Top Britain ministers woo India under PM Modi

MUMBAI (AFP) - Britain's finance minister announced a US$428 million (S$534 million) deal with India's military on Monday after arriving in the country to seek stronger trade and investment ties with new Prime Minister Narendra Modi's government.

George Osborne and Foreign Secretary William Hague landed in Mumbai for the two-day visit to drum up business for Britain, the latest foreign government delegation rushing to court Modi following his landslide victory in May.

Osborne announced the completion of a £250 million (S$534 million) deal for defence company MBDA UK to supply air-to-air missiles to the Indian Air Force, creating "hundreds of jobs" in Britain.

"India is embarking on an exciting journey of reform under your new government," Osborne told business leaders in India's financial hub, assuring them there was "no more reliable partner" on that journey than Britain.

The ministers' visit, which was taking them to New Delhi later on Monday, was expected to focus on forging deeper diplomatic and economic ties including in defence and infrastructure.

When asked by the BBC if Britain should be selling weapons to a country still mired in poverty, Osborne said India had some "very difficult neighbours", without specifying.

He said he wanted India to defend itself "with the very best of the British defence industry".

Reform-minded Modi has raised hopes for foreign investors with his pledges to open up India's stumbling economy, spur investment and improve the country's shoddy infrastructure after progress stalled under the previous government.

"The excitement here is matched by new confidence among international investors abroad in the future of the Indian economy," Osborne said.

European governments and the United States boycotted Modi for a decade over deadly religious riots in 2002 while he was running his home state of Gujarat.

But they are now redoubling their efforts to make up for lost time, with Russia's deputy prime minister, the French foreign minister and US Senator John McCain also visiting in recent weeks.

The British pair are expected to hold talks with Indian Foreign Minister Sushma Swaraj and Finance and Defence Minister Arun Jaitley among others on Tuesday before meeting Modi.

Britain is holding out hope that a stalled deal worth at least $12 billion for France to supply fighter jets to India could fall through, opening the door for the Eurofighter jet which is partly made in Britain.

In Mumbai, Osborne announced that Indian pharmaceutical company Cipla will invest £100 million in drugs research in Britain, while auto maker Mahindra will invest £20 million in electric car development.

"Indian businesses are huge investors in the UK. I want more of that investment," Osborne said.

He expressed Britain's commitment to developing Indian infrastructure projects such as the proposed Bangalore-Mumbai economic corridor, as well as helping to develop new Indian bond markets and financial services.

Hague, who announced an increase in scholarships and grants for Indians wanting to study in Britain, called for a closer relationship in foreign policy amid "signs the world is becoming systemically less predictable and less stable".

Britain believes it is time for India's political, economic and cultural clout to be "more strongly felt" in world affairs, Hague added.

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