UKIBC CEO Dickie McCallum hopeful on early conclusion of India-UK FTA

The Chief Executive Officer (CEO) of the UK India Business Council, Dickie McCallum, is hopeful on the early conclusion of the India-UK free trade agreement (FTA). Earlier this week, Indian PM Modi and UK PM Sir Keir Starmer met on the sidelines of G20 Brazil summit and agreed on resumption of India-UK Free Trade Agreement Negotiations. Speaking to WION's Sidhant Sibal, he said, "our members would like to see some limited tariff reductions in a limited range of areas, automotive and spirits and so on."

The general elections in both India and the UK have influenced the timeline of the FTA. The talks were paused during these periods but are set to resume with a priority status from both sides. Dickie McCallum pointed to the British role in the Indian economy. He pointed that, "UK is a top five investor and has been over the last 20 years in India, in terms of FDI. India is now the second-largest investor in the UK."

The UKIBC CEO also put emphasis on defence business ties. He pointed, "we understand India's ambition, which is to mature its defense market, to ensure a supply of critical capability and technology and to grow exports from that sector as well"

WION: Where do you see India, UK relations?

Dickie McCallum: So the UK and India enjoy a very healthy trade and investment relationship at the moment. The UK is a top five investor and has been over the last 20 years in India, in terms of FDI. India is now the second-largest investor in the UK. There are about 950 Indian companies in the UK with turnover of about 50 billion pounds. And equally in India, there's about 670 UK companies here with turnovers of about 50 billion pounds, and they employ about half a million people, five lakh people in this country right now.

WION: What are the strategic areas of collaboration between India and the UK? 

Dickie McCallum: While the UK considers India to be a strategic partner, you have to focus on certain areas if you're going to really succeed, right. So I think the areas where the UK and India are collaborating right now, where there's huge potential, include things like finance and fintech. So the City of London is a considerable source of finance for India, and potentially green finance, lots of FinTech companies in the UK who want to work in India, climate and energy. So this is very much 2 way. Defense is another area of huge collaboration. I mean, India wants to indigenize defense manufacturing. The UK has considerable defense capability and technology that it wants to bring here, you know, it wants to co create and co develop in India. And more generally, I think technology. In July, when our Foreign Secretary visited India, he signed something called the technology security initiative, and that's an agreement with India to work on the technologies of the future, things like quantum and AI and advanced materials. So that's a very exciting new development for the relationship.

WION: What opportunities and challenges do both sides face with the free trade agreement, especially considering the ongoing talks have lasted for months?

Dickie McCallum: What I would say here is that when the fifth and the sixth-largest economies in the world view a comprehensive trade agreement, it's really important they take the time to get that right. And so, you know, while I'm not at the negotiating table, we do talk to officials on both sides, and I'm really reassured by conversations I've had with ministers on both sides about their commitment to making this Free Trade Agreement a reality. Our members would like to see some limited tariff reductions in a limited range of areas, automotive and spirits and so on. But I think it's important to consider that this FTA is, is the start of something, it's not the conclusion of something. So I'm very hopeful that we can get it done and then start to build momentum from there.

WION: Do you have any hopes of its conclusion?

Dickie McCallum: We did 13 rounds, and the 14th round was paused because we had elections in the UK. So you can understand why there was a break in the negotiation, because we had a general election in the UK. There was also an election in India, and we have a new government in the UK, but the new government in the UK has been very clear that it wants to pursue the FTA. So I think now that both governments are securely in place, we will see a progression in these negotiations, and I'm hopeful that they'll conclude successfully soon.

WION: How does the UK IBC see the investment climate in India? 

Dickie McCallum: I've been living in this country for the last nearly 20 years, and it's in terms of business climate. It's unrecognizable from when it was when I came here. The government here has done an incredible job in terms of easily doing business, in terms of reform, and I think it's the most exciting economic story in the world. Lots of UK companies are now looking to base their research and engineering and development centers in India, because it's such an exciting place to be, because of the talent here, because of India's ability to scale.

WION: Can you tell us more about the tech event you're hosting?

Dickie McCallum: Picking up on that theme, I mentioned the technology security initiative. We want to showcase what Indian and British companies are doing together today in terms of technology collaboration. We also want to talk about the future. So it's a technology futures conference, because there's so much more that these 2 countries, companies, inside the countries and the universities, can be doing together. You know, powering Vikshit Bharat, the development of India, to 2047, the UK can play a really great role in that. I think there's a lot of technology, a lot of capability research in the UK. So yeah, we're exploring that. We've got a number of sort of side seminars going on around that, in terms of FinTech and energy transition and technology collaboration. So it's very exciting.

WION: What role can the UK play in developing India's workforce, and supporting "Make in India"?

Dickie McCallum: Well, there's two questions there, one around skills and capacity building, and one around making India and sort of operating landscape. So in terms of skills, UK universities are very interested in India. You recently had the announcement of Southampton setting up in India. I think that universities from the UK, you're going to see much more of this kind of thing. They're excited about partnering with Indian universities and potentially for campuses, and they will bring new things to India in terms of skills and potentially employability training. So I'm very hopeful that the UK can play a role in that capacity building. Now, in terms of "make in India" look, I do a lot of work in defense right now. British companies, and we understand India's ambition, which is to mature its defense market, to ensure a supply of critical capability and technology and to grow exports from that sector as well. We understand that, yeah, sure, there are some areas where we think it could be refined so that technology can flow into India a bit quicker. I think you can scale this, you can grade this perhaps a little bit more slowly, to get what you want from foreign companies quicker. But I think generally speaking, you know, UK companies, we're encouraging them to think of India as a strategic partner, part of their supply chain, talent chain, technology chain.

WION: Where does the British defense industry stand when it comes to India as a market? 

Dickie McCallum: You're absolutely right. The UK hasn't gone from very significant market share, it's come down to a very small market share. We're behind the curve on some of this in terms of our peer competitors, but I see the strategy that the UK Government has and the British business has now as changing that. There are, I can't talk about them here, for obvious reasons, but like under the radar, there are some really exciting new prospects where UK and Indian companies and the forces are working together on certain areas of capability development. So I think that's going to change. I think we have the right strategy for it, and eventually that's going to change. You're going to see the results.

WION: My final question is about sustainable development. India is a growing economy, but with that growth comes increased pollution. Having lived here for 20 years, you must have noticed the rising pollution levels in Delhi, the National Capital. So, in terms of sustainable development, how does the UK position itself as an important partner for India?

Dickie McCallum: We've all got our sustainability challenges. I think the UK can learn from India in this respect, in some areas. And equally, the UK has technology and finance that can help India's development towards its SDG and sustainability objectives. The UK is a world leader in things like clean technology and wind and so on. So I think there are areas where we can definitely work together to meet our objectives.