Brief on India-UK Bilateral Economic Relations

Transcription

1 High Commission of India London (Economic & Commerce Wing) Brief on India-UK Bilateral Economic Relations I. Background: India-UK Economic and Commercial Relations On the side-lines of G20 Summit held in Australia in November 2014, Shri Narendra Modi, Hon ble Prime Minister of India held his first bilateral meeting with Rt Hon David Cameron, Prime Minister of the UK. During their meeting, the UK Prime Minister said that the relations with India are at the top of the priorities of the UK s foreign policy. Prior to that, 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, This was the third visit of UKPM in three years since The PM was accompanied by a small business delegation to further increase the opportunities on offer to help British businesses succeed abroad. Former UK Deputy PM s visit to India in August 2014 Rt Hon, Nick Clegg, former UK Deputy PM led a major UK trade delegation to India during August 25-27, During his visit, the former UK Deputy PM met the Prime Minister of India during which he conveyed UK s strong desire to further strengthen and deepen relations with India. The Prime Minister of India called for greater collaboration between India and UK in the areas of education, skills development, clean energy, infrastructure development and cleaning of rivers. Both sides also discussed international issues relating to WTO and climate change. The former UK Deputy PM was accompanied by Rt Hon Edward Davey, former Secretary of State for Energy and Climate Change, Lord Dholakia in his capacity as former UK Deputy PM s India Business Adviser and a 40 strong trade delegation from the UK that included major British businesses from the retail, aerospace and education sectors. The former UK Deputy PM visited New Delhi, Mumbai and Bangalore to take advantage of the trade and investment opportunities presented by the Government of India s focus on economic growth and to celebrate the strong cultural links between UK and India. In Bangalore, the former UK Deputy PM opened a new Tech Hub aiming to grow 1,000 Bangalore start-ups in 3 years and link them with the UK and the second UK Indian Business Centre that will provide support to UK businesses who want to grow in India. During former UK Deputy PM s visit to India, a number of India-UK trade deals materialized.

2 UK Ministerial visits to India in 2015 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, 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, 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. 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, 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.

3 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, During her visit, Ms Priti Patel, attended the inaugural session of the Pravasi Bharatiya Divas to support greater UK-India links. UK Ministerial visits to India in 2014 Rt Hon Matthew Hancock, former Minister of State for Skills & Enterprise visited India during January 16-17, 2014 to promote partnerships in education and UK expertise in training and educational technology. Rt Hon Gregory Barker, former Minister of State at the Department of Energy and Climate Change and Minister for Business Engagement with India visited India during February 5-10, Rt Hon Oliver Letwin, Minister for Government Policy visited Mumbai on March 4, 2014 for a bilateral meeting with Dr Raghuram Rajan, Governor, Reserve Bank of India. Rt Hon George Osborne, Chancellor of the Exchequer visited India during July 7-9, 2014 to attend the 7 th round of the Economic & Financial Dialogue (EFD). During his visit, he called on Shri Narendra Modi, Hon ble Prime Minister of India, Shri Arun Jaitley, Hon ble Finance Minister of India and Dr Raghuram Rajan, Governor, Reserve Bank of India. Rt Hon William Hague, former Secretary of State for Foreign and Commonwealth affairs visited India during July 7-9, During his visit, he called on Shri Narendra Modi, Hon ble Prime Minister of India and Smt Sushma Swaraj, Hon ble Minister for External Affairs. Rt Hon Oliver Letwin, Minister for Government Policy, Rt Hon Gregory Barker, former Minister of State at the Department of Energy and Climate Change and and Minister for Business Engagement with India, Mr Jo Johnson, Head of the Downing Street Policy Unit and Ms Priti Patel, UK PM s Indian Diaspora Champion accompanied the Foreign Secretary and the Chancellor of the Exchequer during their visit to India. Rt Hon Edward Davey, former Secretary of State for Energy and Climate Change visited India during July 24-25, 2014 to attend a round table with Gujarat energy sector experts. During his visit, he called on Shri Prakash Javadekar, Hon ble Minister of State with Independent Charge for Environment, Forests and Climate Change, Shri Dharmendra Pradhan, Hon ble Minister of State with Independent Charge for Petroleum and Natural Gas, Shri Piyush Goyal, Hon ble Minister of State with Independent Charge for Power, Coal and New & Renewable Energy and Smt Anandiben Patel, Hon ble Chief Minister of Gujarat. Rt Hon Edward Davey visited India for the second time while accompanying former UK Deputy PM during August 25-27, Mr Shailesh Vara, Parliamentary Under-Secretary of State and Minister for the Courts and Legal Aid visited Delhi and Ahmedabad during September 1-3, Sir Edward Lister, Deputy Mayor of London for Policy and Planning visited India during September 10-14, 2014.

4 Ms Andrea Leadsom, former Economic Secretary to the Treasury visited Mumbai on October 10, 2014 to formally launch the India-UK Financial Partnership (IUFP). Rt Hon Dr Vince Cable, former UK Secretary of State for Business, Innovation and Skills visited Delhi, Goa, Pune and Chennai during October 10-15, 2014 along with a delegation with an automotive and education focus. During his visit, the former Secretary of State called on Shri Arun Jaitley, Hon ble Minister of Finance, Government of India and Shri Nitin Gadkari, Hon ble Minister for Road, Transport & Highways and Shipping. Rt. Hon. Carwyn Jones, First Minister of Wales visited India during October 28-30, First Minister Jones led a trade delegation to Delhi and Mumbai to further raise the profile of Wales following a successful visit to India in Rt Hon Greg Clark, former UK s Minister for Universities, Science and Cities visited India during November 12-14, During his visit, Minister Clark called on Dr Harsh Vardhan, Hon ble Minister for Science & Technology and Earth Sciences and Smt. Smriti Irani, Hon ble Minister of Human Resources Development. Baroness Verma, former UK Parliamentary Under Secretary of State for Energy and Climate Change led a Business delegation to Jaipur, Chandigarh and New Delhi during November 12-15, The business delegation included UK representatives from the education/skills training and retail sectors, among others. During her visit, Baroness Verma called on Smt Vasundhara Raje, Chief Minister of Rajasthan and Shri Sukbir Singh Badal, Deputy Chief Minister of Punjab. Alderman Alan Yarrow, The Lord Mayor of the City of London, visited India on December 6-10, 2014 as part of the UK s efforts to boost economic ties between India and the UK. The Lord Mayor led his first business delegation which included strong number of financial and professional services firms to New Delhi and Mumbai. Notable visits from India to UK in 2015 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, During his visit, the Hon ble Minister met with Lord Bourne, UK Parliamentary Under Secretary of State, Department of Energy and Climate Change (DECC) and Baroness Verma, UK Parliamentary Under Secretary of State, Department for International Development (DfID).

5 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, 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, 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. Notable visits from India to UK in 2014 Shri Nitin Gadkari, Hon ble Minister for Road Transport & Highways and Shipping, Government of India paid a visit to the UK during November 17-18, During the visit, the Hon ble Minister held bilateral meetings with Rt Hon Oliver Letwin, UK Minister for Government Policy, Rt Hon Dr Vince Cable, former Secretary of State for Business, Innovation and Skills and Mr Robert Goodwill, Parliamentary Under Secretary of State for Transport. The Hon ble Minister also held discussions and interacted with the members of the UK India Business Council and senior representatives of UK companies in London. In addition, the Hon ble Minister visited the offices of Driver & Vehicle Licencing Agency (DVLA) in Swansea, Ministry of Transport (MoT) s Test Station at Stockwell Garage and offices of Transport for London (TfL). Smt Nirmala Sitharaman, Hon ble Minister of State for Commerce & Industry, Government of India paid a visit to UK during October 27-28, During her visit, the Hon ble Minister, participated in the Investors Seminar organised by the High Commission of India at India House on October 27, The Hon ble Minister also called on Rt Hon Dr Vince Cable, former UK Secretary of State for Business, Innovation and Skills. The Hon ble Minister also addressed at the Milken Institute s London Summit and Institute of Director s Global Convention on Corporate Governance & Sustainability. During the visit, the Hon ble Minister was also invited to speak at the India Debates forum at the House of Lords. Shri Pradeep Kumar Sinha, Secretary, Ministry of Power, Government of India led a 5 member delegation to UK on October 13-14, 2014 to explore specified areas of technical collaboration with the UK in the power sector. During the delegation s visit, High Commission of India organized an Interactive Session at India House on October 14, 2014 in which Rt Hon Mathew Hancock, former UK Minister of State for Energy participated. Shri U.K. Sinha, Chairman, Securities and Exchange Board of India (SEBI), visited London for an interactive session with the investors and bankers on April 23, 2014.

6 Dr. Arvind Mayaram, former Finance Secretary, Ministry of Finance, Government of India visited London to attend the Plenary Meeting of the Financial Stability Board (FSB) on March 31, During his visit, he delivered a talk on the current status of the Indian economy, highlighting the new opportunities available for trade and investment with India and on the implications of the Budget 2014 during an interactive meeting organized by the High Commission of India. II. Bilateral Institutional Mechanisms: 1. 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 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. An UK delegation led by Rt Hon George Osborne, Chancellor of the Exchequer of UK visited India to participate in the 7 th round of the Economic and Financial Dialogue (EFD) between India and the UK on July 8, Shri Arun Jaitley, Hon ble Finance Minister of India and the Chancellor of the Exchequer had a bilateral meeting, where they discussed a range of issues of common interest. The 7 th round of EFD covered discussions on topics such as Macroeconomic Risks and Policy Responses, Trade and Investment Issues, Infrastructure Financing and Financial Services and Regulations. (i) Both India and UK agreed to work closely together and are committed to multilateral co-operation through the G20 and International Financial Institutions. (ii) Both India and UK remain committed to the Base Erosion and Profit Shifting project and will continue to work together through the G20 and OECD to reform the international tax rules to ensure that they are fair and consistent. (iii) Both India and UK reiterated their determination to lead on tackling tax evasion, noting that the two countries would begin exchanging tax information on an automatic basis from 2017 with each other and with a large number of jurisdictions as part of their commitment to early adoption of the new Global Standard. (iv) Both the countries have agreed to pursue joint work on the common aim of exploring ways to encourage increased institutional investment in infrastructure. The ambitious package of measures to support investment in Indian infrastructure will include a 1 billion line of credit from UK Export Finance (UKEF) to support Indian infrastructure projects, such as Bengaluru-Mumbai Economic Corridor (BMEC). This will be

7 supported by 10 global banks to deliver government funded loans through the 3bn Direct Lending Scheme, with more banks expected to join them in the coming weeks. This will provide competitive finance to purchasers of UK exports in India. (v) Further progress has been made on the Infrastructure Feeder Fund whereby Ministry of Finance (MOF), Government of India will facilitate Her Majesty s Treasury (HMT) of UK in its interactions with Infrastructure Debt Funds (IDFs) for exploring the design of a London-based fund targeted at raising capital at scale from the London market for investment in Indian infrastructure debt. (vi) Both India and UK agreed to build further collaboration and recognise Mumbai s role as a financial centre by launching the UK-India Financial Partnership, a strategic partnership supported by the UK and Indian Governments and financial services industries which will establish closer ties between London and Mumbai as financial centres. (vii) An Accord was signed between Ministry of Finance and Her Majesty s Treasury to formalise the cooperation between the India and UK on infrastructure and Public- Private Partnerships. The dates for the 8 th EFD which is expected to be held in London are yet to be proposed by the UK side. 2. India-UK Financial Partnership (IUKFP) At the 7 th India-UK Economic and Financial Dialogue held in Delhi on July 8, 2014, the 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 launched the India-UK Financial Partnership. 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 of Kotak Mahindra Bank, will represent the Indian Financial Services industry, and Sir Gerry Grimstone, Chairman of Standard Life and The City, UK; will represent the UK. It has been decided that the Partnership will 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 On February 13, 2015, the Indian representatives of the IUKFP convened their first meeting led by Mr Uday Kotak. The group discussed potential areas for collaboration and assigning of leaders for each area. On March 17, 2015, Sir Gerry hosted a meeting for the U.K. participants in London. Sir Gerry asked the participants to indicate expressions of

8 interest to TheCityUK to make concrete contributions. The next steps would be to compare notes with the Indian partners in order to identify three priority topics or sub-topics and elaborate them further. 3. 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 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 10 th 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 ongoing 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 The Hon ble Minister and the former UK Secretary of State focused on building on the 17.5bn bilateral trade in goods and services in 2013 through enhanced UK and Indian business led collaboration, existing examples of which are highlighted by the GREAT Collaboration s campaign, as well as opportunities presented by

9 Government of India s Make in India programme, better market access for UK and Indian firms and improvements to the business environment in both countries. It was agreed that the next meeting of the India-UK JETCO would be held in New Delhi in 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 7th round of the Economic and Financial Dialogue (EFD) between India and the UK held on July 8, 2014 in New Delhi, Hon ble Finance Minister of India and the Chancellor of the Exchequer reiterated that both India and the UK remain strong supporters of an ambitious EU-India Broad based Trade and Investment Agreement (BTIA) that stands to bring significant benefits to businesses and consumers on both sides. Both India and the UK look forward to an early conclusion of a fair, balanced and forward looking India-EU BTIA, which will open new opportunities for trade and investment between the two countries. 2. India-UK Bilateral Investment Today the UK is the 3 rd largest inward investor in India, after Mauritius, and Singapore with a cumulative equity investment of US $ billion (April June 2015). UK ranks first among the G20 countries and accounts for around 9% of all foreign direct investment into India for the period April 2000 June I. Investments from UK to India Cumulative FDI Inflows from UK (April June 2015) : US $ billion Percentage share of FDI inflows into India from UK : 9% Rank : 3rd FDI from UK during the last 5 years US$ 2.7 billion US$ 7.8 billion

10 US$ 1.0 billion US$ 3.2 billion US$ 1.4 billion 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 Rs. in crores US$ in million from United Kingdom 1 Chemicals (Other Than 26, , Fertilizers) 2 Drugs & Pharmaceuticals 19, , Food Processing Industries 19, , Services Sector* 13, , Petroleum & Natural Gas 11, , Total of Above 89, , *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 $3.05 billion (14 per cent of UK FDI). II. Investments from India to UK India continues to be one of the largest source markets for FDI projects in the UK. According to the latest figures released by the UK Trade and Investment (UKTI) in their 2014/15 Inward Investment Annual Report, India undertook 122 FDI projects in in the UK, marking an increase of 65 per cent over last year and making it the UK s third largest source of FDI, accounting for over 9,000 new jobs. According to the figures released by the UK Trade and Investment in their 2013/14 Inward Investment Annual Report India had 74 FDI projects in the United Kingdom which created 4,482 jobs during According to UNCTAD, the value of Indian FDI Flows into the UK was US$ 552 million in the year 2012, an increase from previous year (US$ 368 mn in 2011). The cumulative flow of Indian FDI in UK from the year 2010 to 2012 was US $ 1.32 billion.

11 The UK attracts more Indian investment than the rest of the EU put together. According to a research conducted by Grant Thornton in 2015, 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 some 22 billion of turnover. The study also stated that Indian companies in the UK pay a combined UK corporate tax of almost half a billion pounds, a number that would be considerably higher if other taxes such as payroll and sales tax were taken into account. 3. India-UK Bilateral Merchandise Trade UK is among India s major trading partners. During , UK ranked 18 th in the list of India s top 25 trading partners. 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 stood at US$15.82 billion. The two-way merchandise trade during stood at US$14.33 billion, marking a decrease of 9.39% as compared to India s merchandise exports to UK declined by about 4.70% from US$ 9.77 billion in to US$ 9.31 billion in and imports from UK declined by 16.99% from US$ 6.04 billion in to US$ 5.01 billion in UK s share in India s global trade has gone down from 2.07% in to 1.89% in

12 India-UK Total Trade Statistics as on 19/10/2015 Values in US $ Millions S.No. \Year EXPORT 7, , , , , %Growth India's Total Export 249, , , , , %Growth %Share IMPORT 5, , , , , %Growth India's Total Import 369, , , , , %Growth %Share TOTAL TRADE 12, , , , , %Growth India's Total Trade 619, , , , , %Growth %Share TRADE BALANCE 1, , , , , India's Trade Balance - 119, , , , , Note:Since , Petroleum figures are being computed from Import Daily trade Returns (DTRs) to genetate country-wise/port-wise tables. Up to consolidated petroleum import figures were being received from the Petroleum Ministry. India s main exports to the UK are garments and textiles, machinery and instruments, petroleum products, footwear and leather, manufactures of metals, gems and jewellery,

13 engineering goods, transport equipment and parts, spices, drugs & pharmaceuticals and marine products. The main imports from the UK to India are machinery and equipment, ores and metal scraps, precious and semi-precious stones, silver, metalifers, aircrafts and parts, beverages and spirits, machinery, engineering goods, and other professional instruments other than electronics, non-ferrous metals, and chemicals. 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 2013 amounted to approx. 2.2 billion. India's exports to the UK in services (excluding travel, transport and banking) in the calendar year 2013 amounted to 1355 million and India's imports from the UK in services (excluding travel, transport and banking) in the calendar year 2013 amounted to 863 million. October 26, 2015.