Namrata Kath Hazarika | 08 Jan, 2013
In an exclusive interview with SME Times, Mark Runacres, India Adviser, Confederation of British Industry (CBI) said Indian small and medium enterprises (SMEs) having innovative solutions especially in cybersecurity, creative industries and the lifesciences can avail several tax benefits if they launch their intellectual property rich products in the UK.
Excerpts of the interview...
The British government has now decided to focus on increasing trade with India rather than focusing much on providing financial aid. Both the government have also decided to put efforts focusing instead on skill-sharing in areas such as trade, investment and health. What is your take on this?
Mark Runacres: Trade and aid have never been exclusive alternatives. The British Government's decision on financial aid will not make any difference to trade and inestment promotion. The latter will remain a high priority for the British (and Indian) Governments given the need for significant increases and indeed the Prime MInsterial commiitment to double trade. Lord Green, British MInister for Trade is here this month to look precisely at ways to pursue that target. Health is onyl one area where the two Governments will be focussing - education and skills is another. Indeed, the Minister for skills will be in India immediately after Lord Green to look at collaboration in that area too.
Do you think India needs to develop strategic and implementational framework for skill development? What role does Confederation of British Industry play for skill building in India?
Mark Runacres: India now has a strong strategic and policy framework for skills-development. Implementation remains a challenge, given the experimental nature and scale of what is being attempted. This is an area where the UK has considerable strengths, through companies like A4e and City & Guilds - the CBI's role is really to help members like these to maximise their contribution here. The UK's success in this field comes from focus on quality and in particular matching skills to employment.
Will the ongoing eurozone crisis likely to pose challenges for the UK for many years to come?
Mark Runacres: The Eurozone crisis will be a global challenge for 2013 as it was for 2012. The UK clearly has a lot at stake in seeing the resolution of that crisis given the depth of the UK's implication with the Eurozone economies. How long these challenges will last is anybody's guess but the manner of their resolution, and in particular the European banking system which emerges, will be of great significance for the UK.
What kind of scope do you see for Indian SMEs in Britain?
Mark Runacres: Working internationally always has its challenges for smaller companies, given the investments needed. But the UK is a very easy place to do business and many Indian SMEs will feel at home for cultural and language reasons. I meet plenty of SMEs who have made real successes in the UK. Indian innovators can avail of several tax benefits as a result of launching an Intellectual Property (IP) rich product. A lot of support is also given by the UK government for businesses which are driven by R&D. There is a high premium given to innovation in the UK - to give a few examples of growth areas: cutting edge technologies especially in cybersecurity, creative industries and the lifesciences.
Could you highlight on the investment opportunities that India can have now while partnering with Britain? Is there any possibility of private investment in India to boost infrastructural set up in near future?
Mark Runacres: I doubt infrastructure is an area for SMEs. There is of course a great British success story in terms of Indian infrastructure investment - 3i who have been leaders in this field. But infrastructure clearly requires a long-term view and given the challenges currently faced by the British economy I think investment here is not likely to be an immediate focus area.
What kind of opportunities do you observe in manufacturing sector, especially in engineering, to strengthen the economic ties between the two nations?
Mark Runacres: Indian engineering is held in high regard in the UK, and I still find plenty of CBI members who maintain their interest in India. Tata's success at JLR has further reinforced this perception in the UK. The UK's key strengths lie at the top end of the spectrum, where high-end design and delivery demonstrate the UK's continuing world class. Where Indian companies can complement this, for instance by offering back-office design resource or by delivering lower end capability, there will be growing opportunities.
What are the current barriers in the India-UK trade?
Mark Runacres: There remain significant barriers, including Indian nervousness about opening up to foreign players in areas of Brtitish strength such as professional services. Some non-tariff barriers present real challenges: visas; complex government permission processes; centre-state regulation differentials; taxation issues; and IP protection. The cultural barriers are also more challenging than many small companies imagine, in particular the Indian culture of delaying payments which can make it impossible for smaller companies to sustain relationships here.
Will the EU-India FTA give a considerable benefit to the European Union and especially UK as it is a part of it? And, which are the sectors that would be most benefited from it? And, where are things heading under it?
Mark Runacres: A good EU-India FTA would give both India and the EU (including the UK) a great boost. A very broad range of sectors could be impacted but that very much depends what happens in the coming weeks. Given the Indian electoral calendar, any deal really needs to be struck early in 2013. We are all keeping our fingers crossed!
(Namrata Kath Hazarika can be contacted at firstname.lastname@example.org)