Open retail, relax banking norms: UK

Britain has asked India to open up the retail sector to foreign direct investment and allow greater participation of foreign banks in the banking sector.

A high-level delegation, led by UK Trade & Industry Secretary Alan Johnson, met the three-member Investment Commission, headed by Tata Sons Chairman Ratan Tata on Thursday. The British delegation said India needed to combat the menace of corruption to attract investment.

"Many British companies are wary of coming to India due to corruption," Director General of the Confederation of British Industries Digby Jones told Business Standard.

The Investment Commission has been constituted by the Indian government to interact with global business leaders and suggest policy interventions to attract more investment.

"Some of our biggest retailers like grocery home shopping service Tesco are not present in India. Since retailers need good infrastructure like roads and railways, allowing retail will automatically create that infrastructure here," he said.

Jones said the entry of international retail chains would not hit the Indian mom-and-pop stores. "Wherever Tesco has gone globally, jobs have been created," he said. He said, "It is just not acceptable to us that our banks cannot own more than 5 per cent of the banks here."

Executives from Standard Chartered, Barclays Capital and Lloyd's accompanied British Prime Minister Tony Blair on his India visit.

They complained that allowing them to invest only in banks identified by the Reserve Bank of India was not a positive signal.

Jones said the UK business delegation also raised the issue of restrictions on import of beer and spirits, particularly Scotch Whiskey.

"We raised this issue with both Commerce and Industry Minister Kamal Nath and Prime Minister Manmohan Singh," he added.