister Mukherjee to London.

It is almost a year ago to the day that Prime Minister David Cameron led Britain’s largest ever trade delegation to India. That was our first major overseas visit as a Government.

So I am pleased that one year on today’s dialogue is taking place against the backdrop of ever greater trading ties between our two countries.

I am pleased some of the leading business people from both our countries will be joining us today.

It is also taking place against the backdrop of considerable economic uncertainty across the globe - and we discussed the risks around these for both our countries.

But while there are of course risks to current and future growth - we also discussed the many opportunities for future growth for both our countries from greater ties between us.

Today’s dialogue confirmed billions of pounds of trade deals between British and Indian companies.

I particularly welcome the Indian Government’s approval ahead of our discussions today of the alliance between BP and Reliance in Indian oil and gas. This is the single largest foreign investment in India.

This is a strong two way relationship - I am pleased too that Essar Energy will be investing in the UK energy sector, and that UK banks were central to delivering $1.5 billion in financing for the deal.

Overall Britain is now the largest source of foreign investment in India.

Our trading relationship is not only becoming broader but deeper. We are also confirming today a number of smaller in scale but significant in deals between other British and Indian firms.

In total over 3,000 British firms are now investing in or planning to invest in India.

Both Finance Minister Mukherjee and I agreed that we want to see that number and our total trade rise significantly. And we focused our discussions on the strategic issues to support this.

We agreed that we would work together to take action to manage the risks the global economy currently faces.

Both our countries are facing the pressures from significant rises in global commodity prices.

And the current instability in parts of the global economy, but also the wider risks in developed and emerging economies have created wider economic uncertainty.

So we both agreed on the importance of strong domestic policy to promote growth and ensure confidence as a starting point. In Britain, we are committed to our fiscal consolidation plans - and I know so is India. These steps will strengthen the resilience of our economies and create the room for stronger private sector led growth.

But we also agreed on the importance of strong, coordinated international action. We agreed the G20 must deliver a concrete action plan for securing a strong and balanced global recovery, with country specific actions to achieve strong, sustainable and balanced growth. And we agreed the IMF should strengthen its surveillance to deliver a consistent and even-handed approach to identifying and addressing risks to the global economy.

But we didn’t just talk about risks, there are also untapped growth opportunities. 

Central to this is agreeing the EU-India Free Trade Agreement by the end of the year. We should not let negotiations flounder as we work towards an ambitious agreement which will unlock significant trade and investment opportunities.

As well as a wider European agreement on trade, we also focused on a number of bilateral issues.

We welcomed the launch of India’s new infrastructure fund as a route for channelling private financing towards India’s target of $1trillion of investment. I am pleased UK firms, large and small, are winning business to meet this growing demand.

We discussed how we can work together to meet India’s growing demand for world class education. UK universities and skills services providers have much to offer. We discussed the steps needed to increase private sector involvement.

Finally, we also discussed how we can deepen further the relationship between Britain and India in financial services. Britain already has the biggest international presence in Indian financial services.

I discussed with Minister Mukherjee the importance of India putting in place a new wave of financial reforms to support growth and deliver the long-term financing for infrastructure development.

The breadth and depth of today’s talks reaffirmed the strength of our relationship and I look forward to working closely throughout the year and the next round of talks in 2012.

Published 25 July 2011