Investments from India rising despite Brexit, says UKIBC's Richard Heald

Richard Heald, chief executive officer of the UK-India Business Council (UKIBC), has been a frequent visitor to India as both nations raise the stakes in each other's economy. In the background of Brexit, Heald talks to Subhayan Chakraborty. Edited excerpts:

What is the timeline for Brexit?

This is a very important decision for the UK. In June 2016, the British electorate made a decision and for 24 months there has been negotiation with the EU. Now, we have arrived at a withdrawal agreement and this has to be voted on by Parliament. We'll have to see how that goes over the next two weeks. In any agreement, there are concessions made on both sides.

Have Indian businesses, especially those with large footprint in the UK, been spooked by the controversy over the deal?

Investments from India continue to rise and are still the third largest source of foreign direct investments into Britain. There are more than 800 Indian companies currently operating in the UK. Many are involved in upstream, high-end research and design (R&D), especially in the pharmaceuticals, automobile engineering and green energy sectors. Made possible by technology transfer. A recent report by UKIBC that captured the mood of British businesses regarding ease of doing business in India found 80 per cent of firms expressing an intent to increase investments in India over the next year.

Ireland says it will continue having unfettered access to European markets and many Indian services sector firms and R&D units are contemplating shifting there. How would you woo them back?

I would say they are jumping the gun. For, the withdrawal agreement doesn't change anything. On the ground, there will be no changes from March 29 (2019), the deadline for the deal to be signed.

What does a business in the UK stand to gain, the way things are now?

British businesses are confident by the fact that this agreement gives a degree of certainty over what is going to happen over the next few months. The withdrawal agreement is not the final one. It defines the terms on which the UK leaves on March 29. Then, there's a period of transition when talks will happen over what the terms of cohabitation between both parties would be. People in the UK chose to take back control over their borders, not to exclude people but just to be more selective regarding who comes in. Also, they decided to take control of their laws and taxes. The withdrawal agreement encapsulates everything that the people who wanted to leave had wanted. It allows for a friction-less, non-tariff customs union, as of now, which has to be negotiated further during the transition arrangements.

In what sectors do you see British investments rising in India?

British companies in India now employ about 800,000 people, representing about one of every 20 jobs in India's organised private sector. We are seeing a significant increase in the UK's involvement in the services economy, especially financial services and insurance. Pension and savings funds are seeing growth as the middle class in India change their savings habits. In the ITeS (information technology-enabled services) space, specialised areas such as medical and educational technology. 

We are also seeing major interest in the food and beverages sector and will be bringing a large business delegation in early 2019.

British businesses remain concentrated in certain states. Any chance of that changing soon?

Technology is evolving quickly, so that many manufacturers feel they can use it to access Tier-2 and Tier-3 cities in a way that wouldn't have been possible even two years ago. With regard to exports from the UK to India over the past year, we have seen significant increase in white goods. British products enjoy an established presence in the Indian market at all price points.