Modi’s visit to UK: MNCs plan to unveil $15 billion in India

LONDON: Economic diplomacy is going to be the reigning flavor during India’s Prime Minister Narendra Modi’s visit to the UK. Buoyed by upbeat projections for the Indian economy, top British multinationals are planning to unveil USD 15 billion of trade and investments in India during Mr Modi’s visit.

British companies are looking to invest in flagship programmes of the Indian government like ‘Make in India’ and Smart Cities,’ which aim at modernizing the country’s military and urban infrastructure respectively. Top UK companies have lined up major deals, which could be unveiled during Mr Modi’s November 12-14 visit to Britain, the first bilateral visit by an Indian prime minister to that country in a decade.

One of the major deals expected between India and UK is the likely sale of 20 more Hawk trainer aircraft assembled in Bangalore. Other investments could include telecom investments by Vodafone, and the marketing in the City of London of rupee-denominated offshore “masala” bonds to finance housing and railway expansion in India, said the Financial Times in a report.

The UK is the biggest investor and employer in India among the G20 countries with USD 22.2bn invested since 2000, according to the CBI employers’ organisation. India is the fastest growing economy in the world and is the third largest economy in Asia. India’s burgeoning market offers a huge potential to UK investors with India requiring at least $1 trillion investments in infrastructure. India will look to leverage investments through London which is the world’s financial hub. London would be key to financing India’s infrastructure aspirations.

However, even as British companies plan to ramp up investment in India, issues regarding tax reforms and ease of doing business need to be resolved expeditiously by the Indian government. In this context, unresolved tax rows between India and international companies including Vodafone, the telecom giant and Cairn Energy, the oil explorer, are likely to be a key point of focus during Mr Modi’s visit. Both companies have been at the receiving end of the retroactive tax implemented by the previous government in India, which has led to the slowing down of investments into India. The Goods and Services Tax, a major tax reform legislation, is yet to find its way through the parliament with the bill pending approval.

Against this backdrop, Mr Modi will be looking to assure British investors about his plan to fast-track second generation economic reforms and make India a top global investment destination.

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