INDIAN business leaders have spoken out against Britain leaving the EU (“Brexit”), in a blow to those in the leave campaign – including Ukip leader, Nigel Farage – who have repeatedly promoted trade with the Commonwealth as an alternative.
The Federation of Indian Chambers of Commerce and Industry (FICCI), the overall industry body in the emerging economic power, warned that Brexit could harm investment by Indian businesses in the UK. Growing UK-India trade has been a priority for governments in both countries in recent years.
FICCI statements on the internal affairs of other nations are extremely rare, and a measure of the concern among Indian business people.
India is now the third-largest source of foreign direct investment into the UK, after France and the US, creating thousands of jobs and safeguarding many more, according to a report by the British Department of Trade and Industry last year.
However, Brexit could endanger the flow of investment and personnel by diminishing Britain’s role in providing access to Europe, Dr A Didar Singh, the secretary general of FICCI, said in a statement.
“Britain is considered an entry point and a gateway for the European Union by many Indian companies, a view echoed by the prime minister, Narendra Modi, in his visit to UK in November last year,” said Dr Singh.
Farage has repeatedly held up trade with the Commonwealth as an alternative to the UK’s dependence on commerce with the EU. He said in a 2013 Ukip conference speech that Britain should not be “hemmed in by the European Union – but open to the Commonwealth” and has repeated this view in TV debates and interviews since then.
Dr Singh said: “While deciding on membership of the EU is a sovereign matter for Britain and its people, Indian industry is of the view that foreign businesses cannot remain isolated from such decisions.
“The UK is a valued economic partner for India and we firmly believe that leaving the EU, would create considerable uncertainty for Indian businesses engaged with the UK and would possibly have an adverse impact on investment and movement of professionals to the UK.”
There are more than 800 Indian-owned businesses in the UK, experts estimate, with more than 110,000 employees. The best known is Tata Motors, which owns the car manufacturer Jaguar Land Rover. Others include major information technology, pharmaceutical, creative and financial services firms.
“Britain has always been India’s port of entry into Europe. Most Indian companies have their European offices in London as it offers the comfort of doing business in the UK while still being part of Europe,” said Mohan Guruswamy, a Delhi-based economic analyst and writer.
However, even if Brexit forced some Indian businesses to “go directly” to European markets, some advantages of the UK would remain.
“There’s the language issue, and who wants to live in Hamburg if you can live in London?” said Mr Guruswamy.
London is also a favoured destination of very wealthy Indians, with thousands maintaining property or sending children to school in the capital.