India-UK FTA deeper than Brexit deals or Trump trade pacts, says London’s Deputy Mayor Dawber

London’s Deputy Mayor Dawber

The Prime Minister of the United Kingdom, Keir Starmer, made his first official visit to India from 8 to 9 October, accompanied by the largest-ever delegation of over 100 CEOs, entrepreneurs, university chancellors, and cultural leaders.

It also came soon after India and UK signed the Comprehensive Economic and Trade Agreement in July. And, to speak about the significant relationship between these two major economies, Moneycontrol’s Shweta Punj caught up with Howard Dawber, Deputy Mayor of London for Business and Growth.

In a free-wheeling conversation, Dawber termed the FTA as the “deepest deal” India or the UK has ever signed. He also spoke about rising anti-immigration sentiment, work visas, and ease of doing business.

Here are the edited excerpts from the interview:

Shweta Punj: What's been the highlight of your trip so far? I believe you got in on Monday (October 6) and you're here until Friday or Saturday. So, any specific thing that you really want to do in Mumbai or in Bangalore and what's been the highlight of your visit so far?

Howard Dawber: I was very honoured to be one of the opening speakers at the Global Fintech Fest in Mumbai, warming up for Prime Minister Starmer and Prime Minister Modi, who'd been speaking there late this week and I've met some really amazing businesses, both in Mumbai and here in Bangalore, who are thinking about moving to London or expanding existing offices in London. So, the FTA has created a really exciting environment for collaboration between the two countries but also between some of India's most exciting cities and London.

Shweta Punj: This agreement was in the works for several years and evidently there's a lot of excitement on both sides. You mentioned that you met companies who've expressed their interest in moving to London. Would you be able to share some names with us?

Howard Dawber: Well, I'll talk about someone who's already got a very significant operation in London, who I met this morning, which is Wipro, a huge business from Bangalore that is working with the public sector and lots of big private sector clients in London. They have 17,000 staff based in Great Britain and Ireland already and there is further scope for development there. But some of the smaller companies that I spoke to last night here in Bengaluru and in Mumbai, it'd be unfair to share their details until we've got some announcements to make, but we're hoping to have some announcements very soon. We've got some really good potential there for collaboration.

I know this is very much a two-way street, the FTA that's been signed, and I can't stress this enough, there are lots of FTAs that get signed around the world and Donald Trump's been through a whole load of signing deals with people. The UK went through a whole load of signing deals with people post-Brexit. This is not one of those. This is not a superficial deal. This is a really deep platform for a future relationship. I think it's probably the deepest deal that India has ever signed. It's certainly the deepest deal the UK has signed. This is a different order of magnitude of opportunity here and a real partnership between two of the world's greatest economies.

Shweta Punj:  It's very heartening to hear that from you that this is not a superficial deal. Also, it is interesting that smaller companies are expressing their interest in coming to London. Just to get a sense from you, Mr. Dawber, since you are specifically engaged in the business aspect of things, what are you specifically offering Indian businesses who might want to come and set shop or expand in London? Any specific initiatives?

Howard Dawber: Yes, so we have an agency called London and Partners, which I'm the chair of, and that does two jobs really. It supports businesses to set up in London and to grow, including obviously homegrown London businesses, but also businesses that come in from overseas. Actually, India is our number one source of foreign direct investment into London. It's the number one country of origin of our incoming businesses with 77 projects last year. And also, I think it's fair to say London is the number two destination at the moment. We'd like to get to number one, but we're the number two city destination in the world for all of Indian FDI, so outgoing FDI, with -- Dubai, I think, is number one at the moment, but we'd like to get up there to number one. A really good corridor of activity between London and India is in existence. And the service we provide is to help people set up their business, to recruit locally, to find local sources of funding and grants, accommodation, to make it as easy as possible,

And the great thing is that the economies of the UK and India are really compatible. We've got some amazing IP coming out of our universities. And India has some amazing platforms in terms of some of the big IT companies for taking that IP, taking those ideas and taking them nationally and internationally to clients.

And, we're also a really good place to raise money, so a lot of Indian businesses come to London looking for investment, to shopping for IP, or indeed looking to work with bigger businesses in the London ecosystem. And the areas which we've identified as fast-growing areas, which include AI, financial technology, quantum computing, health and life sciences, really line up very well with some of the big growth sectors of India, particularly places like here in Bengaluru, where we've met some amazing companies in specifically those sectors, as well as the creative industries.

We've got a massive and growing film industry in London. In fact, we've risen quietly to be number three as a film and TV production centre in the world now, the biggest centre outside of USA. So, the supply chain for that is really huge. Lots of Indian businesses are already working in that space. And I think the FTA takes an existing, very productive relationship where there's a lot of synergy and creates a platform for a deeper relationship between the two countries, which I think is going to be mutually beneficial. And we certainly expect to see up to £25 billion of extra trade here.

So, my message to companies in India is, how much of that £20 billion would you like? So come and see what's on offer in London, and indeed other parts of the UK, because I think there's ways in which we can make a lot of money for each other.

Shweta Punj: Okay, it's interesting that you make such a strong pitch for Indian companies to come and invest in London, at the same time Prime Minister Modi is making a very strong pitch for companies to come and set shop in India, and in fact, urging domestic companies to also Make in India. Specifically, what is it that London would be offering in terms of tax breaks, in terms of ease of doing business, ease of engagement? Is there any sector specific incentives that London would be offering?

Howard Dawber: Sure. We have an R&D tax credit, which is for research and development. So, anybody doing research and development in the UK, there's a very positive tax regime for that. We've got some film production credits as well on the creative side, and some other specific tax incentives for different businesses. But it's also about the UK's position as a global hub. London has an FTA with the EU, and obviously really good historical relationships with our European neighbours going back to before Brexit. So, we're actually a really good place to place your business if you're looking to do business with Europe.

We have an FTA with the USA, and we're the first to get one post-Trump. So, we've actually got the most generous tariff regime, if I can call it that, the least ungenerous tariff regime, with the USA. So that was a good bit of negotiation. We're also a really good springboard into the USA, and then, other places around the world as well. London's a really good platform for global expansion, and that's what we can offer. In financial technology, for example, we've got a very business-friendly and very pragmatic culture of regulation.

Our regulation isn't prescriptive, and it's not reactive. It's principles-based, and that works very well for innovative businesses who are doing something new in the financial services space. We've got a really young population in London, 68 percent of our population have a degree.

We've got one of the most talented working populations of the world, 104 universities, 27 of our universities running AI courses and generating AI graduates. And, compared to other places, you want to employ a PhD grad in London, we'd like them to earn a bit more, but they are half the price of what you pay for the same grad in Silicon Valley or New York. So, as people look to expand, more and more Indian businesses are saying, London is a really good option. It's an easy place to do business. It's very friendly to Indian business culture. And that's why, for example, just in the last year -- last year, we had eight businesses from Bengaluru come through and set up in London. This year, just in the first quarter, we've had six. So, it's a very vibrant cross-border economy that we've got going.

And, to go to Prime Minister Modi's point, this isn't about competition. This is about collaboration. And we're in a global environment where our friends in the USA have very strong views about bringing back business and throwing up barriers and a somewhat protectionist type of view of how businesses should work. And that may work for them in the short term, but in the long term, I think that raises some really difficult questions for the US economy.

And then you have China as a giant and obviously hugely important in some of the growth sectors we're talking about. And in that global environment, having friends who you can collaborate with, where you can share, for example, the size of our economy, the size of our market with the size of the Indian population, the Indian market, combining those things together, looking to both sides to bring money to the table and bring ideas to the table, I think together we're a much, much more powerful force than separately. And I think this is really exciting.

Shweta Punj: The sentiment is, of course, much appreciated, but we saw massive anti-immigration protests in London barely two weeks ago. So, what's the message that you'd like to give out to Indian companies who are looking to expand in London when it comes to law and order and safety? Because London's law and order situation has also been making headlines for all the wrong reasons.

Howard Dawber: Yes, so I'd say a couple of things there. One is, I don't believe everything on social media. Yes, we had a big demonstration in London. It wasn't as big as they claimed it was. We had about 150,000 people on the streets talking about a whole range of issues, actually. It wasn't just about immigration. There were lots of reasons why people went on that demonstration. But 150,000 people was really quite small compared to what we've been getting for pro-Palestinian demonstrations, for pro-European demonstrations, much more people than that recently.

Most of those people were from outside London, though. And if you ask the general population of London, who've just re-elected my boss, Sir Sadiq Khan, for the third time, with an increased majority. And he's obviously British of Pakistani background. We had an Indian prime minister not long ago. We've got a Pakistani background home secretary. We've got an Afro-Caribbean deputy prime minister. London is absolutely a welcoming place. We have nearly 700,000 British Londoners of Indian background.

And there's a huge, huge thriving population, which is very, very welcome in London and has been there for many generations. And you'll find with our 200,000 overseas students; London itself is an extremely welcoming place. We had a campaign post-Brexit to say, look, let's be clear, London is open. We're open to ideas, open to people, open to business. We're not closed off at all. We're very positive about people coming to the city.

We are working very hard on the law-and-order situation. There've been one or two high profile instances of people having watches stolen in the streets. We've actually just put a whole extra team of 90 police officers into the West End, specifically to counter some of those issues. I know we shouldn't be celebrating this because it should be normal, but over recent years, we had some issues with knife crime, particularly among young people. And this year, for the first time, we had literally no deaths from knife crime in London, not a single one for the whole summer, for the first time in 20 years. So statistically, you are safer in London walking the streets now than at any time in the last 40 years. We've made huge strides to combat particularly violent crimes. We're now working on things like shoplifting and watch thefts. There’s…

Shweta Punj: Phone snatching? Yes.

Howard Dawber: There's a YouTube video of us -- with catching one of the gangs that was stealing watches. And it's a great video. There are two undercover cops flashing their Rolexes around. They walk down the street and then they're surrounded by this small gang of the thieves. And the moment when the other cops turn up and surround the gang of thieves, and the thieves realize that they've been nicked -- in English jargon, they have been arrested, they're going to go to prison -- the moment when that happens is beautiful to watch. So intelligent-led policing is cracking down on the relatively small numbers of gangs who are perpetrating some of these thefts. And we are getting them nicely locked up where they should be and getting justice. So, I can say you're safe to walk the streets of London.

Shweta Punj: I also want to talk to you about the greater collaboration between Bengaluru and London, because you did mention that you will be going to Bengaluru and getting startups to move to London has been on top of your agenda. Just want to get a sense of how are you hoping to accomplish that? Any specific initiatives planned for the tech sector?

Howard Dawber: One of the very exciting things about the free trade agreement is that services are in there. And this provides a platform for new initiatives between the two countries, which we're very much looking to work on to provide those sorts of cross-border collaborations and opportunities for business to move in both directions. Obviously, India's got a huge market, massive market for services, particularly on the tech side and for IP. And we're generating some extraordinary ideas out of London's university sector that can have applications. For example, AI. We have more investment in AI in just London than the whole of France and Germany put together.

London's AI sector now has 1,500 businesses looking to collaborate with businesses who are at the same stage of development from India. And Bengaluru's got some amazing startups that we want to bring together who can offer their services to London and beyond London to a wider global customer base. So, like I said, six just in the first quarter of this year and more coming. And eight last year from Bengaluru, eight businesses, scale-ups coming to London as part of their plans to go global. And that's really our offer is we should be your first step outside India. When you've got your product, your customers in India sorted, you go, right, it's time to go global.

It's much, much easier to come to London and then from London to go to, for example, New York and Silicon Valley than it is to go directly to New York and Silicon Valley. The routes in setting up a business, getting staff in, recruiting, getting accommodation, getting an office, it's all a lot easier in London for Indian businesses than it is in some of our competitor cities around the world. So, come to us first and we'll help you then.

The other thing I'd say is as soon as you land in London, as soon as you set up your business in London, you're treated like a London business. So, you've got the same legal rights, you've got the same IP rights. And under the FTA, you'll have even more opportunities for raising money, for engagement, for getting into government contracts than you would do in most countries around the world.

So, it's almost like we're bringing the two economies closer together to have, not quite as seamless, a single economy as the European Union was, but two economies that are working very, very closely together to get the best of both. So, our offer is come and have a look because we will be able to show you, I think, something which will work for your business.

Shweta Punj: But for professionals to move there, Mr. Dawber, they'll need work visas. And London has been very, very stringent on holding on to that. In the FTA as well, work visas has been your red line, like agriculture has been ours.

Howard Dawber: Yes. Now, what I would say is that in practice, we have worked with many businesses from India in terms of bringing senior staff over, bringing key staff over. And yes, it is a bit complicated, but we've been very successful in working with those companies to get those people to London. And with what's happening in the USA, which is, unfortunately, they're creating an environment which is very unstable for people who want to move to US and work.

Our system is firm, but it's fair and it's very predictable. So, we've had no problems over the years in particularly key staff where people wanted to bring key staff over. We've had no problem in making sure that happens. So, don't be put off, again, by the rhetoric. Obviously, we all want to see firm borders and control of immigration across the world. That's something common to every country, I think.

But in practice, when you have key business personnel, the route is there to get them in. And as long as they meet the criteria, which usually they do, then we can sort the visas out. And that's something that London and Partners can help people, point people in the right direction with as well. So, come and talk to us. londonandpartners.com is the website to go to. You can find me online as well. I'm easy to Google. Annoyingly, it's my face and my salary that comes up first, but that's unfortunately the perils of being in a very transparent public sector that everything's online. But you can get hold of me very easily and get hold of my team. We have permanent staff based in India. We have seven staff in India. Shows you how serious we are as a city. That's just London, not UK. Seven staff in India working to bring British businesses over to India and also to bring businesses from India over to UK. So, come and see us.

Shweta Punj: I also want to get a sense from you on the H1B visas. The fee hike to $100,000 could be seen as a deterrent for Indian professionals to move to the US. How are you viewing that situation when it comes to Indian professionals moving to the UK? Do you think this could work towards the advantage for London?

Howard Dawber: Yes, let me be clear. Our mayor, Sir Sadiq Khan, has had a few things to say about Donald Trump. Donald Trump has had a few things to say about our mayor too. It's (H-1B visa) has been one of the cornerstones of Silicon Valley, the ability to bring in the world's top talent under that highly skilled H1B visa. I think it's a huge mistake for the US economy. But yes, that gives us an opportunity. And in fact, this isn't all one direction too. Because some of the businesses I've met in Mumbai and Bengaluru have brought in talent from London. And so, there's a lot of people moving both ways.

I think it is an opportunity. And certainly, we'll be talking on behalf of London and on behalf of London businesses to our friends in national government. We are -- luckily, it's the same political party. So, they're literally friends of ours, national government in the UK. We'll be talking to them say, yes, please do not do anything to stop what is now a fantastic golden opportunity for us to be able to attract top talent from around the world that's going to find it difficult to go to the US. I mean, certainly, I was talking to MIT in April, over in Boston. And they were very worried about the fact that the government's policies we're going to have on their overseas student recruitment, and not just students, but faculty as well, concerned about what their rights would be in the USA.

And that area of uncertainty has been developed is -- it's not going to do them any good. And I don't -- I'm not going to gloat about -- the US economy is a crucial part of the world economy; we want them to do well as well. We want to collaborate with the US. But yes, it's a great opportunity for us to not put up extra restrictions, and to throw the doors open and say, if you're bringing money, talent, business to the UK, then you'll be extremely welcome.

Shweta Punj: There are concerns about UK's visa policies and the new import taxes like the UK's carbon tax, which could hurt India's exports to the UK. Anything that you'd like to say on that, Mr. Dawber, because Indian exporters are very worried that this could significantly impact what they send into the United Kingdom.

Howard Dawber: Well, I think the FTA answers some of that with reductions of tariffs and creates a structure through which the things like the carbon taxes can be discussed. Now, we've got very strong policies on reducing carbon impact of what we do in the economy in the UK, we've got very, very strict targets moving towards Net Zero, some by 2030, some by 2050. And what that's done, actually, is created a really strong industry.

So, 25% of our FDI last year was in the sustainable sector, we've got some really strong businesses in that sector who are now not just working in the UK, but around the world, helping people with that transition and also making money out of it. It's a profitable business in that transition. We don't want to reign back on our commitments to the environment.

And at the same time, we want to make sure that we're competitive and that the spirit of the FTA, which is to open up the UK to some key Indian exports is not only delivered in on paper, but it's delivered in reality. And we do see that big growth in trade from the UK to India. I would say, let's see how what works, what happens in practice. But I don't think that we'll end up in a position where the carbon tax makes Indian exports disproportionately unfeasible, I think it's going to -- with the lower tariffs, and the ease of doing business through the FTA, I think that's going to make it profitable for new business to export to the UK.

Shweta Punj: It was announced that nine UK universities will be opening up campuses in India. What more can we expect in terms of investments and businesses from the UK coming into India, Mr. Dawber?

Howard Dawber: Well, yes, and I think that's very significant as well. Imperial College, which is now ranked the second-best university in the world in the global rankings just behind MIT, UCL in London, which is in the top 10, King's, which is in the top 50, and all the other universities we have in London are looking to international students, international collaboration as a key part of their future. I think that university collaboration is going to be very strong going forward. We also want to see Indian universities setting up offices in London to collaborate with our universities both in terms of teaching, in terms of knowledge sharing, in terms of research. This will be, I think, a two-way flow too.

I think the next thing you'll see is a real growth in some of the deep tech and the cutting-edge tech development, partly through the university collaborations. Things like quantum technology, which is something where UK, particularly London, and India are global leaders in this space. I think there's an opportunity for us together to be absolutely the forefront of quantum, the development of the deep technology itself, but then also the applications. And there's some very exciting applications already out there, particularly in healthcare. We're using quantum technology on the London underground to pinpoint the location of assets because of the particular way that entangled particles work to allow you to identify specifically where things are.

I think there's a huge opportunity for growth there. I would see three areas -- sustainability actually, because there's a lot of really exciting work being done on sustainable tech in India. So, the sustainable sector, the AI tech and deep tech sector, and then health and life sciences are the three areas where I'd expect to see some pretty rapid development. And actually, I'm going to say the fourth one, I think there's a lot more we could do in the creative sector between film and TV production, something again, that two countries are very, very strong in, with a huge and growing global market for streaming services, for film and TV, really high-quality productions. And already some of the films made in UK, the VFX is done in India, a lot of the technical work done in India to support that. And I think those sectors are going to see a real jump in activity off the back of the FTA.

Shweta Punj: Any indication of the Indian universities that could be opening up campuses in the UK? Do we have any names on that?

Howard Dawber: I would suspect the technology side, particularly is where the first big steps can be made. But watch this space because I don't have anything to announce to you today, but I know there's some really strong conversations going on.

Shweta Punj: You mentioned that AI, deep tech, healthcare, these are going to be the focus areas of the collaboration between the two countries. Do we see UK-based companies coming into India with that kind of an offering? Or are you seeing Indian companies moving to London in these areas?

Howard Dawber: I honestly think it's both. I mean, one of the interesting conversations I've had with people like some of the really big Indian businesses like Wipro, like Tata, has been about finding the next generation of ideas, finding the next generation of inventions in the, tech space, which are coming, particularly spinning out of universities, but also spinning out of other businesses. And where they find somebody that's doing something that literally hasn't ever been done before, and then buying that IP. So, incorporating that IP into their business, either to start with as a JV, or actually acquiring some of the companies that are developing that IP. And that's happening both ways.

There's obviously, as you will know, there's a great startup and scale-up culture in India. This -- I'm in Bengaluru today, this is the Silicon Valley of India. A lot of the same buzz, a lot of the same excitement about new businesses coming out with -- around a core idea. And that's very exciting to British businesses to say, oh, that's something we could incorporate into our platform, and vice versa. So, I think there's a real opening up of collaboration and market of ideas. We're -- I don't have any stats on this, but London is buzzing with ideas right now. We have absolutely no problem with the IP that's coming out of London, out of our accelerators, our incubators, our businesses, our universities.

And India is the same. We are in a way, a lot of ways with the two countries, are the ideas fountain of the world right now. And other people might be quite good at turning that into global businesses, but we're where the ideas are. So, working together, I think we can really harness that. And, I have no doubt that the next big leaps in quantum, for example, are likely to be in UK or India, not in other countries. We're at the forefront of that. It's genuinely going to be both ways. It'll be British companies coming to India, setting up in India and growing and, and Indian companies coming the other way. And then finding those collaborations with the startups and scale-ups that add something new to the offer. I think it's very exciting.

Shweta Punj: I also want to get your thoughts in on what according to you is the new global order looking like, because -- where do you see India and UK in their relationship going from here? We heard the Prime Minister this morning talk about how India and UK are natural partners, and it's a natural partnership between the two countries. So where does the relationship go from here on?

Howard Dawber: Okay, well, I don't have responsibility for foreign policy. So forgive me if I'm slightly careful what I say here. But historically, UK has had three key relationships globally, one with the USA, as allies, cornerstones of the United Nations, cornerstones of NATO, and then one with the European Union, obviously, originally, as very friendly outsiders, then as members, and now as friendly outsiders, again. Myself and the mayor, and in fact, the population of London voted to stay in the European Union. So we're pro-European, as a city, and the rest of the UK voted to -- majority to leave, we didn't like that decision. But it's a democratic vote. We now want to have a closer relationship with the EU, but we're working on that.

And the other key relationship is with the countries of the Commonwealth. Now, historically, that Commonwealth relationship has not been very strong in terms of the economics, despite the cultural links, the historic links, the legal links, the very close friendship between countries like India and the UK, we really haven't exploited what is, a very fertile soil for economic collaboration in the way that we could have done.

That's changing. So that is what the FTA is about. We are obviously -- you will have seen, we've done recently deals with the US and Australia on defense, we working very closely with Canada, Mark Carney. The new Prime Minister of Canada was until very recently, the governor of our Bank of England working directly in the UK economy, loads of very good friends in London. The reshaping of the global world order that that was happening already with Brexit and other things and with the end of the Cold War has sort of been accelerated with what President Trump's doing, but not only that, lots of other currents happening in the world. It's a time for people who think the same way, you believe the same things, you have a compatible business culture, and whether there's an opportunity for mutual benefit, time for people to come together. And that's what I think we're doing now.

We're in the market for new friends, new relationships, and to strengthen existing relationships. India is emerging as one of the great, powerful global trading nations of the world. It's going to be one of the world's biggest economy -- it is one of the world's biggest economies. It's going to continue to grow and to be one of the world's biggest economies.

And it's very important, clearly, for India to have good partners around the world, and for us in the UK to have really big, strong partners like India. So this FTA, I think is -- it's about time you said. As you said, it's been in the works for some time, but to actually get it over the line, I think is -- provides a really strong platform for future collaboration. And it also underlines our strategic relationship on the world stage.

We need to stick together in difficult times. There are wars raging in, in several parts of the world. We need to work together to make sure that we are strong allies, both in terms of economics and diplomatic terms as well. And, in military terms, that will also form part of the FTA. Now there's some military engagement here that will be really effective for both countries too.

I think it's very, very positive and, and a bit overdue, but we're there now. And it's good in a world that becomes more complicated and more unpredictable, that you have some really strong, predictable relationships that you can rely on. And that is what the FTA brings.