British PM on India trip amid scandal

BAD TIMING::Cameron’s trip comes after India said on Friday that it wanted to void a US$750 million deal for a dozen helicopters after allegations of corruption surfaced

Reuters, MUMBAI, India

Tue, Feb 19, 2013 - Page 6

British Prime Minister David Cameron arrived in India yesterday as a graft scandal engulfed an Anglo-Italian helicopter deal and immediately told his hosts they should open up their economy because Britain has done the same for Indian firms.

Making his second visit to India as prime minister, Cameron’s trip comes days after a similar trade mission by French President Francois Hollande, underlining how Europe’s debt-stricken states are competing to tap into one of the world’s fastest-growing economies.

Cameron’s delegation, which includes representatives of more than 100 companies, is the biggest taken abroad by a British prime minister and includes four ministers and nine members of parliament.

Cameron said he was proud that Indian companies like TATA group, the owner of Jaguar Land Rover, had such a strong foothold in the British economy, but said he expected a reciprocal arrangement.

“Britain is an open economy and we encourage that investment,” he said. “I think, in return, we should be having a conversation about opening up the Indian economy, making it easier to do business here, allowing insurance and banking companies to do more foreign direct investment.”

India was still saddled with outdated rules and regulations, Cameron said.

Investors have been clamoring for years for India to free up Asia’s third-largest economy to more foreign investment, but their entreaties have been resisted by Indian opposition groups worried about potential damage to their businesses.

The timing of Cameron’s trip is not ideal. India said on Friday it wanted to cancel a US$750 million deal for a dozen helicopters made by AgustaWestland, the Anglo-Italian subsidiary of Italy’s Finmeccanica, over bribery claims.

That will not make Cameron’s job of persuading India to buy more civil and military hardware easier, and Indian officials have told the local press they intend to press Cameron for “a fully-fledged report” on what Britain knows about the scandal.

Britain has said it wants to wait until the end of the Italian investigation before commenting in full, but has given India an interim report on the subject.

At a time when Britain’s government is struggling to get its economy growing, officials see India, projected to become the world’s third-largest economy by 2050, as a key strategic partner in what Cameron has called a “global race.”

“India is going to be one of the leading nations in this century and we want to be your partner,” Cameron told Indian workers at Hindustan Unilever.

During his visit, Cameron is expected to tell the Indian government that the Eurofighter jet, which is partly built in Britain, remains an attractive option if New Delhi decides to review a multi-billion dollar deal to buy 126 French-made Rafale fighters.

A British government source said on Friday that London had noted that Hollande had not finalized the Rafale fighter jet deal during his trip and that London would be asking how the talks with the French were going.