The City of London has long been known as the world-leading global financial centre, and I know that closer economic partnership can support India’s goals of economic diversification, growth management and infrastructure development—which is why I am leading a City business delegation to Delhi, Kolkata and Mumbai this October.
Everyone knows that India is a major, and growing, export market, which offers great possibilities for UK businesses. The UK and India have a very strong bilateral trade relationship, and India and the UK are natural partners. But despite rapid absolute growth in recent years, the UK’s trading performance has lagged behind that of many of our key partners. As India develops, so do the opportunities for the City’s business and vice versa, and we must do our utmost to realize them.
The UK has much to offer India through increased cooperation in financial and professional business services—an area of strong British comparative advantage. I am delighted that a collaborative and truly two-way exchange in the area of financial services is already under way through the work of the City of London Advisory Council for India and the City Office in Mumbai, in areas such as infrastructure financing and developing the Indian corporate debt market. India’s rapid population growth brings serious challenges, but also opportunities as the authorities take action on poverty. Forty million people join the ranks of its middle class every year, bringing around 300 million Indians into this crucial bracket; one-third having emerged from poverty in the last 10 years. At the current rate of growth, the majority of Indians will be middle class by 2025—which has enormous implications for the size of the country’s consumer goods and services market and the opportunities for British exporters.
The resulting demand for infrastructure and financial services expertise will dwarf the capital and capacity of today’s market, resulting in real opportunities for cooperation with the City’s financial service providers.
Major infrastructure projects—from roads and ports through to power generation—offer an opportunity for the Indian government to work alongside foreign investors such as those from the UK, if the conditions are right. Finding innovative methods to finance this massive programme of building and maintenance is both a challenge and a business opportunity, and I look forward to discussions on this subject with the Reserve Bank of India, ministry of finance and the Securities and Exchange Board of India during my India visit.
The City is a world leader at mobilising the capital needed for such large-scale developments. Indeed, in the last 15 years we have invested to an unprecedented degree in our own national infrastructure. A significant proportion of this investment has been funded via public-private partnerships (PPPs), which have been responsible for around 25% of UK public infrastructure spending and have delivered significant improvements in service and efficiency. This means the UK—and the City in particular —leads the field when it comes to planning, procuring, managing and delivering projects from roads to hospitals, prisons to street lighting. We must make a much tougher pitch for major contracts, by promoting a more joined-up approach from UK project designers, advisers, constructors and financiers. The UK government has recently developed a new programme, the High Value Opportunities Initiative, to match UK expertise and capital to large international projects. India will play an important role in this initiative, run by UK Trade and Investment, and I am confident that it will help to increase investment and participation in large-scale infrastructure projects that will benefit the Indian economy.
I believe that population growth in India and the resulting demands for infrastructure development provide a huge range of opportunities for the City’s financial services industry to contribute to India’s future progress. Indian society, its increasing upward social mobility and booming business landscape, will need service providers that understand them and their industries; the City can supply the financial infrastructure, expert skills and hi-tech software systems to make a difference.
That’s why we are committed to serving the needs of India as a key international business partner. We want to maintain an environment in which organizations and companies from all over the world can benefit from the UK’s experience to play their part in financing global trade and development. When I visit Delhi, Kolkata and Mumbai, the key theme of my discussions with business people and government ministers will be on infrastructure development and financing. I will highlight the UK’s expertise in the field of infrastructure financing and PPPs and discuss ways we can use this expertise to help improve the Indian investment environment. I am very much looking forward to these discussions and am confident that we will be able to find concrete ways in which we can continue to work together in the future.
Michael Bear is the Lord Mayor of London
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