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High Commission of India

London

(Economic & Commerce Wing)

Brief on India-UK Bilateral Economic Relations

I. Background: India-UK Economic and Commercial Relations

The UK and India remain committed to working together to substantially increase trade

and investment opportunities. During the visit of Shri Narendra Modi, Hon’ble Prime

Minister to the UK during November 12-14, 2015, the Prime Ministers of both India and UK

agreed at the India-UK Summit 2015 to continue working towards strong, sustainable and

balanced growth, and agreed on the importance of structural reforms and pursuing credible

fiscal policies in order to raise living standards. The two leaders hailed the strength of the

economic partnership between India and the UK: India already invests more in the UK than

in the rest of the EU combined, and the UK is the largest G20 investor in India. Both sides

committed to further strengthening the economic relationship, including through deepening

the bilateral trade and investment relationship.

At the last India-UK summit held in New Delhi on February 19, 2013, the Prime

Ministers of India and the UK reviewed the progress made since the previous Summit in July

2010 on building a stronger, wider and deeper relationship across the range of India-UK

interests, based on shared culture, values and strategic interests. They agreed that, while

substantial progress had been made on the ambitious targets set in 2010, there was

considerable potential for expanding the relationship further, in particular in the area of trade

and investment, and they agreed on the importance of an approach which supported business.

The UKPM visited India for a second time on November 13-14, 2013. This was the third visit

of UKPM in three years since 2010. The PM was accompanied by a small business

delegation to further increase the opportunities on offer to help British businesses succeed

abroad.

India-UK Summit 2015 – Trade and Economic Engagement

Shri Narendra Modi, Hon’ble Prime Minister visited the UK during November 12-14,

2015. On November, 12, 2015, the Hon’ble Prime Minister held delegation-level talks with

the UK Prime Minister David Cameron and both the Prime Ministers released a Joint

Statement of the India-UK Summit in London.

The two Governments underlined particular importance of IT, digital industries towards

strengthening trade ties. It was agreed that the City of London would play an important role

in channelling investment into infrastructure projects in India including in railways sector. A

long term strategic partnership that leverages capital and expertise of City of London to

finance India’s rapid growth was also agreed upon. The Government of India’s intention to

launch the first government-backed rupee bond in London was also announced. Setting up of

an India- UK partnership fund under the umbrella of National Infrastructure Investment Fund

(NIIF) was also announced. Creation of new Chevening Financial Services course for mid-

career professionals and India’s first Low Income State Infrastructure Equity Partnership

were also launched with the aim to provide equity partnerships for small infrastructure

development in sectors like water and sanitation, clean energy and urban infrastructure.

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UK welcomed Government of India’s ‘Make in India’ initiative and both the leaders

welcomed the initiatives taken by both sides to deepen defence technology and industry

cooperation. 9.2 billion pounds of commercial deals between the UK and India was

announced during the visit.

The leadership of two countries also announced three UK-India city partnerships with

Indore, Pune and Amaravati to support India’s ambitious urban development goals through

technical assistance, expertise sharing and business engagement. A new Thames/Ganga

partnership for healthy river systems - a collaborative programme of research and innovation

to enable the sustainable management of water resources in the Ganga basin and a policy

expert exchange in 2016 supported by the UK Water Partnership was also launched.

India-UK Vision statement

During the visit of the Hon’ble Prime Minister of India to the UK in November 2015, a

Vision Statement between India and the UK was released. The vision statement envisages

investments in skills and creation of high quality jobs, infrastructure, promotion of

manufacturing & research, technology & innovation and partnering in making the rivers

cleaner, habitats healthier and build smart, sustainable cities for a low carbon future.

India-UK Joint Statement on Energy and Climate Change

During the visit of the Hon’ble Prime Minister of India, to the UK in November 2015, an

India-UK Joint Statement on Energy and Climate was released. The statement envisaged to

strengthen the existing energy partnership between India and the UK, resolved to address

climate change and promote secure, affordable and sustainable supplies of energy, reduce

greenhouse gas emission and to work together for a comprehensive Agreement under the

UNFCCC at the Paris Climate Conference in December 2015. It welcomed successful

conclusion of negotiations on a bilateral Civil Nuclear Co-operation Agreement

announcement of a £10 million five-year programme of technical assistance to support

national and state-level reforms in India’s power sector, joint funding for a new virtual Joint

Centre on clean energy etc.

India-UK CEOs Forum

During the visit of the Hon’ble Prime Minister to the UK in November 2015, the

reconstituted India-UK CEOs Forum was held on November 13, 2015 at 10, Downing Street,

London. In his opening remarks, UKPM David Cameron referred to Hon’ble Prime

Minister’s vision and intent for transforming India. In his address, Hon’ble Prime Minister

spoke of the historical ties and complementarities between the two countries. Hon’ble Prime

Minister said that economic ties are extremely important elements of the relationship between

countries. He referred to the Union Government's initiatives such as "Make in India",

emphasis on infrastructure, opening up of FDI in various sectors, and commitments towards

50 million new houses by 2022 and 175 GigaWatts of renewable energy. He said investment

by British companies in India would be a win-win partnership for both countries.

Business leaders from both India and the UK signalled their commitment to improving

trade, investment and economic collaboration during the India-UK CEOs Forum. The

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business members of both India and the UK identified the below 6 overarching themes as

important areas of collaboration to take forward:

• smart cities and the digital economy

• healthcare sector

• education and skills

• engineering

• defence and security

• financial and professional services

List of Memorandum of Understandings (MoU)s signed/announced during and

following the visit of Hon’ble Prime Minister of India, to the UK in November

2015

a) A Joint announcement by India and the UK was made on setting up a FAST-TRACK

system for UK companies in India. The FAST-TRACK system will be operational by

the end of March 2016. It will be set up in the Department of Industrial Policy and

Promotion (DIPP), Ministry of Commerce and Industry. The key objectives of the

FAST-TRACK system will be to pave the way for, and identify and solve problems

faced by UK companies and investors with their operations in India.

b) An MoU was signed between the Ministry of Railways, Government of India and the

UK Department for Transport on Technical Co-operation in the Rail Sector.

c) Indo U K Healthcare Pvt Ltd and King’s College Hospital NHS Foundation Trust and

signed an agreement to open King’s College Hospital in Chandigarh.

d) London Stock Exchange Group and Yes Bank signed an MoU to foster joint

collaborations on bond and equity issuance, with a strong focus on Green

Infrastructure Finance. Both financial institutions will leverage their complementary

strengths to facilitate access to capital raising in London and India for Indian entities

and will work jointly on the development of a wide range of new products.

e) The largest Solar PV generator in the UK and Europe, Lightsource are announcing 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. This will be achieved by partnering with a number of

Indian companies, the first of which is Srei Infrastructure Finance Limited, associated

in financing, development and advisory functions.

f) Indiabulls Housing Finance Limited (IHFL) has invested £66 million into OakNorth

Bank Limited, a recently authorised bank providing lending to UK entrepreneurs and

small business owners. The equity investment will allow OakNorth to increase

lending to UK growth SMEs to over £0.5 billion, supporting entrepreneurs, creating at

least 150 new jobs in London and Manchester and driving GDP growth in the UK

economy.

g) Vodafone announced a range of further investments in India totalling £1.3 billion

(INR 13,000 crore) to support the Government of India’s campaigns on “Digital

India” and “Make in India”. Vodafone will invest £800 million (INR 8000 crore) to

enhance, upgrade and expand its country-wide network coverage; £300 million (INR

3000 crore) in its high-end technology centres in Pune and Ahmedabad, which service

several international markets, creating a further 6,000 Indian jobs - thus exemplifying

“Make in India for the world”.

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h) An MoU was signed between Reserve Bank of India (RBI) and Prudential Regulation

Authority (PRA) on supervisory co-operation and exchange of information with

overseas banking regulators/supervisors.

II. Bilateral Institutional Mechanisms:

1. India-UK Joint Economic and Trade Committee (JETCO)

The JETCO was established on January 13, 2005 to develop a strategic economic

relationship following the Joint Declaration “India-UK towards a new and dynamic

partnership” between former Prime Ministers of the two countries in September 2004. The

JETCO has been conceived as a business driven institutional framework to enhance trade and

investment between the two countries. Establishment of the JETCO gave a vibrant upward

direction in the India-UK economic partnership. The JETCO delegations meet annually under

the leadership of the Minister of Commerce and Industry (CIM) and the Secretary of State for

Business, Innovation and Skills (BIS) alternating in both capitals.

The 10th JETCO meeting was held on January 19, 2015 in London. Smt Nirmala

Sitharaman, Hon’ble Minister of State for Commerce & Industry, Government of India led

the Indian delegation. Rt Hon Vince Cable, former UK Secretary of State for Business,

Innovation and Skills led the UK side. The meeting saw both industry and government come

together for productive discussions in the three Working Groups constituted on the themes of

Education & Skill Development, Smart Cities and Technological Collaboration, Advanced

Manufacturing and Engineering. The two Ministers attended the JETCO plenary session

where the outcomes of the discussions held by the three working groups were presented by

the respective co-chairs.

The Education and Skill Development Working Group agreed to focus on six on-

going areas - industry interfacing, integration of vocational skills in education, capacity

building, action research, cross sectoral collaboration and the skills fund. Mutual recognition

of qualifications and creation of structured pathways between institutions and levels,

framework to framework mapping, the India-UK Skills Pledge and centres of excellence

were also taken forward as specific action points. The Smart Cities Working Group agreed to

focus on the Infrastructure Finance; exploring a model which empowers the local authority

while exploiting opportunities presented by carbon reduction; Good governance and best

practice standards as applied to smart city frameworks; arrange a follow up business to

business workshop in India to look more closely at the key themes and issues that have

emerged around integrated planning and sectors in a nominated city/town, using real life

examples; Work with the education and skills working group to identify skills gaps and

mobilise skills training providers and higher education institutions to address the skills gap.

The Technological Collaboration, Advanced Manufacturing and Engineering Working Group

agreed to expand the Tool Rooms initiative, develop and deploy training programs in system

engineering and design through government, academia and industry linkages.

The Hon’ble Minister and the former UK Secretary of State agreed to a regular and

on-going dialogue, including meetings of the Working Groups over the next year, in order to

implement the outcomes of JETCO in support of future UK-India collaboration. It was

decided that a meeting at official level will be held to review the progress before the next

edition of JETCO in New Delhi in 2016.

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It was agreed that the next meeting of the India-UK JETCO would be held in New

Delhi in 2016.

2. India-UK Economic and Financial Dialogue (EFD)

The India-UK Economic and Financial Dialogue (EFD) was officially established in

February 2005 through signing of an agreement between former Finance Ministers of the two

countries. This was in pursuance of the proposals set out in the India-UK Joint Declaration

signed by the Prime Ministers of India and UK in September 2004.

The objective of the Dialogue as reflected in the agreement is to strengthen the

financial and economic relationship between India and the UK, in the light of each country’s

economic policy agenda and within a global economic perspective. Among other issues, the

Dialogue will discuss sustainable economic development, structural reforms, reform of

financial systems and markets, improving regulatory frame-works and international

development.

Indian delegation led by Shri Arun Jaitley, Hon’ble Minister of Finance visited the

UK to participate in the 8th round of the Economic and Financial Dialogue (EFD) between

India and the UK on January 19, 2016. The 8th India-UK EFD co-chaired by the Hon’ble

Finance Minister and Rt Hon George Osborne, UK Chancellor of the Exchequer, explored

new areas of cooperation in financial services sector. The Dialogue covered discussions on

Global Economic Challenges, Macroeconomic Risks and Policy Responses, Infrastructure

Finance and Financial Services. A joint statement was issued after the successful completion

of 8th India – UK EFD.

3. India-UK Financial Partnership (IUKFP)

The India-UK Financial Partnership was launched at the 7th India-UK Economic and

Financial Dialogue held in Delhi on July 8, 2014. Shri Arun Jaitley, Hon’ble Finance

Minister of India and Rt. Hon. George Osborne, UK Chancellor of the Exchequer welcomed

the deepening of Financial Services links between the two countries and said that the

partnership will strengthen links between the Financial Services industries of both countries

and deepen cooperation between London and Mumbai, two of the World’s leading Financial

Centres. Mr Uday Kotak, Executive Vice Chairman and Managing Director, Kotak Mahindra

Bank and Sir Gerry Grimstone, Chairman, Standard Life were appointed as co-chairs of the

IUKFP representing India and the UK side respectively. It was decided that the Partnership

would focus on the following work-streams:

• Development of corporate bond market

• Mutual sharing of expertise on financial sector and market regulation

• Enhancing financial training and qualification

• Financial inclusion

• Cross-border provision of financial and insurance services

• Pensions

• Internationalization of the Rupee

• Infrastructure funding

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On November 2, 2015, the Co-Chairs convened a meeting held at the London Stock

Exchange. Policy insights and recommendations on the identified topics, aligned to

Government of India reform priorities, developed by senior private sector practitioners from

both India and the UK were discussed during the meeting. The policy discussion paper on

“India’s corporate bond market” focused on increasing the depth of the bond market to

finance infrastructure needs as well as making it easier for Indian companies to issue bonds

overseas. The Policy paper on “Pension infrastructure” focused on recommendations based

on the UK experience in following three areas that support the development of the pension

industry in India:

Increasing coverage and providing good advice

Designing optimum products (balancing quality and cost) and standardizing them

Delivering strong and cost-effective governance model by simplifying tax

structure

The Policy paper on “India’s insolvency regime” recommended quick and efficient

insolvency process that not only prioritizes secured creditor rights but also ensures adequate

protection to other creditors. The Co-Chairs decided to place the recommendations of the

IUKFP meeting before the Economic and Financial Dialogue (EFD) scheduled to be held on

January 19, 2016. The meeting was also attended by Shri Shaktikanta Das, Secretary,

Department of Economic Affairs and Shri Chandan Sinha, Executive Director, Reserve Bank

of India.

Notable visits from India to UK in 2016

Shri Piyush Goyal, Hon’ble Minister for Power, Coal, New & Renewable Energy

visited London on April 19-20, 2016 to strengthen India-UK collaboration on power and

renewable energy. The Minister was accompanied by an official delegation which included

Secretary, Ministry of New and Renewable Energy, Joint Secretary, Ministry of New and

Renewable Energy, Director (Technical), IREDA and a 9 member business delegation.

During the visit, the Minister held bilateral meetings with Lord Bourne, UK Minister for

Energy and Climate Change, Lord Jim O’Neill, Commerce Secretary to the Treasury and Mr.

Nick Hurd, Minister, Department of International Development. The Minister also

participated at an Investors Round Table on Renewable Energy organised by the

Confederation of Indian Industry, a Roundtable on Financing for Renewables and Energy

Efficiency at the City of London Corporation and an Investors Meet at the London Stock

Exchange.

Smt Nirmala Sitharaman, Hon’ble Minister of State for Commerce & Industry,

Government of India visited the UK on March 31, 2016. During the visit, The Minister met

with Rt Hon James Brokenshire, Minister of State for Immigration to express concerns about

the UK Government’s intention to accept recommendations of UK Migration Advisory

Committee (MAC) on reviews of Tier 2 visa policy.

Shri N Chandrababu Naidu, Hon’ble Chief Minister of Andhra Pradesh visited the

UK on March 11-12, 2016.

Shri Debi Prasad Mishra, Hon’ble Minister for Industries and School & Mass

Education, Government of Odisha visited the UK during February 03-09, 2016.

Shri Arun Jaitley, Hon'ble Minister of Finance, Corporate Affairs and I & B,

Government of India visited the UK during January 17-19, 2016 for the 8th India-UK

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Economic & Financial Dialogue (EFD). Hon’ble Minister was accompanied by Shri Ajay

Tyagi, Additional Secretary (Investment), Shri S. Selvakumar, Joint Secretary (ABC), Mr.

Harun Rasid Khan, Deputy Governor, Reserve Bank of India and Shri Simanchala Dash, PS

to the Hon’ble Minister. The Hon’ble Minister attended the India-UK Financial Partnership

CEOs luncheon meeting held at 11, Downing Street. UKIBC, Goldman Sachs, MasterCard,

London Stock Exchange and Kotak Mahindra Bank / Confederation of India Industry. The

Hon’ble Minister also had a separate interaction with select group of Persons of Indian

origins (PIOs) associated with India-UK businesses.

Notable visits from India to UK in 2015

Shri Narendra Modi, Hon’ble Prime Minister of India visited the UK during

November 12-14, 2015. On November, 12, 2015, the Hon’ble Prime Minister held

delegation-level talks with the UK Prime Minister David Cameron and both the Prime

Ministers released a Joint Statement of the India-UK Summit at a Press Conference in

London. During his visit, PM addressed the members of the British Parliament at the Houses

of Parliament. On November 13, 2015, PM along with the UKPM attended the India-UK

CEOs Forum held at 10, Downing Street. PM also addressed the business community of the

City of London, at Guildhall. During the visit, Her Majesty Queen Elizabeth, Head of State of

the UK hosted a lunch for PM at the Buckingham Palace. During the visit, PM also addressed

a massive gathering of the British-Indian Community at the Wembley Stadium in London.

On November 14, 2015, PM visited the manufacturing unit of the Tata owned Jaguar Land

Rover (JLR) located at Solihull, UK. On the sidelines of the visit, PM paid homage at the

statue of Mahatma Gandhi in Parliament Square, unveiled a Basaveshwara Statue at Lambeth

in London and inaugurated the Dr. Ambedkar Memorial at King Henry's Road in London.

Shri Suresh Prabhu, Hon’ble Minister of Railways, Government of India visited the

UK during October 29-30, 2015. The Minister was accompanied by Mr Rajiv Datt, Managing

Director, Indian Railways Finance Company. During his visit, the Minister participated in the

High level Investors’ Roundtable chaired by Rt Hon Oliver Letwin, attended the

Roundtable. The Minister also held meetings with UK based investors for infrastructure

investment discussions. During his visit, the Minister visited the office of First Group,

leading transport operator in the UK and took a tour of two of London’s biggest Railway

Stations – Paddington and King’s Cross. During his visit, the Minister participated in the

investors Roundtable at the London Stock Exchange.

Hon’ble Chief Minister of West Bengal Mamata Banerjee visited the UK during July

26-29, 2015.The Chief Minister was accompanied by an official delegation including Dr

Amit Mitra, Minister of Finance; Shri Derek O’Brein, MP, Rajya Sabha; Shri Sugato Bose,

MP, Lok Sabha; Shri Deepak Adhikari, MP, Lok Sabha; Shri Sovan Chattopadhyay, Mayor

of Kolkata; Shri Sanjay Mitra, Chief Secretary and Principal Secretaries to the Government

of West Bengal in various departments. Apart from the official delegation, the Chief Minister

was also accompanied by a large business delegation, cultural delegation as well as media

from India. During the visit Hon’ble Chief Minister called on HRH Prince Andrew, the Duke

of York and met with Baroness D’Souza, Lord Speaker of the House of Lords and Rt Hon

Priti Patel, Minister of State for Employment.

Shri Piyush Goyal, Hon’ble Minister of State for Power, Coal and New & Renewable

Energy, Government of India visited the UK on May 22-23, 2015. During his visit, the

Hon’ble Minister met with Lord Bourne, UK Parliamentary Under Secretary of State,

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Department of Energy and Climate Change (DECC) and Baroness Verma, UK Parliamentary

Under Secretary of State, Department for International Development (DfID).

Shri Arun Jaitley, Hon’ble Minister of Finance, Government of India visited UK to

unveil the statue of Mahatma Gandhi in Parliament Square, London during March 13-14,

2015. The Finance Minister was accompanied by Shri Simanchala Dash, Private Secretary

and Shri Manoj Joshi, Joint Secretary, Department of Economic Affairs. During his visit,

Hon’ble Minister called on TRH Prince Charles, The Prince of Wales, Rt Hon David

Cameron, Prime Minister of the UK and held bilateral meeting with Rt Hon George Osborne,

Chancellor of the Exchequer.

Smt Nirmala Sitharaman, Hon’ble Minister of State for Commerce & Industry,

Government of India participated in the 10th India-UK Joint Economic and Trade Committee

(JETCO) meeting in London on January 19-20, 2015. Hon’ble Minister led the Indian

delegation which included Shri Dammu Ravi, Joint Secretary, Ministry of Commerce, Shri

Atul Chaturvedi, Joint Secretary, Department of Industrial Policy and Promotion (DIPP), Shri

R P Singh, Director, Ministry of Commerce and Shri Ashish Chatterjee, Private Secretary to

the Hon’ble Minister. On the side-lines of JETCO, Hon’ble Minister held bilateral

discussions with Rt Hon Vince Cable, former UK Secretary of State for Business, Innovation

and Skills.

UK Ministerial visits to India in 2016

Rt Hon Hugo Swire, Minister of State, Foreign and Commonwealth Office visited

India on May 30, 2016 to build on the successful visit of Indian Prime Minister to the UK in

November 2015.

Lord Mayor of the City of London Jeffrey Mountevans visited India from March 18-

23, 2016 as part of the UK’s commitment to boosting economic ties between the two

countries.

Sir David King, UK Climate Change Envoy visited India from March 15-17, 2016 to

strengthen UK-India collaboration on energy and climate.

Ms Harriett Baldwin, Economic Secretary to the Treasury and Mr Alok Sharma, the

UK Prime Minister’s Special Envoy visited India from February 15-18, 2016 to promote the

UK’s flagship collaboration with India on infrastructure financing.

Mr James Brokenshire, the Immigration Minister visited India from February 16

2016.

Mr Philip Dunne, the UK Minister of State for Defence Procurement visited New

Delhi on Thursday February 18, 2016 to boost the India-UK defence security partnership.

Rt Hon Priti Patel UK Minister for Employment and UK Prime Minister’s Indian

Diaspora Champion visited Ahmedabad, Kolkata and New Delhi during January 7-9, 2016.

During the visit, the UK Minister inaugurated the new British Deputy High Commission in

Ahmedabad, addressed at the inauguration of the Bengal Global Business Summit in Kolkata

and marked the launch of the new UK-India Skills Pledge in New Delhi.

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UK Ministerial visits to India in 2015

Rt Hon Sajid Javid MP, Secretary of State for Business, Innovation and Skills, and Jo

Johnson MP, Minister of State for Universities and Science visited India during December 9-

11, 2015. They visited New Delhi, Hyderabad, Bengaluru and Mumbai to meet Indian

students and faculty, and ministers in the central and state Governments to build on the

success of Hon’ble Prime Minister’s visit to the UK in November 2015, specifically in the

fields of higher education, skills and research co-operation. During the visit, the UK

Secretary launched the Midlands Engine initiative in New Delhi. The UK Secretary also

launched the 20th year of the Chevening Gurukul Fellowship Programme for Leadership and

Excellence, the United Kingdom Foreign and Commonwealth Office’s leading fellowship in

India. Mr Jo Johnson, launched the UK’s partnership of the 2016 Technology Summit and

KnowledgExpo along with Dr Harsh Vardhan, Hon’ble Minister for Science and Technology,

Government of India.

Rt Hon Amber Rudd, UK Secretary of State for Energy and Climate Change visited

India during September 22-23, 2015 to strengthen India and UK’s cooperation on energy and

climate change, and prepare for the visit of the Prime Minister of India to the UK later this

year. During her visit, Rt Hon Rudd met Shri Prakash Javadekar, Hon’ble Minister of State

for Environment, Forests and Climate Change and Dr Jitendra Singh, Minister of State in the

Prime Minister’s Office (PMO). The UK Secretary also met British and Indian businesses to

discuss the length and breadth of commercial opportunities that exist in clean energy and low

carbon technology.

Rt Hon Sajid Javid, UK Secretary of State for Business, Innovation and Skills visited

New Delhi on September 11, 2015 to attend the annual ‘UK India Business Convention’

organised by the UK India Business Council, with UK Trade and Investment, the British

Business Groups, and UK Export Finance.

Rt Hon Lord Francis Maude of Horsham, UK Minister of State for Trade and

Investment visited Bengaluru, Mumbai and Delhi during September 8-11, 2015. Lord Maude

along with Shri Siddaramaiah, Chief Minister of Karnataka laid the foundation stone of a new

GlaxoSmithKline (GSK) factory at Vemgal, Kolar (near Bengalaru). In Mumbai, the Minister

met key existing and potential investors in the UK, from Tatas to India Bulls. In New Delhi,

the minister delivered the keynote address to the UK-India Business Convention extending

his support for trade and investment between India and the UK.

Rt Hon Oliver Letwin MP, Chancellor of the Duchy of Lancaster and Minister in

charge of the Cabinet Office visited Mumbai and Delhi from July 27-29, 2015. In Mumbai,

Minister Letwin met with Shri Devendra Fadnavis, Hon’ble Chief Minister of Maharashtra.

In New Delhi, Mr Letwin called on Shri Arun Jaitley, Hon’ble Minister of Finance,

Government of India to discuss financial and economic cooperation between the UK and

India. Minister Letwin also met with Shri Suresh Prabhu, Hon’ble Minister of Railways and

Shri Amitabh Kant, Secretary, Department of Industrial Policy and Promotion.

Rt Hon Philip Hammond, UK Secretary of State for Foreign and Commonwealth

Affairs visited India on March 12, 2015 to open a new British Deputy High Commission in

Chandigarh. During his visit he called on Smt Sushma Swaraj, Hon’ble Minister for External

Affairs, Govt of India and Shri Arun Jaitley, Hon’ble Minister of Finance.

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Baroness Verma, former UK Parliamentary Under Secretary of State for Energy and

Climate Change led a 19 member renewable energy business delegation during February 12-

18, 2015 to participate at the global Renewable Energy Investor’s summit (RE-Invest) in

India. The delegation included representatives from project developers, financial institutions,

and technical advisory firms.

Lord Livingston, former UK Minister for Trade and Investment visited India during

January 9-12, 2015. Lord Livingston led a contingent of over 60 British companies and 100

delegates to Vibrant Gujarat. This is one of the largest delegations of any country at Vibrant

Gujarat 2015, with sectors including advanced engineering, manufacturing, retail, financial

services, infrastructure, design and education.

Ms Priti Patel, former Exchequer Secretary to the Treasury and UK Prime Minister’s

UK-India Diaspora Champion, led the UK delegation to the Pravasi Bharatiya Divas

convention on January 6, 2015. During her visit, Ms Priti Patel, attended the inaugural

session of the Pravasi Bharatiya Divas to support greater UK-India links.

III. India UK Trade and Investment

1. India-EU Broad-Based Bilateral Trade and Investment Agreement

India EU BTIA negotiations are underway with the EU for a Broad based Trade and

Investment Agreement (BTIA) with 15 Rounds having been completed. An intersessional

meeting and Chief Negotiators meeting was held on May 13, 2013 in New Delhi. A

Ministerial review meeting between former Minister for Commerce and Industry and Trade

Commissioner EU was held on April 15, 2013 at Brussels to take stock and provide political

guidance on outstanding issues. Apart from these meetings, sector-specific intersessionals,

Digital Video Conferences (DVCs) are also held frequently, on a regular basis between the

two sides. The areas covered in BTIA are: Trade in Goods, Sanitary & Phyto-sanitary

Measures and Technical Barriers to Trade, Trade Remedies, Trade in Services, Rules of

Origin, Investment, Intellectual Property Rights and Geographical Indications, Competition

Policy, Customs and Trade Facilitation, Trade Defence, Dispute Settlement, Government

Procurement and Sustainable Development.

During the India-UK Summit held on on November 12, 2015 in the UK, the Prime

Ministers of both India and the UK reaffirmed their commitment to finalization of an EU-

India BTIA as soon as possible. The UK and India committed to work closely together

towards this end.

2. India-UK Bilateral Investment

Today the UK is the 3rd largest inward investor in India, after Mauritius, and

Singapore with a cumulative equity investment of US $ 23.10 billion (April 2000- March

2016. UK ranks first among the G20 countries and accounts for around 8% of all foreign

direct investment into India for the period April 2000 – March 2016.

I. Investments from UK to India

Cumulative FDI Inflows from UK (April 2000- March 2016) : US $ 23.10 billion

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Percentage share of FDI inflows into India from UK : 8%

Rank : 3rd

FDI from UK during the last 6 years

2010-11 US$ 2.7 billion

2011-12 US$ 7.8 billion

2012-13 US$ 1.0 billion

2013-14 US$ 3.2 billion

2014-15 US$ 1.4 billion

2015-16 US$ 898 million

Share of top sectors attracting FDI Equity Inflows from the United Kingdom

(from April 2000 to April 2015):

(Amount of FDI equity inflows)

Rank Sector Amount of FDI equity

inflows

% age of FDI

equity inflows

from United

Kingdom Rs. in

crores

US$ in

million

1 Chemicals (Other Than

Fertilizers)

26,438.48 5,781.14 25.99

2 Drugs & Pharmaceuticals 19,124.57 3,909.64 17.58

3 Food Processing Industries 19,411.16 3,054.68 13.73

4 Services Sector* 13,428.55 2,947.19 13.25

5 Petroleum & Natural Gas 11,320.36 2,318.46 10.42

Total of Above 89,723.12 18,011.11 80.97

*Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing,

R&D, Courier, Tech. Testing and Analysis

According to Confederation of British Industry (CBI)’s Sterling Assets India Report

2015, UK is India’s largest G20 investor and employer; companies currently employ around

691,000 people across India, 5.5% of total organised private sector jobs in the country.

Between 2000 and 2015, UK FDI worth US$22.2bn has generated around 138,000 direct

jobs, 7% of the total 1.96 million jobs generated by FDI in India. According to the findings,

UK is a close second (after the USA) in generating service sector jobs in India, with an

estimated 43,000 positions created. The chemicals sector attracts the lion's share of British

investment in India, at $5.78 billion (26 per cent of UK FDI), followed by the pharmaceutical

sector at $3.76 billion (17 per cent of UK FDI) and the food processing sector at $3.05 billion

(14 per cent of UK FDI).

II. Investments from India to UK

India continues to be one of the largest source markets for FDI projects in the UK.

According to the latest figures released by the UK Trade and Investment (UKTI) in their

‘2014/15 Inward Investment Annual Report’, India undertook 122 FDI projects in 2014-15 in

the UK, marking an increase of 65 per cent over last year and making it the UK’s third largest

source of FDI, accounting for over 9,000 new jobs.

12

According to the figures released by the UK Trade and Investment in their ‘2013/14

Inward Investment Annual Report’ India had 74 FDI projects in the United Kingdom which

created 4,482 jobs during 2013-14.

According to Office for National Statistics, The value of Indian FDI into the UK has

experienced a notable increase between 2004 and 2013, from £164 million to £1.9 billion.

The largest industry grouping in the UK receiving Indian FDI was information and

communication (30% of total UK FDI into India in 2013). The UK attracts more Indian

investment than the rest of the EU put together.

According to the Grant Thornton India Tracker 2016 Report, More than 800 Indian-

owned businesses, employs nearly 110,000 people in the UK. About 10% of these 800 Indian

and India-focussed companies are listed on the London Stock Exchange. The top fastest-

growing Indian companies in the UK generate over £26 billion of turnover, an 18% increase

compared to 2015. The study also stated that Indian companies in the UK pay a combined

UK corporation tax bill of £650 million – up from £500 million in 2015.

3. India-UK Bilateral Merchandise Trade

UK is among India’s major trading partners. During 2015-16, UK ranked 12th in the

list of India’s top 25 trading partners moving up 6 places from being 18th in 2014-15. Despite

the global economic slowdown and the Eurozone crisis, India-UK bilateral trade has been

resilient.

According to the data published by the Department of Commerce, Government of

India, two-way merchandise trade during 2015-16 stood at US$14.02 billion, marking a

decrease of 2.20% as compared to 2014-15.

India’s merchandise exports to UK declined by about 5.26% from US$ 9.31 billion in

2014-15 to US$ 8.82 billion in 2015-16 and imports from UK have increased by 3.49% from

US$ 5.01 billion in 2014-15 to US$ 5.19 billion in 2015-16. UK’s share in India’s global

trade has gone up from 1.89% in 2014-15 to 2.18% in 2015-16.

13

India-UK Total Trade Statistics as on 06/06/2016

Values in US $ Millions

S.No. \Year 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

1. EXPORT 8,589.93 8,612.54 9,779.07 9,319.73 8,829.29

2. %Growth 0.26 13.54 -4.70 -5.26

3. India's Total Export 305,963.92 300,400.58 314,405.30 310,338.48 262,031.23

4. %Growth -1.82 4.66 -1.29 -15.57

5. %Share 2.81 2.87 3.11 3.00 3.37

6. IMPORT 7,134.30 6,293.09 6,045.10 5,018.28 5,193.61

7. %Growth -11.79 -3.94 -16.99 3.49

8. India's Total Import 489,319.49 490,736.65 450,199.79 448,033.41 380,665.13

9. %Growth 0.29 -8.26 -0.48 -15.04

10. %Share 1.46 1.28 1.34 1.12 1.36

11. TOTAL TRADE 15,724.23 14,905.62 15,824.17 14,338.01 14,022.90

12. %Growth -5.21 6.16 -9.39 -2.20

13. India's Total Trade 795,283.41 791,137.23 764,605.09 758,371.89 642,696.36

14. %Growth -0.52 -3.35 -0.82 -15.25

15. %Share 1.98 1.88 2.07 1.89 2.18

16. TRADE BALANCE 1,455.63 2,319.45 3,733.98 4,301.46 3,635.69

17. India's Trade Balance -

183,355.57

-

190,336.07

-

135,794.49

-

137,694.93

-

118,633.91

14

Note: Since 2006-07, Petroleum figures are being computed from Import Daily trade Returns (DTRs) to

genetate country-wise/port-wise tables. Up to 2005-06 consolidated petroleum import figures were being

received from the Petroleum Ministry.

4. India-UK Bilateral Trade in Services

According to UK’s Office for National Statistics, the India-UK bilateral trade in

services (excluding travel, transport and banking) in the calendar year 2014 amounted to

approx. £2.5 billion. India's exports to the UK in services (excluding travel, transport and

banking) in the calendar year 2013 amounted to £1.5 billion and India's imports from the UK

in services (excluding travel, transport and banking) in the calendar year 2014 amounted to

£975 million.

……….

June 6, 2016