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UK defence firms should invest, make, co-create, co-develop in India: UK India business body

Richard McCallum, vice chair of UKIBC, says India is geopolitically important, and cannot be seen through just the ‘export of goods’ perspective.

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New Delhi: The Indo-Pacific region is the economic growth engine of the world and companies from the United Kingdom are looking at engaging more with India as a place to invest, manufacture, co-create and co-develop, the UK India Business Council (UKIBC) has said.

Noting that India is geopolitically important, Richard McCallum, vice chair of UKIBC, told ThePrint in an interview that India cannot be seen through just the export of goods perspective. 

McCallum is hopeful of the early completion of a proposed Free Trade Agreement (FTA) between India and the UK, which he said would open up more opportunities.

McCallum, who looks after the defence sector at the UKIBC, noted that this sector traditionally sits outside the standard FTA, but added that there are aspects that are important to UKIBC defence members. He cited Intellectual Property Rights and customs duty as a common goal for companies. Anything that can improve the operating environment would be beneficial and welcomed by our members, he said.  

Talking about the recent visit of the British Navy’s Carrier Strike Group to Mumbai, McCallum said it was a marker of the UK’s ambitions in the region and its desire to strengthen its relationship with India. 

UK’s flotilla had passed through the Indian Ocean in July on its way to the South China Sea, the first such tour for the British.

It also joined two American aircraft carriers and a Japanese helicopter carrier to jointly patrol the waters around Taiwan in early October. 

Asked about the UK’s sudden tilt to the Indo-Pacific, McCallum said, “This is both economic and security imperative at work. The growth is going to come from this region. This region is the economic growth engine of the world.” 

He added, “The UK wants to establish links in this region, especially since it is not part of the EU. And for the security aspect as well… India is geopolitically very important and the UK’s engagement is a reflection of that.”

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Want to Make in India

McCallum said UKIBC has been encouraging its defence members to look at India not just from the export of goods perspective. 

“We think that is an increasingly outdated model for engaging with the Indian market in defence. Look at the way India is travelling in terms of its indigenisation agenda,” he said.

“What I am telling my members is to think of India as a place to invest, a place to make, co-create, co-develop. Eventually we hope to export from India. So that is our strategy,” he added.

UK firms are very keen on some of the mega Indian defence deals in the offing including collaboration of the fifth generation fighter aircraft programme (AMCA) besides the plans to make six new conventional submarines (P75I).  

According to UKIBC, of the five original equipment manufacturers shortlisted for the submarine project, critical equipment for Navantia’s S-80 and Daewoo’s KSS-III platforms have been supplied by UK companies, which includes Weapons Handling Equipment (WHE) by Babcock International and Towed Array Sonar System by QinetiQ. UK Industry has also been supplying pressure hull domes for the S-80. 

“There are a lot of companies (British) that are investing here (India). There are more in the pipeline. It is true that UK companies (contribution) are under the radar. For example, in Tejas aircraft, a lot of that technology is from the UK,” he said, adding that they are looking at future projects but “not necessarily headlining the programme”.

He underlined that UKIBC is strongly encouraging its members to invest in India. 

“It is increasingly the only way to partner here. I think it is necessary to be part of the Indian story going forward,” he said.

Asked what more can India do to help UK businesses grow here, he said New Delhi’s ranking on ease of business has improved drastically. 

“Anything that continues to improve the operating environment is welcome. FDI was increased to 74 per cent (defence sector) but could be streamlined further. Whatever the Government of India can do to improve ease, business will follow. UK companies want to partner with Indian companies, want to be part of this market,” he said.

McCallum also said that the UK is looking at more government-to-government deals and projects with India. 

(Edited by Arun Prashanth)

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