����������� India�s multi-faceted bilateral relationship with the UK has developed substantially over the past few years. There have been regular and close consultations at the highest levels. Strong ties with the UK are a priority for India given our political and civilization ties, substantial economic linkages and the large community of Indian origin in the UK.� The UK is an important interlocutor in the bilateral, EU, G8 and global contexts.� It held the G-8 Presidency in 2005 and also the EU Presidency in the second half of 2005.� The UK accords a high priority to developing ties with India.
Indo-UK Summits
2. Dr. Manmohan Singh visited the UK on 19-20 September 2004, his first to a western capital after he assumed office of the Prime Minister of India.� The two Prime Ministers adopted a Joint Declaration titled 'India-UK: towards a new and dynamic partnership' which envisaged annual Summits, meetings between Foreign Ministers and outlined areas for future cooperation in civil nuclear energy, space, defence, combating terrorism, economic ties, science and technology, education and culture.
3. Prime Minister Tony Blair was the first G-8 leader to moot the idea of India joining G-8 discussions.� At his invitation PM visited the UK on 7-8 July 2005 for the �G-8 Plus 5� Gleneagles Summit (India, China, South Africa, Brazil and Mexico).� Prime Minister Tony Blair (PMTB) visited India on 6-8 September 2005 in his capacity as EU President for the EU/ India Summit on September 7, and also for the bilateral Summit held on September 8 in Udaipur.� The two leaders exchanged views on a range of bilateral, regional and multilateral issues.� The UK recognized the need for a supportive international environment for meeting India�s energy requirements and agreed to take forward cooperation with India in the civilian nuclear energy sector.� PMTB reaffirmed his commitment to India�s candidature for permanent membership of the expanded UN Security Council. He expressed understanding that India was 'ringed' by a number of trouble spots and urged a regular dialogue on regional issues.� The two sides agreed on the need to strengthen cooperation against terrorism.� The two sides signed agreements on air services (substantially increasing direct flights between the two countries) and cooperation in the field of hydrocarbons. Two other agreements on sustainable development and films co-production were finalized. PM announced that India would found a Chair at Cambridge in honour of Pt. Jawaharlal Nehru. PMTB announced a � 10 million UK-India Education and Research Initiative (UKIERI).� An India-UK Business Summit was also organized simultaneously with the main Summit. PM met PMTB in St. Petersburg in July 2006 during the meeting of the Outreach Countries with G8 leaders. �
4. Prime Minister Dr Singh visited UK from 09-11, October 2006 and held the third annual India-U.K. Summit since the comprehensive strategic partnership was launched in September 2004. The Summit underlined the continued need for India and the U.K. as democracies to work together to counter terrorism and promote global economic growth. Following discussions on a host of bilateral, regional and multilateral issues, the two leaders told a press conference that their nations enjoyed strong co-operation on business and education and on tackling terrorism and climate change. During their talks at 10, Downing Street, they also discussed the situation in North Korea and its nuclear test. Prime Minister Tony Blair stated that the difference between countries like Britain or India, and a country like North Korea, was that the former were democracies, abiding by the rule of law and their international obligations. He emphasized India's strong and impeccable record on counter-proliferation. Stating that the North Korea's test highlighted the dangers of clandestine proliferation, Dr. Singh reiterated that a further erosion of the non-proliferation regime was not in India's interest. India's own security had suffered due to clandestine proliferation linkages relating from our neighbours. The Prime Ministers addressed the concluding session of the India-U.K. Investment Summit. Chancellor of the Exchequer Gordon Brown and British Foreign Secretary Margaret Beckett called on the Indian Prime Minister.
5. Currently UK Foreign Secretary Margaret Beckett is on a visit to India (2 - 8 November 2006). India is the first Asian country that she is visiting after becoming Foreign Secretary. On 2nd November 06 she called on Prime Minister Dr. Singh and met Foreign Minister Shri Pranab Mukherjee.
6. Vice-President of India, Hon�ble Shri Bhairon Singh Shekhawat transited through London on November 5-6, 2006. During this short transit, he visited Bhartiya Vidya Bhavan, where he inaugurated an exhibition on paintings by Indian artist entitled �Eastern Echos�. He also watched a brief dance performance by artists from the Bhavan and unveiled a plaque commemorating his visit to the Bhavan.
7. Over the last few years HRH The Prince of Wales and almost every important member of the British cabinet have visited India, including Mr. Jack Straw, Ms. Patricia Hewitt, Secretary for Trade and Industry, Defence Secretary John Reid, Home Minister of State for Immigration, Citizenship and Nationality Tony McNulty, Secretary of State for Northern Ireland The Rt Hon Peter Hain etc.
Parliamentary Groups
8. Institutional linkages with all the major British political parties have been established to ensure that goodwill towards India cuts across party lines.� In Parliament, the Friends of India Groups have been useful in promoting understanding of India�s pluralist society and democracy. The Labour Friends of India (LFIN) was launched in 1999 and has sent six parliamentary delegations to India, the last in April 2006. The Liberal Democrat Friends of India (LIB-DEM FIN) was launched in September 2000 and sent delegations to India in 2002, 2004 and 2005.� The Conservative Parliamentary Friends of India (CPFIN) was launched in March 2001 and visited India in 2003, 2004 and 2006. Dr. Liam Fox, then Shadow Foreign Secretary of the Conservative Party led a delegation of four parliamentarians (three MPs and one MEP) to India on August 30-September 1, 2005. Members of important Parliamentary Select Committees - the Trade & Industry Select Committee, the Home Affairs Committee and the Treasury Select Committee visited India in 2006. A visit by the Foreign Affairs Committee is scheduled later this year. An All Party Parliamentary Group on India holds regular meetings.� The Indo-British Parliamentary Forum (IBPF) was launched in New Delhi in April 2003. The India-United Kingdom Parliamentary Friendship Group was launched by Hon�ble Speaker, Lok Sabha on 27 September 2005.� Its President is Shri Gurudas Kamat.� At the invitation of Hon�ble Speaker, Lok Sabha, a five member UK parliamentary delegation of CPA led by Lord Paul of Marylebone visited India in October 2005. The Lords and Commoners Cricket Team toured India in December-January 2005, led by Crispin Blunt, MP, Captain of the British Parliamentarian team. �Cricket diplomacy� reinforced the links between the two Parliaments, with an Indian Parliamentary Team paying a return visit to the UK on September 7-12, 2005.�
Bilateral Mechanisms for Political Consultations
9. Bilateral mechanisms for political consultations at the official level are: the dialogue between the Foreign Policy Advisor to the UK Prime Minister and National Security Advisor (NSA), Foreign Office Consultations led by the Permanent Under Secretary of the FCO and our Foreign Secretary, the Defence Consultative Group, the Joint WG on International Terrorism and Drug Trafficking and the Indo-UK Consultations on International Strategic Issues.
Terrorism
10. In the wake of 9/11, the UK Government has begun to adopt a robust approach to terrorism including terrorism affecting India. In foreign policy, the FCO Strategy Paper released on December 2, 2003, had identified international terrorism and the spread of weapons of mass destruction as the most �catastrophic� threats to the UK�s national security in the early twenty-first century, relegating conventional military threats to the background. The paper also identified religion as a force in international relations, with religious tensions abroad, for example, on the sub-continent, having the potential to affect the UK�s domestic security.�
11. Both UK Prime Minister Tony Blair and then Foreign Secretary Jack Straw had condemned the violence and called for an end to Pakistan�s support for terrorism in Kashmir.� Mr. Straw had acknowledged in Parliament that there was a clear link between the ISI and terrorist groups operating in J&K. During the joint press conference with our Prime Minister in September 2004, PM Blair totally condemned any terrorism in Kashmir.� In his remarks to the press following the September 8, 2005 Summit, pmtb acknowledged that the world had been reluctant to recognize the insurgency in Jammu and Kashmir as terrorism. He added that whether it was in Palestine, Iraq, Afghanistan, Kashmir, or Chechnya - terrorism should never be compromised with nor ever justified.� The July 7 bombings in London and the recent foiled attempt to bomb aircraft flying between the UK and US have contributed to the Government taking tough measures domestically on counter-terrorism. Our PM, who was in the UK for the Gleneagles Summit, strongly condemned the 7/7 bombings of London�s subway and bus system.� Following the Mumbai train blasts, PMTB condemned the attacks and said there could never be any justification for terrorism. He expressed his country�s shared determination to defeat terrorism in all its forms and solidarity with India.�
12. Following India�s request, the terrorist organisation Harkat ul Jehad-e-Islami was one of the 15 newly banned terrorist groups by the UK government on October 10. LTTE had been banned earlier.� The Hizbul Mujahideen has been added to the EU list of terrorist organisations.
13. The last round of the JWG on Counter-Terrorism with UK was held on 27-28 June 2005 in London and there have been consultations in follow up.
Consular Issues�
14. Visas issued to UK nationals to visit India are increasing at a yearly rate of nearly 20% with virtually all visas issued the same day. In 2006 we expect that around half a million UK residents will visit India, matching the half million Indians who visit the UK.
MOU on return of illegal immigrants
15. Indian nationals used to account for the highest (40%) number of asylum applications in the UK, with around 2000 Indians nationals applying in 2002. To address this problem, an MOU on the return of illegal immigrants, agreed upon as a pilot project for a period of one year, was signed during the UK Home Secretary�s visit on 30 January 2004. Following India�s inclusion in the White List on 15 February 2005, intake fell by 46% from March 2005 to September 2005. The MoU has been renewed till January 29, 2007. All efforts have been made to streamline the implementation of the MoU, resulting in an appreciable improvement in the number of verifications. We have so far confirmed the credentials of about 450 Indians who have since been repatriated. The records of a further 1,000 have been verified and removal orders are awaited from the UK Home Office.
The new Points Based System of Managed Migration
16. The UK had indicated that tackling illegal immigration was a priority during its EU Presidency.� A new point based system was introduced by the Home Office on March 7, 2006. This seeks to ensure that only those who benefit Britain can come to work or study in the UK, and also to crack down on abuse and illegal immigration and increase removals. There would be quantitative limits set according to immigration risk. With the large number of workers available from new EU countries, entry routes for low skilled migrants from non- EU countries would be quota based, time limited and only from countries with which the UK has effective returns arrangements (for repatriating immigration offenders).� The new system should not adversely impact the movement of peoples.� More than 470 Indian companies are already represented in the UK in the IT sector alone and several Indian companies source their key personnel from their Indian branches.� India is the largest developing country investor in the UK and is in the first 10 overall.� In a few years the number of students coming to the UK, primarily self-financed, has gone up from 4,000 to over 16,000 per year and the trend is increasing. Indian tourists form a substantial proportion of overseas high-spending visitors in the UK.
Defence Relations
17. Defence cooperation takes place under the India-UK Defence Consultative Group (DCG) formed in 1995, which meets at the level of the Indian Defence Secretary and UK Permanent Under Secretary for Defence respectively. The Military Sub-Group, the Defence Equipment Sub-Group and the Defence Research and Technology Sub-Group Sub-groups hold their meetings simultaneously with the DGC and report to it.
18. Shri Shekhar Dutt, Defence Secretary, led a delegation to the 9th India-UK Defence Consultative Group meeting on 26-28 September 2005 in London. The 10th meeting is scheduled to take place in London on November 27-29, 2006.
19. Hawk: An MOU on the purchase of 66 Hawk Advanced Jet Trainers (AJT) from British Aerospace Systems of the UK for the Indian Air Force, 24 to be procured in flyaway condition and the remaining 42 to be manufactured under license in India by M/s. Hindustan Aeronautics Limited, was signed in March 2004. The delivery of 24 aircraft in fly away condition will start from Sep 07 and would be completed by Feb 08.
20. Joint Indo-UK exercises: The ten-day exercise Emerald Mercury held in India in March 2005 was the first of its kind between the two countries, marking the biggest land deployment of British military personnel in India. The Indian Air Force and Royal Air Force have planned their first joint air exercise Inder Dhanush at Gwalior on 2- 13 Oct 2006, which could be regularised on an annual basis. Naval cooperation includes the Konkan series of bilateral exercises, product support for Seaking and Sea Harriers, training facilities offered by the Royal Navy and continuation of bilateral ship visits including participation in the 200th year Celebration of the Battle of Trafalgar in 2005 and RN ships visiting Indian ports. The first Navy to Navy staff talks were held in September 2004 in New Delhi. The Indian Navy and the British Royal Navy held one of their biggest joint exercises Konkan 2006 on May 17-29, 2006 off India's west coast between Goa and Mumbai.
Indo-UK Round Table
21. The India-UK Round Table, a non-governmental body set up in 2000 for long range and �out of the box� thinking on the future of our bilateral relationship, held its 9th meeting in Goa on March 10-11, 2006. Lord Chris Patten is the Co-Chair from the UK side while Dr. Nitin Desai is the Indian co-Chair. It was decided to commission further studies on India-UK relations up to 2020 and on possibilities for cooperation in the health sector.� The Indo-UK Round Table also called for two science and innovation studies.� In follow up the UK has drawn up two draft documents (i) the "mapping study", which will �map� the extent and depth of existing S&T collaboration links between India and the UK; and (ii) the "wealth creation & innovation study" which will examine models of R&D collaboration and other examples of successful commercialization to suggest how the increasingly close connections between the UK and Indian science bases can better be exploited commercially.
Science & Technology
22. In order to enhance S&T cooperation between India and UK, it was decided in June 2005 to upgrade the Joint Committee on S & T to the Indo-UK Science and Innovation Council (SIC). Shri Kapil Sibal, Minister for Science and Technology, led a delegation to the UK from June 26-28, 2006 for its first meeting. The delegation included Prof. CNR Rao, Chairman, Scientific Advisory Council (SAC) of the PM, Dr. R.A. Mashelkar, Secretary, DSIR and DG, CSIR and Dr. T. Ramasamy, Secretary, Department of Science and Technology. The UK side was led by Lord Sainsbury, the UK Secretary of State for Science and Innovation and included Sir David King, Principal Scientific Advisor to PMTB. Both side discussed possibilities of cooperation in science and technology and agreed to be equal partners in future initiatives.
23. The meeting endorsed the UK-India Education and Research Initiative (UKIERI) announced by PMTB and agreed to develop a strategic relationship in meeting the challenges of the future - climate change, energy security, health and infectious diseases etc. and on innovation and engagement with industry. The Council agreed that the UK and India could usefully collaborate on entrepreneurship, technology transfer and intellectual property.
INDIA-UK ECONOMIC RELATIONS
24. There has been an intensified exchange of visits by ministers and senior officials from both sides. British ministers have been regular participants at the CII Partnership Summits, the NASSCOM Annual Conferences, IT.com, Frames and other business events and exhibitions.� Indian ministers and senior officials also regularly visit the UK, as do delegations from business chambers. The CII leads an annual Mission of CEOs every summer, FICCI brought a CEOs Mission in October 2004, ASSOCHAM and PHDCCI brought delegations in 2006, and the Indian Merchants Chamber is organising an �India Calling� conference in London on 2-3 October 2006. In addition, sectoral industry delegations interact with their British counterparts, and India participates annually at the World Travel Mart in London and at other important trade events. Besides, NASSCOM and Financial Times organise a Conference on Outsourcing to India every year in London.�
25. Various bilateral mechanisms have been established in recent years to facilitate economic cooperation between India and the UK including a Joint Economic and Trade Committee, Economic and Financial Dialogue (launched in February 2005), a Joint Working Group on Power and an Indo-British Coal Forum. Moreover, under the Indo-British Partnership established in 1993, the UK side has launched an Indo-British Partnership Network in the UK in December 2005. Lord Karan Bilimoria of Chelsea, Chief Executive, Cobra Beer chairs the IBPN while Shri Sunil Mittal, Chairman and Group Managing Director, Bharati Enterprises co-chairs the IBP Board from the Indian side.
26. The most important bilateral mechanism in the economic arena is the India-UK Joint Trade and Economic Committee (JETCO) which was launched in New Delhi on 13 January 2005 by Commerce & Industry Minister Shri Kamal Nath and Secretary of State for Trade & Industry Ms. Patricia Hewitt. The second plenary meeting of JETCO took place in London on 31 January 2006 under the co-chairmanship of the Rt. Hon. Alan Johnson, the then Secretary of State for Trade and Industry and Shri Kamal Nath, Minister for Commerce and Industry. Deliberations at the JETCO included reviewing the performance of the respective economies, trends and developments in bilateral trade and investment as well as the international economic context. The leaders noted the successful visit of the high-level UK business delegation to India led by Prime Minister Tony Blair in September 2005. Both sides agreed to establish a structured dialogue to address Intellectual Property Rights and a bilateral dialogue on venture capital for SMEs. It was further agreed that the first Investment Summit would be held in London in 2006. Both sides also welcomed the establishment of Indo-British Partnership Boards in both countries, and the establishment of the IBP Network (IBPN) in the United Kingdom, and were of the view that the two boards should play a leading role in driving private sector interaction between the two countries, together with other private sector bodies including the Confederation of British Industry (CBI), Commonwealth Business Council (CBC), Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI).� The Ministers welcomed the progress made in the JETCO working groups on Agribusiness, Healthcare, High Technology and Infrastructure which had held discussions on 30 January 2006, and invited the Chairmen to submit further reports to the mid-year JETCO review meeting of senior officials. It was also formally agreed to establish a bilateral experts group within the private sector to identify issues and opportunities in accountancy services in India and the UK. A British proposal to establish a working group to enhance links in creative industries was also received favourably.
27. Thereafter, an India-UK Business Summit was held in London from 26 - 28 June 2006. The Minister of Commerce and Industry, Mr. Kamal Nath and Minister of Science and Technology, Mr. Kapil Sibal attended the event, which included holding of the second India-UK Business Leaders Forum on Investment, Infrastructure and Innovation at Lancaster House on 27th June. The CII CEOs Mission represented Indian business at the Forum. The Forum provided a platform to the highest levels of Government and business from both countries to discuss issues and seek mechanisms to increase investment flows as well as become partners of choice in science, innovation and progress. The event was a huge success. Prominent speakers included Lord Sainsbury, Secretary of State for Science and Innovation, Mr. Kamal Nath, Minister of Commerce and Industry, Mr. Kapil Sibal, Minister of Science and Technology, Mr. Kamalesh Sharma, Indian High Commissioner to UK, Sir Michael Arthur, British High Commissioner to India and Dr. Ajay Dua, Secretary, Department of Industrial Policy & Promotion. Lord Sainsbury and Mr. Kamal Nath also signed a letter of intent to cooperate in the field of intellectual property rights (IPRs). The Commerce and Industry Minister met his counterpart, the Rt Hon Alistair Darling, Secretary of State for Trade & Industry. The Indo-British Partnership Network also held its meeting in the margins of the Forum under the co-chairmanship of Lord Karan Bilimoria of Chelsea and Mr. Sunil Mittal, Vice President of CII.
28. A mid-term review of the Joint Economic and Trade Committee (JETCO) was also held to coincide with the Summit. The meeting reviewed the progress made by working groups set up under JETCO. It was reiterated that the Investment Summit would be organised in London on 10 October 2006 during the visit of Prime Minister Manmohan Singh to London.
Bilateral Trade
29. India and the UK have had a long trading relationship. India is the UK's 15th largest export market and its largest export market in the developing world (ahead of China). In 2005, bilateral trade grew at a rate of 23.6%. Trade in goods was � 5.6 billion and trade in services � 1.8 billion. The balance of trade is currently in India�s favour. India�s main exports to the UK are engineering goods, ready made garments, textiles, gold jewellery, footwear, marine products, rice and agricultural products, etc.� The main imports from the UK are uncut diamonds, metal scrap, chemicals, machinery, transport equipment, scientific equipment, etc. The UK is the largest market in Europe for Indian IT services. Many British blue chip companies (about 30) and some smaller companies have off-shored work to India creating over 60,000 jobs. Conservative industry estimates are that British businesses now save upwards of �I billion every year due to off-shoring, the bulk of which is accounted for by India.
Bilateral Merchandise Trade (in � million)
| Year |
UK Exports to India |
% change |
UK Imports from India |
% change |
Total |
% change |
India�s Balance of Trade |
| 1999 |
1450 |
+16.7% |
1426 |
+3.2% |
2876 |
+9.6% |
-24 |
| 2000 |
2058 |
+41.9% |
1651 |
+15.8% |
3709 |
+30% |
-407 |
| 2001 |
1797 |
-12.7% |
1825 |
+10.5% |
3622 |
-2.3% |
+28 |
| 2002 |
1754 |
-2.4% |
1793 |
-1.7% |
3547 |
-2.1% |
+39 |
| 2003 |
2293 |
+30.1% |
2147 |
+16.1% |
4375 |
+23% |
-146 |
| 2004 |
2243 |
-2.18% |
2340 |
+9.0% |
4583 |
+3.0% |
+97 |
| 2005 |
2813 |
+27.4% |
2829 |
+20% |
5632 |
+23.6% |
+34 |
Bilateral Trade in Services (� million):
| |
Exports to India |
Imports from India |
| 2000 |
549 |
663 |
| 2001 |
664 |
814 |
| 2002 |
619 |
804 |
| 2003 |
688 |
783 |
| 2004 |
812 |
1,015 |
(Office of National Statistics and Overseas Trade Statistics, HM Customs & Excise)
Bilateral Investment Flows
FDI from the UK
30. The UK�s total FDI outflow during 2002, 2003 and 2004 was US$ 50.3 billion, US$ 66.4 billion and US $ 65.4 billion respectively. However, very little of this investment found its way into India. While the UK was traditionally the largest cumulative investor in India, post-liberalisation FDI inflow from the UK into India has been only US$ 2.026 billion (i.e. from August 1991 to May 2006), making it the 5th largest investor in terms of actual inflow accounting for approx. 6% of the total investment of US$ 38.9 billion.
31. Top sectors attracting FDI inflows from UK are electrical equipment including computer software & electronics (22.29%), fuels� i.e. power & oil refining (20.87%), services, both financial & non-financial (11.79%), timber products (8.28%) & telecommunications (5.59%). Some major UK insurance companies commenced their operations in India in 2002. Leading British oil and gas companies, including British Gas, Shell and Cairns Energy, have expanded their operations and increased their investments in India. BP has also been in negotiations for investing in refinery and exploration and production. An increasing number of British companies are also moving to India for setting up BPO operations.
| Year |
Aug 1991�
Mar 2003 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
Cumulative |
| Amount
(million US$) |
1,106 |
167 |
101 |
266 |
47 |
2,026 |
Source: DIPP, GOI
FDI from India
32. Meanwhile, the UK is one of the world�s most attractive destinations for foreign investment and the top investment destination in Europe. In 2005-06, it received total foreign direct investment of US$ 165 billion (� 91 billion), tripling the previous year�s figure and making it the largest recipient of FDI in the world, beating both the US and China. The flow of Indian investments into the UK which began as a trickle in the late 1990s has also now turned into a flood. In 2004-05, India became the eighth largest investor in the UK and in 2005-06, Indian companies doubled their investments in the UK to emerge as the third largest foreign investor in the country and the largest developing country investor (in terms of number of projects). According to the UK Inward Investment Report prepared by UK Trade & Investment, Indian companies invested � 1.02 billion in 76 projects in 2005-06, creating a total of 1,449 jobs and safeguarding another 2,523 (Total number of jobs created and safeguarded - 3,972). The number of investment projects increased by a whopping 111%. This is all the more surprising as India was nowhere on the investment scene a decade ago.
33. While Information and Communications Technology remains the dominant sector for Indian investment accounting for 54% of all investment (26 projects), there has been strong growth in investments in pharmaceuticals and healthcare (12 projects) and automotive and engineering sectors (6 projects). Financial services also received substantial investment with 8 projects. Nearly half of the 76 projects in 2005-06 are located in London, while the remaining are spread across various regions. India has now emerged as the second largest overseas investor in London, after the US. At the same time, more Indian companies are looking to do business outside London, reflecting the deepening of the bilateral investment relationship. A recent survey conducted by FICCI on outbound investment by Indian companies from January 2000 to July 2006 also confirms that the UK is the second most favoured investment destination for Indian companies after the US.
34. The rise in Indian investment in the UK has been due to Indian investors taking advantage of Britain's expertise in high-value activities such as research & development, science and technology and innovative design, as well as the City of London�s status as an international financial capital. Indian companies also find it convenient to locate their European headquarters in the UK to access Europe�s 500 million consumers. A growing number of Indian companies are also listing on the London Stock Exchange to raise their international profile, tap some of the world�s largest pools of capital and gain entry into European and global markets. Recent listings include IT services firm Rolta India ($100 million), Nagarjuna Construction ($115 million), Bajaj Hindustan ($135 million) and Federal Bank ($80million).��
35. It is encouraging to note that as the volume, scope and breadth of Indian projects expands in the UK, Indian investment is getting the recognition it deserves. In view of the growing investment ties, the City, the Mayor of London (who heads the Greater London Authority) and the London Stock Exchange are all in the process of opening offices in India. The local chambers of commerce are also waking up to the �India opportunity.� The British Chambers of Commerce will release an India Fact File in October 2006 containing detailed information for those interested in trade and investment with India. The Fact file would be made available to the chamber�s 135,000 members. The London Chambers of Commerce have meanwhile entered into a MoU with ASSOCHAM in May 2006 and will be partnering IMC�s India Calling event in October 2006.
36. In this environment of all-round economic interest in India, the House of Commons Select Committee on Trade & Industry in June 2006 published its report on �Trade and investment opportunities with India�. The Committee focused on the difficulties and opportunities faced by UK businesses wishing to trade or forge investment links with India, with particular reference to opportunities in the IT, life sciences, aerospace and financial services sectors; the role of British institutions of higher and further education in developing such links; and the role of the UK Government in assisting businesses, including the relative responsibilities of UK Trade and Investment and the Regional Development Agencies. Their major findings were that the UK was not as engaged with India�s markets as it should be, the Indian market was liberalizing at a pace not fully appreciated in the UK, and the UK�s institutional arrangements to support trade and investment with India were characterized by enthusiasm but also by confusion. They encouraged the UK Government to focus on forging more economic links with India, else the UK may miss the last train to India! The Treasury Committee of Parliament also paid a visit to India in June 2006 as part of their study on globalization.
Information Technology
37. The United Kingdom and India have emerged as major partner countries in the Information Technology sector.� A large number of Indian IT companies have substantial operations in the UK. Indian professionals have also filled in skill shortages in the UK�s IT sector.� There are some fears of job losses on account of outsourcing to India, but the reality is that the UK economy is growing strongly and the employment situation, including in call centres, has never been better. Moreover, in a reversal of trends, the Indian IT firm HCL Technologies has set up a call centre in Belfast employing several hundred people.
38. NASSCOM opened its UK Chapter in September 2003, its first such overseas office.� It has a Memorandum of Understanding with its British counterpart trade association Intellect, and also with the Welsh Development Agency, which has now been a Platinum Sponsor of NASSCOM�s Annual Conference for many years.� In association with the Financial Times, NASSCOM also holds a prestigious annual conference in London on Outsourcing to India. In November 2005, FT-NASSCOM held the annual conference on �India Outsourcing Event� in London.
Air Services between India and the UK
39. Over 400,000 British tourists and a rapidly growing number of business people visit India every year. The UK-India air services market used to be grossly under-served which was proving to be a major bottleneck in promoting tourist and business between the two countries. To remedy the situation, India and the UK signed agreements in September 2004 and April 2005 to increase the number of air services. A revised India-UK Air Services Agreement was signed during the bilateral Summit in India on 8 September 2005, which has resulted in a further increase in direct air services between the two countries.
Energy
40. The Director General of Hydrocarbons, GOI and the Department of Trade & Industry, signed an MOU during the Indo-UK Summit in September 2005. On April 7, DGH also signed MoUs with two leading UK universities, Imperial College in London and the University of Aberdeen to promote cooperation in the hydrocarbon sector. The road show for the sixth round of the New Exploration Licensing Policy (NELP-VI) offering 55 blocks was held in London on March 27, 2006. 38 prominent companies were present including BP, Shell, Total, Statoil, Chevron, BG, Repsol, Cairn Energy, Woodside, Petrobras, Maersk, Devon, ENI, Burren, BHP, Ensearch, Goepetrol and Premier oil. Shri Vilash Muttemwar, Minister for Non-Conventional Energy Sources (MNES) met Mr. Ian Pearson, Minister of State in the Department of Environment, Forest and Rural Affairs (DEFRA) in London on June 14, 2006. Issues discussed included R&D cooperation in the renewable energy sector, investment by the UK in an SEZ set up for renewable energy and Sustainable Development.
Environment
41. India and the United Kingdom signed a declaration on cooperation to meet global environmental, economic and social challenges during a visit by Shri A. Raja, Minister for Environment and Forests from 9 - 13 Oct. 2005.�� The two sides agreed on a high-level Sustainable Development Dialogue as part of an initiative by their Prime Ministers to strengthen ties in research, environmental impact assessment, public-private partnerships, sustainable forestry, illegal trade in animals, and science and technology.� Britain has already set up an India Task Force to aid cooperation in sustainable development. An immediate fallout of the agreement could be British help in cleaning the Yamuna river in Delhi. This is the first time the UK has signed a sustainable development pact with any country. The UK has conveyed the high priority it attaches to cooperation in this sector with India.
42. A delegation led by Shri Namo Narain Meena, the Minister of State for Environment and Forests attended the Dialogue on Climate Change, Clean Energy and Sustainable Development in London on November 1, 2005 - organized in follow up to the Gleneagles G8 Summit on climate change.� UK�s Biodiversity Minister Jim Knight visited India on 2 - 6 February, 2006 to attend the Delhi Sustainable Development Summit to take forward the UK-India Sustainable Development Dialogue. Shri Vilas Muttemwar, Minister for NES, visited London on June 14, 2006 and met Mr. Ian Pearson, Minister DEFRA (Deptt for Environment, Forests and Rural Affairs).
Biotechnology and Healthcare
43. Biotechnology has been identified as one of the main areas for enhanced cooperation. Leading Indian biotechnology companies are collaborating with clients across the UK and Europe.� AstraZeneca has established an R&D Centre in Bangalore.� GlaxoSmithKline and Ranbaxy have signed an agreement for joint research and development.� Industry delegations from both countries visit each other regularly.
44. Healthcare is another potential area for cooperation.� India has supplied doctors and nurses in substantial numbers for the UK�s National Health Service (NHS), with about 26% of doctors employed in the NHS being of Indian origin. However, the new immigration rules announced earlier this year have had a negative impact on the employment of Indian doctors, many of who are unable to find jobs. Meanwhile, Indian pharmaceutical companies are marketing their products in the UK and many such as Nicholas Piramal have invested in production facilities in the UK. The UK is also a major source of medical equipment. The Indian Healthcare Federation comprising top Indian private sector healthcare organisations and super-speciality hospitals visited the UK in September 2003 to explore potential partnerships and opportunities. UK Trade and Investment also regularly sends teams of experts from the healthcare sector to India to explore possibilities of cooperation. The second India Medical Tourism Expo was held in London in June 2006. UK consumers are also showing interest in complementary & alternative medicine in which India has considerable strengths.
New regulations affecting Indian doctors
45. Approximately 30% of the doctors in the UK�s National Health Services (NHS) are Indian. At the India-UK Round Table, it was estimated that Indian doctors contribute �4.5 billion to the UK economy, taking into account the cost of training for approximately 20,600 Indian doctors on the UK register. Every year a number of junior doctors from India used to write the PLAB examinations and were subsequently allowed to seek employment in junior posts in NHS trusts/ hospitals/ local councils under the �Permit Free Training� (PFT) scheme. However, the new immigration law announced in March 2006 by the UK abolished PFT.� Now every NHS trust/hospital first has to ensure that there is no UK or EU national available. The new rules have added to their distress and several have been forced to leave for India.� In June 2006, the GMC of the UK cancelled all overseas PLAB examinations till January 2007. These issues have been taken up with the UK Department of Health and Members of Parliament in the UK. The need for suitable transitional arrangements for doctors already in the UK under previous regulations has been emphasized.
UK Development Assistance to India
46. India has remained the single largest recipient of bilateral development assistance from the UK, with �198 million disbursed in 2003-04. The target for 2004-05 was �250 million. The UK is India�s third largest source of ODA, and the largest in terms of grant aid. The UK was one of the developed countries which did not suspend ODA to India after the nuclear tests of 1998.�
Customs Cooperation
47. A MoU on Customs cooperation was signed on 16 March 2001, which enables both countries to cooperate in combating economic and drug offences and contacts established with the newly established Serious Organised Crime Agency (SOCA).�
Education
48. The market for international students in the UK is estimated to contribute $9 billion to the British economy as non-EU students pay up to five times that of UK and EU students. The number of student visas issued to almost entirely self-financed Indian students increased dramatically from under 4000 in 1999 to 15000 in 2005, contributing �300 million to the UK economy.� After China, India is the second largest sender of students to UK. The UK aims to attract 100,000 more international students by 2011.� UK universities are approaching students from small towns in India besides the four metropolitan cities. Over 14 UK Universities have opened full-time offices in India. In addition, several UK Colleges have approached GOI for funding for Chairs / scholarships on India. In September 2005, India announced it would fund a Chair named after Pt. Jawaharlal Nehru at Cambridge University to project the Indian economy, business and management. Further, efforts are underway to create Chairs dedicated to India supplemented by India Business Centres in leading Business Schools with the support of UK corporates.�
49. To increase Indian students enrolment, PMTB announced the UK-India Education and Research Initiative (UKIERI) in September 2005, launched in London on April 18, 2006.� The Initiative solicited contributions from industry and Shell, BP, BAE Systems and Glaxosmithkline have pledged funds. 50 research fellowships have recently been announced.� The first meeting of the India-UK Science and Innovation Council in London on June 2006 endorsed UKIERI and agreed to match the UK�s contribution for bilateral research projects. The Initiative would focus primarily on higher education and has accepted bids for projects from academic institutions during the current UK Financial Year. Mr. Blair said from May any overseas student who completed a postgraduate degree or undergraduates in sectors needing extra skills could work in Britain for up to 12 months after graduating. MPs from the Conservative Party have demanded that this period be extended to two years, as per the Scottish model.
Culture
50. The Nehru Centre is among the most active of India�s cultural centres abroad and organises a wide range of performances, exhibitions, lectures and film shows as a platform for Indian culture in the broadest sense, focusing on the role played both by British and Indian artistes in promoting greater cultural understanding. It has also launched several books, by both Indian and British authors and promoted the participation of British authors in Indian literary festivals.� Department of Culture has conveyed its support to the exhibition of Chola Bronzes at the Royal Academy of Art (December 2006-February 2007). The Ministry of Culture has proposed an exhibition of Gupta Art in France in early 07.� Discussions are continuing with Victoria & Albert Museum to host this exhibition in London from August to October 2007.
51. The year 2007 represents the 60th Anniversary of India�s Independence.� A series of events are being planned to highlight the emergence of new cultural forms, such as the British Natyam and gradual mainstreaming of Indian culture in United Kingdom, thus abandoning the notion of a culture �historically frozen in time�.
Film Co-Production Agreement
52. India and the UK, signed a film co-production agreement during the UK Secretary of State for Culture, Media and Sport, Ms. Tessa Jowell�s visit to New Delhi on December 5, 2005. This will allow film producers from the two countries to pool creative, artistic, technical, financial and marketing resources to produce films and television programmes. Indian film producers will also benefit from various tax benefits offered recently by the British Government for films produced under such Agreements. Minister Tessa Jowell again visited India in March 2006 for the FICCI Frames event.
Tourism
53. The India Tourism Office undertakes major efforts to publicise the potential of tourism in the UK market. Complaints persist concerning the quality of airports and immigration bottlenecks in India. Tourism Minister Renuka Chowdhury led a large Indian delegation to the World Tourism Mart that was held in London in November 2005. Tourism in Jammu & Kashmir will also get a boost if the UK withdraws the adverse travel advisory for the state.
Indian Community in the UK
54. Bilateral trade and economic relations are facilitated by the presence of about 1.2 million strong Indian community in the UK, which represents the single largest ethnic segment of the country's population. The contribution of NRIs in the UK has been notable from the economic point of view, especially in the fields of industry, medicine, accountancy, law, management, financial services and food. 40% of the pharmaceutical trade of the UK is run by Indians who are also the mainstay of several other retail trades in the country. The Indian community has also made progress in the media, and has left other South Asian communities far behind in economic terms and educational achievement. It also has a significantly lower crime rate. There are 6 MPs and 17-18 members of the House of Lords of Indian origin.�