David Cameron pushes for Mumbai-Bangalore corridor during India visit

STORY: British Prime Minister David Cameron on Monday (February 18) said he wanted his country’s companies to help India develop new cities and districts along a 1,000 km (600 mile) corridor between Mumbai and Bangalore, generating investment projects worth up to $25 billion.

Kicking off a three-day visit to India with the largest trade delegation taken abroad by a British prime minister, Cameron said he wanted British firms to work with the Indian and British governments to develop nine districts to link Mumbai, India’s financial capital, with Bangalore, its tech hub.

“On all the aspects of your future development here in India, of the infrastructure that you are going to build, of some of the exciting proposals we are looking at together, like a corridor between Mumbai and Bangalore with new towns along the way and great planning of economic growth. We want to explore that with you,” said Cameron.

The first phase of the project would involve investment in physical infrastructure, such as transport networks, telecommunications and power generation. Later construction would concentrate on social infrastructure such as welfare and education.

India has pushed the building of giant development “corridors” to accelerate the growth of its manufacturing base, which has lagged behind its IT and services industry.

The government has also planned to build 24 new industrial cities along a 1,483 km (920 mile) railway line between New Delhi and Mumbai with Japanese funding, but the project has progressed slowly.

British and Indian officials have been working with business representatives from the two countries on the Mumbai-Bangalore project since last year and had produced an initial assessment of its scale and potential.

The British government would be willing to co-fund a feasibility study, on a match funding basis, with the Indian government costing up to 1 million pounds.

India should open up its markets to allow foreign direct investment in hitherto closed sectors, he added.

His office said forecasts showed 5.8 percent of India’s population growth would be in the corridor, contributing 11.8 percent of the country’s gross domestic product growth by 2020.

Cameron also said Britain planned to change the visa system to allow Indian businessmen to get a visa in one day.

“We are going to introduce for business a same-day visa service, because we want you to come to our country quickly, to invest in our country and to support our country,” Cameron added.

Cameron’s visit to India, a country that won independence from Britain in 1947 and whose colonial history remains a sensitive subject for many Indians, will last from February 18 to February 20 and take in New Delhi and Mumbai.

Cameron said the two countries enjoy a “special relationship”, a term usually reserved for Britain’s ties with the United States, but it is a relationship undergoing profound change.

For now, Britain’s economy is the sixth largest in the world and India’s the 10th. But India is forecast to overtake its old colonial master in the decades ahead.

TATA group, an Indian company that owns car maker Jaguar Land Rover, is now Britain’s biggest employer in the manufacturing sector and, in a nod to how the relationship is evolving, London will stop giving India foreign aid after 2015.

“I am positively proud of the fact that Indian investment in now responsible for Jaguar Land Rover, a massive international success story, has revitalised British steel production, is even now refining our crude oil and also of course owning Tetley tea and it does not get more British than that. We positively welcome that sort of investment,” Cameron said.

Cameron is expected to lobby India to open up its economy to foreign investment to allow retailers, such as Britain’s Tesco, to open outlets there amid frustration that many of the sectors in which British business excels remain partly or fully closed to foreign investors.

India is forecast to spend $1 trillion in the next five years on infrastructure and Britain is hoping its firms may win some of those contracts.

Some British companies have run into problems in the past. Mobile phone operator Vodafone has repeatedly clashed with the Indian authorities over taxes and oil company Royal Dutch/Shell has asked the British government to raise a tax dispute it has with India during Cameron’s visit.

Cameron’s aim is to double trade between the two nations from 11.5 billion pounds in 2010, when he last visited, to 23 billion pounds in 2015. Officials say that goal remains on track.

He is expected to meet Manmohan Singh, his Indian counterpart, as well as President Pranab Mukherjee, and to announce a clutch of deals, including cooperation agreements to help India develop its city metro systems.