UK minister urges nations to cut barriers

THE CII'S 10TH PARTNERSHIP SUMMIT

Mike O'Brien, the British minister of state for international trade and investment and foreign and commonwealth affairs, said both developed and developing countries need to shed protectionism and ease up on trade curbs for mutual benefit.

With increasing globalisation and strides in technology, the economic co-operation between the developed and the developing economies would continue to change at a faster rate, notwithstanding aberrations now and then, he observed. O'Brien was speaking on 'Trade challenges for Britain and India in a changing world' at a session on 'New Economy: New Paradigms' at three-day CII Partnership Summit which began here yesterday.

Taking note of the controversy regarding the outsourcing of jobs abroad by the companies in the developed countries, he said this would help these companies to be competitive. They could focus on generating new and sustainable jobs.

Newspapers talk about the jobs lost, but say nothing about the number of jobs gained the companies choosing to invest in the UK. Britain as a whole benefits from globalisation and free trade," he explained.

He further clarified that, "We will protect our people without lapsing into protectionism, we will invest in the skills of our work force, we will champion entrepreneurship and we will promote innovation to create a dynamic nation at the forefront of the knowledge economy."

About the protectionism being practised by India, O'Brien said British service providers should be ensured as easy access to India as BPO suppliers had to the British market.

"We look, for example, for further increase in the cap on equity investment by British insurers in India. We also want an increase in the number of scheduled air services between in India," he said.

Referring to UK-India trade relations, the British minister said there was "a real mood of optimism." The year 2003 was a year of all-round development for the country with a good monsoon, excellent harvests, record foreign exchange reserves, boom in stock markets. 2003 was also a good year for UK-India trade relations.

In the first three quarters of the year, bilateral trade grew by a fifth, while the exports of UK goods to India grew by 27 per cent. However, a quarter of the trade is not in goods at all, but in services. The British companies are already major players in India's services sector, for example in banking, insurance and education, the minister said.

Satyam Computer Services chairman B Ramalinga Raju said the contribution by the services sector to the economy was only a 'tip of the iceberg.' The share services sector at around 50 per cent in the GDP was expected to grow to 80 per cent in the future.

"BPO will erase the boundaries and integrate economies the world over. With the virtual delivery of services assuming a major role in the future, there would a churnout in the jobs," he pointed and added that corporate social responsibility will have a major human resources role.