British PM flies to India for post-Brexit trade preparations

Britain's Prime Minister Theresa May looks on as she arrives at the airport in New Delhi on Nov 6, 2016.
Britain's Prime Minister Theresa May looks on as she arrives at the airport in New Delhi on Nov 6, 2016.PHOTO: AFP

Visit to focus on lifting barriers and paving way for free trade deal as soon as possible

LONDON • British Prime Minister Theresa May flew to India yesterday, a nation she called a "key strategic partner", to prepare the ground for key trade agreements after Britain quits the European Union.

The premier will arrive in New Delhi with Trade Secretary Liam Fox and a delegation of 33 business leaders to cement links with the world's fastest-growing major economy and seek to remove barriers to British companies winning contracts.

"I'm very pleased that this is my first bilateral visit outside of Europe and it's to India," Mrs May said yesterday at Heathrow Airport.

"I'm pleased also that I'm taking a number of businesses with me - not just large businesses but small and medium-sized businesses as well, because there are huge opportunities for British business in trading with India, and we know that we have significant investment here in the UK from India."

While Britain is not permitted to open negotiations with India over a trade deal until it has formally started proceedings to leave the EU, Mrs May will use talks with Prime Minister Narendra Modi to explore what a post-Brexit relationship might look like, according to a person familiar with her plans.

Mrs May's office said the visit would focus on breaking down trade and investment barriers and paving the way for a free trade deal as soon as possible after Brexit, which is not expected to happen before 2019.

Britain will press India to allow its law firms to operate there, and will also offer its government expertise in areas such as deregulation and tax to help make India a more attractive business environment. Mrs May will also seek to pave the way for British companies to gain from India's planned investment in health, skills and infrastructure.

Mr Fox, who will lead the charge for trade deals around the world after Britain starts the process of leaving the EU by triggering Article 50 of the Lisbon Treaty, has praised India as a beacon of free trade.

Mr Fox, a former defence secretary, will make the case for British armaments and aerospace companies to have a bigger share of the market in India, which has the second-biggest army in the world and is the largest importer of military equipment.

Mrs May will visit New Delhi and outsourcing hub Bengaluru before leaving tomorrow. Her office said commercial deals to be signed during the trip were expected to create a total of 1,370 jobs in Britain.

Her office also said the two will launch a partnership on smart cities and urban development, which could generate business worth up to £2 billion (S$3.46 billion) for British firms over the next five years.

One potential area of difficulty is her plan to curb the annual level of net migration to under 100,000 from its rate of more than three times that, as India is keen for Britain to welcome more of its students and skilled workers.

When asked if Mrs May would raise the issue of Tata Steel with Mr Modi, an official declined to comment. The firm put its British steel operations up for sale earlier this year, but suspended this in July due to uncertainty over the Brexit vote.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on November 07, 2016, with the headline 'British PM flies to India for post-Brexit trade preparations'. Print Edition | Subscribe