PM needs to pull off a trade coup with India

Columnist

Tuesday 19 February 2013

David Cameron deserves credit (and how rarely that particular phrase appears in the Scottish media) for taking another high-powered trade delegation to India.

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Harry Reid

Just two months after he became Prime Minister, he led a group of businessmen on a much-publicised trip to the sub-continent, to try to boost British trade. Some success came of this, but not enough. India is now the UK's third largest market outside Europe. But the unrealised potential remains spectacular: India could eventually be a bigger market for us than the entire eurozone.

So let's hope that it's second time lucky, for the faltering UK economy desperately needs to boost its exports to dynamic emerging markets, of which India is the most obvious. The challenge is immense: currently Belgium – yes, Belgium – exports more to India than we do. Mr Cameron was in his best "Sunny Dave" mode when he arrived in Mumbai yesterday, reminding his hosts that he was leading the largest trade delegation ever taken overseas by a British Prime Minister. "The sky's the limit," he declared. The trouble is the Indian economy is currently reaching for the sky much faster than the British one. One coup Mr Cameron will be hoping for is to "steal a deal" for the supply of fighter jets from under the noses of the French. Francois Hollande, the French leader, was in India last week but could not clinch a proposed contract for the French firm Dessault to supply India with over 100 fighters. Spectacular and significant as such a single deal might be, the building up of new trade links will take time and much effort. There was a nasty hiccup just last week when India signalled that it was going to cancel a deal for a dozen helicopters manufactured by a British-Italian firm, after a series of corruption allegations. Meanwhile there are huge problems within India itself. Mr Cameron is instinctively diplomatic, and will no doubt desist from pointing out that India – which still receives British aid – is excessively bureaucratic and has a wholly inadequate transport infrastructure. There is also endemic corruption. This points to the paradox of trade with the world's fast-emerging countries. In some ways, compared to European nations, they are backward, yet they are developing economically at an extraordinary rate. They possess booming, burgeoning middle classes. Internal divisions and disparities remain, but they are lifting many people out of poverty. In short, they are the future, and we are the past. Mr Cameron understands this; he must not scrape and grovel, but nor should he behave like an arrogant "Milord Anglais" of colonial times.India is already a considerable investor in the UK, not least through the conglomerate Tata, which among other interests owns the automotive giant Jaguar Land Rover. Relations between the two countries have improved in the past two years, but there are continuing problems with visas for Indians visiting Britain, particularly to study, and there may still be a lingering residue of post-imperial tension. The Indians are hardly likely to boast "We are the masters now" in their discussions with Mr Cameron, but the fact is our Prime Minister is leading a group of supplicants – powerful business leaders, certainly, but supplicants nonetheless. It is good to see Mr Cameron engaged in a potentially fruitful mission such as this. How much better than posing on a whirlwind, vainglorious tour of north Africa, as we witnessed recently. He should leave such tours, if they are really necessary, to his Foreign Secretary, William Hague, who is probably better briefed and is sure-footed as he travels the world. The US model, where most of the foreign affairs work is delegated by the President to the Secretary of State, works pretty well. The endgame is nearing for Mr Cameron's Coalition Government, and he probably relishes cutting a dash globally, away from all these irritating problems back home. But his current mission is about much more than posing on the world stage, and we should all wish him well.

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PM needs to pull off a trade coup with India

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