I’m lucky to hold office during a great year for Great Britain. The Olympics and the Diamond Jubilee gave the City — and London as a whole — a platform to showcase its fantastic infrastructure, culture and heritage to the rest of the world, and show why London and the UK should be a partner of choice for investors when it comes to international trade and investment.
But I am lucky for another reason. I’m leading a 15-strong UK business delegation to Delhi, Chennai and Mumbai this week during an exciting time for Indian politics. After a long period of political inertia, Prime Minister (Manmohan) Singh’s recent reforms in retail and aviation are welcome signs for international investors. And on Thursday, there was yet more encouraging news as the Union council of ministers approved Bills to attract FDI (foreign direct investment) into insurance and pensions in the latest move to restore confidence in the economy. Although the reforms will face a tough passage in parliament, this decision by the government is very welcome to foreign firms and to their domestic partners. Raising the cap on foreign ownership to 49 per cent would allow cash-starved Indian insurance companies to access the capital they need to grow and serve the needs of Indian customers.
My remit on this visit is to represent the City of London in talks with key policy makers, ministers, regulators and business leaders, and to demonstrate how working with the UK, particularly in the field of financial services and infrastructure development, can secure large scale benefits to the Indian economy.
I will deliver a keynote speech on infrastructure financing at a RICS Cities Conference, and speak at a Law Society event on Alternative Dispute Resolution – an area where UK and Indian firms are working in partnership. In Chennai, I will meet senior government officials to discuss the Tamil Nadu Vision 2023, and the visit will conclude in Mumbai, where I will meet with the Reserve Bank of India and a range of key commercial contacts, including Adi Godrej, the president of the Confederation of Indian Industry.
I will assure ministers that we fully support the government’s reform programme; these most recent moves really demonstrate Prime Minister Manmohan Singh’s commitment to economic development, despite the difficult political environment. But as observers from outside India, we would do well to remember, before optimism takes over, that the pension and insurance Bills are not new. The approval of the Bills by the Cabinet is very welcome, but the proof of the pudding is in the eating. These reforms have been long-anticipated, and it is only when the Bills have been approved by Parliament that we can really talk of the reform process being fully unde r way.
So, here in the City of London, we will wait to see what the pace of change will be, and what this means for India’s business with the UK and the rest of the world. The City of London has built up strong relationships with the financial and political community in India, and despite the global economic downturn, our bonds continue to strengthen. We recognise that economic reform is a delicate process, and any changes that open markets should be brought through at a speed that allows the economy to develop to ensure long-term, lasting benefits for Indian society as well as the wider global economy. I hope that the growing optimism about India’s reform agenda will be rewarded in the months to come.
David Wootton
Lord Mayor of the City of London