By Amit Roy
Theresa May’s government will find that negotiations aimed at signing a Free Trade Agreement with India will prove “difficult and prolonged” if it continues to stick to its rigid line on visas, especially on intra-company transfers.
This was stated by Anuj Chande, a corporate finance partner and head of the South Asia Group for Grant Thornton UK, in an exclusive interview with Eastern Eye.
Asked whether intra-company visas were still a problem, Chande confirmed: “It is still a problem and I think the UK needs to pay attention to that aspect because I have a feeling that unless the UK changes it stance on the whole visa issue – whether it is for tourists as well as for workers – the negotiation in terms of the India-UK Free Trade Agreement will be prolonged and difficult.”
Chande was speaking to Eastern Eye after he had given the “key highlights” from the India meets Britain Tracker: The latest trends on Indian Investment in the UK (2018) to the 5th
“India meets Britain dinner” held last week at the “Indian-owned” St James’ Court Taj hotel in London.
The report has been compiled jointly by Grant Thornton, “one of the world’s largest professional services network of independent accounting and consulting member firms”, and the Confederation of Indian Industry (CII).
Chande told guests at the dinner that the report “demonstrates the huge contribution made by Indian companies to the vibrancy to the UK economy”.
The report sums up: “This year, our research identified approximately 800 companies operating in the UK, with combined revenues of £46.4 billion (£47.5 billion in 2017).
“Together, they paid £360 million in corporation tax (£276.7 million in 2017) and employed 104,932 people (105,268 in 2017). This shows the continued importance of the contribution that Indian companies make to the UK economy.”
The report was launched by, among others, the Indian high commissioner Yash Sinha – he participated in the recent bilateral meetings between the Indian and British prime ministers – who said: “The findings of the report demonstrate how well Indian companies are doing in the UK. Equally, UK companies are doing exceedingly well in India. The recent visit of Indian prime minister, Shri Narendra Modi gave a new focus to the UK India relationship.”
The high commissioner was joined by Mark Byers, a member of the senior leadership team and head of international at Grant Thornton.
Also present was Shuchita Sonalika, director and head of the CII in the UK, who is moving to Washington to take charge of the CII in the US.
The home office dug in its heels and refused to give Sonalika a visa for a year – even though part of her mission was to bring in much needed Indian investment into the UK. The result was that her personal belongings, including her clothes, had to gather mould in a container in a dock, while Sonalika flew in periodically from Delhi.
“At a time where the UK is forging a future outside of the EU it will be looking to strengthen its ties with long-standing partners like India,” said Sonalika. “The Indian economy is forecast to grow substantially and what the UK must focus on is both creating new and maintaining existing investment opportunities as it competes for India’s investment on a global platform.”
Her replacement as the CII’s representative in the UK, Lakshmi Kaul, will not have any visa problems because she is a UK resident.
Chande told the dinner: “As suggested in last year’s report the Brexit uncertainties have had a limited impact on the Indian appetite on investment in the UK. There has really been no mass exodus that was anticipated or feared at the time of the Brexit.
“On the contrary if you look at the M&A activity four of the 10 largest European acquisitions by Indian companies were in the UK.”
He was not providing an endorsement for Brexit, however, Chande made clear when he spoke to Eastern Eye after the dinner.
“It is still too early to draw proper full conclusions (about the long term consequences of Brexit) but what’s interesting is that business is almost continuing as normal in the sense that Indian companies have not suddenly done a mass exodus out of the UK. It is more of a wait and see campaign.”
That said, the companies had detected “a little degree of confidence in the UK remaining an important part of the European environment”.
When it was suggested that the majority of the 800 Indian companies had set up wholly owned subsidiaries in the UK with the aim of expanding into the much larger market that the European Union offered, Chande responded: “For some companies, yes, they came into the UK (seeing it) as a launch pad into Europe but equally there are some companies – like Tech Mahindra when they bought the Target Group – that came in to buy the technology and design experience.
“They did not necessarily come in for launching into Europe.”
The attitude of the home office is that instead of bringing in staff from India, the Indian companies could just as easily recruit equally competent staff in the UK.
Chande’s comment on this was: “That is already happening. If you talk to companies like Tech Mahindra they will say that particularly with the advantages of (UK) technology and block chain and everything else there is more opportunity to actually recruit locally and not necessarily have to get people from India to come here. There is an increasing need for local recruitment. So you are going to see both.”
He emphasised that to the nearly 105,000 people employed by the UK subsidiaries had to be added “20,000 to 25,000” staff employed by the British branches of companies with head offices based in India.
This meant India had created about 130,000 jobs in the UK. This did not take into account the number created by British Indian companies.
On the advantages and disadvantages of Britain remaining inside the EU’s customs union, Chande agreed: “Most people would like a customs friendly situation – including India.”
Bur he also pointed out that if Britain was inside the customs union – as many MPS and peers of both the main parties now want – it might not have the freedom necessary to sign a Free Trade Agreement with India.
Chande said: “Obviously one needs to understand what impact that would have on trying to negotiate a separate trade agreement with India: whether that would be possible I don’t know. If you already have a customs union whether you then have to join the EU in the agreement that the EU has with India I don’t know. I don’t think anybody knows.”
At the dinner, four companies were praised for appearing in the Tracker for the fifth consecutive year – Accord Healthcare Ltd, Glenmark Pharmaceuticals Europe Ltd, Milpharm Ltd, and Secure Meters (UK) Ltd.
Grant Thornton 2018 awards were also given for performance to: Wipro, Union Bank of India, Accord Healthcare and Secure Meters.