Below is the text of Mr Major’s speech to the Confederation of Indian Industry, held in Calcutta on Thursday 9th January 1997.
Mr President, Mr Past President, Mr Chief Minister, Ladies and Gentlemen. Standing here this afternoon, looking around, I am reminded of an afternoon a few months ago at Downing Street in late July. It was a lovely day. The sun was shining. India were doing embarrassingly well in the Third Test at Trent Bridge [indistinct] Ganguly, who is I believe a Calcutta boy, and Sachin Tendulkar were already well past their centuries. For one of them to have scored 100 was acceptable, for both of them I thought was putting the status of guest at risk. But it was that afternoon that the Confederation of Indian Industry, led by their President, Mr Sheka Dafa [phon], had come to see me to discuss the progress of the Indo-
We were soon immersed in the Cabinet Room at Downing Street, immersed in the practical details of how to boost trade further. And while we were conducting this little exercise, Tendulkar and Ganguly continued to pile on the runs at Trent Bridge. And then Mr Dafa slipped in the question, unexpectedly with all the timing of a first-
And I was going to say I felt that for three reasons, but actually I can make it four because, as you indicated a moment or so ago, the fourth reason is that it enabled me to visit just a few moments ago your magnificent ground at Eastern Gardens, just a stone's throw away from where we sit, where Lancashire County Cricket Club are today playing the Eastern Region. And Eastern Gardens must, by anyone's book, be one of the world's great cricket grounds, so it was a very great delight to be there, as indeed it is to be here.
And I must say, looking around this great hall, you make quite an impressive sight. I am used to audiences of 5-
Let me turn to the three substantive non-
The first, I confess it, is entirely personal. I have always been fascinated by India, by your history, by your culture, by the tremendous size and diversity and vibrancy of your country. And to be here in Calcutta, one of the great cities of Asia, is an especial pleasure.
The second reason is professional. Trade runs deep in the instincts of both our countries. We already conduct a vast amount of trade together and the volume is increasing steadily. In the last four years our trade has almost doubled to 3.5 billion pounds sterling every year. Now that is a remarkable achievement, but remarkable though that is, I am convinced that we can still do far more, both in trade and in mutual investment. And I am here today to ensure that we do in the future.
My third reason is both past and future. On 15 August, India will celebrate the 50th anniversary of your Independence and your friends in Britain will be celebrating it with you. And I am particularly delighted that Her Majesty The Queen will visit India in October and that Prince Edward and the Lord Mayor of London, together I believe with the Royal Yacht, will be here in March. And at the same time there will be a comprehensive programme of arts and cultural events, a large number of them very generously sponsored by many of the Indian and British companies represented in this meeting today.
So I am privileged to be here at the beginning of this anniversary year which will celebrate not only your independence but also the Indo-
Fifty years. If you compare India's position today with fifty years ago then the distance that you have travelled is truly remarkable. India is one of Asia's great regional powers and will enhance its position even more widely in the years ahead. So how absurd it is, how ludicrous it is, that India was not included in the Asia-
But history is intriguing and fascinating, but it is the future that must predominantly concern us and our generation. So given all that India has achieved in the last 50 years, what are the prospects for the next 50? What can India become within 50 years from today? The size and the richness of your land, and the talent of the Indian people, make it likely that within 25 years, let alone 50, India will have firmly established herself as one of the world's economic powers. And that is certainly going to be the case if India continues with the programmes of economic reform to which the Prime Minister assured me yet again this morning that he and his government were fully committed.
And with this increasing economic authority will come new political, new security and new defence responsibilities and a strategic role for India in the first half of the 21st century. It is I think for India an exhilarating prospect and one that should fill India with confidence and her friends around the world with pleasure.
It may well be true to say that it is a cliche to comment that the relationship between our two countries is unique. But cliche or not, it happens to be true. For in addition to our trade links, the histories of our countries have been deeply intertwined over the past two and a half centuries, not least of course in this great city of Calcutta. And whatever our ups and downs have been over that time, and there often have been ups and downs in our relationship, our two cultures have separately deeply influenced each other in almost every sphere. Any visitor to India can see that and so can any visitor to the United Kingdom.
But today's relationship between Britain and India -
The first is the English language which has become the international language for the world's trade and commerce. English is a global advantage to both of us. The cultural cross-
Indeed in many ways the ties that really bind countries together are those created by direct and natural links between the citizens of those countries, links between people. And that is the second area of key importance. So I want just for a moment to highlight today the role of the Indian community in my own country.
Britain today is a multi-
Particularly relevant is the increasing Indian presence in the ownership and management of British companies. India's entrepreneurial flare is making itself felt in Britain, as it is in India, and I welcome this unreservedly and I look forward to seeing it grow further in the years ahead.
The Indian community is now reckoned to be almost one million strong in the United Kingdom. They reinforce important values in our society, the importance of the family, the need for a sound ethical framework to govern our conduct and a belief in our ability to make a better life for our children through education, industry and enterprise. And as an integral part of British society they create an unbreakable bond between our countries which you will all know of from your own personal experience.
The third essential aspect of our links is our joint membership of the Commonwealth, a Commonwealth happily rejuvenated in recent years, not least by South Africa's renewed membership.
It bring together an historically unique cross-
Britain and India have a key role to play as two of the Commonwealth's leading members and I much look forward to welcoming your Prime Minister to the Commonwealth Heads of Government Meeting which Britain will be hosting later this year in the historic city of Edinburgh, a city indeed not far from Dundee which the jute industry so closely links with Calcutta.
Mr President, one issue which the Commonwealth is well suited to tackle is the promotion of international trade. I see this of key importance, key importance for the developing world as well as for the developed world. And that is why I suggested that the theme for India should revolve around the question of trade, investment and development and the way to build Commonwealth prosperity.
I want to turn now to the three elements -
Let me turn firstly to trade. It is self-
But I am also convinced that we can do far more. Ian Lang, the President of the Board of Trade, who is here with me this afternoon, set a target of 5 billion pounds sterling by the year 2000 when he addressed your centenary meeting last year. We are on track to reach that target and I am determined that we should get there and then go further. We are certainly taking active steps to do so, and that is why on this particular trip to India I am delighted to be accompanied by perhaps the most powerful trade mission ever to have left Britain's shores together. The Chairmen, Chief Executives and senior board members of sixty of Britain's largest companies, they collectively represent some twenty percent of the United Kingdom's total turnover and 30 percent of our total exports.
And why are they here? They are here because they -
And these businessmen with me today are not here for one quick deal in or out, these are companies either with a long historic relationship with India or companies who see their relationship with India as a relationship that will stretch far into the future and widen and deepen. They are not here for today's contract, they are here for the long haul and the long term relationship with your country and with your industry.
But it is not only the large British companies that are now playing their part in India's economic growth. Over 600 new Indo-
My second crucial ingredient is investment. The United Kingdom is now the world's second largest outward investor and we have for some years been the largest overseas investor in India. But in the last four years, since the formation of the Indo-
This is remarkable progress, but I have to tell you frankly that it isn't all plain sailing. Bureaucratic inertia and a lack of transparency in the awards of contracts continue to discourage some foreign investors. I know your government is committed to tackling this and I warmly welcome that. And as deregulation, as economic reform improves and accelerates in India, there is a wall of investment out there eager and willing to come and invest in the new and emerging India that the world can see so clearly.
But that investment is two-
So India's investment is welcome for you and it is profitable for the investor.
But I firmly believe that trade and investment can only maximise their benefits if they are allowed to flow with the minimum, the very minimum possible, of government interference. That is why in the United Kingdom I am determined to unshackle the British economy from the bonds of bureaucracy, to sweep away petty interference and regulation, to cut through red tape so that the market is free to operate without one arm held behind its back by government and by government regulation.
We have a good deal more to do. But the results so far speak for themselves. By insisting on deregulation and by remorselessly bearing down on inflation and unnecessary government expenditure, Britain is now enjoying the best economic conditions for a generation, and also enjoying the strongest recovery of any of the leading European economies. Inflation around 3 percent; output growing at 7.5 percent; base rates at 6 percent; and unemployment now under 7 percent of the workforce and falling consistently throughout the last three years.
So it won't surprise you, Mr President, that I welcome once again the recent widespread liberalisation of the Indian economy. The removal of a string of tariff and licensing barriers has brought a surge of economic activity in inward investment.
So I warmly applaud your government's commitment to continuing liberalisation. Three key sectors for further progress are telecommunications, financial services and consumer goods. State of the art telecommunications will be vital for industrial success in the future. Opening up the insurance sector, for example, would also contribute significantly to long term growth providing scarce funds for infrastructure development. Opening up trade in consumer goods would create further investment and growth more widely. Indian tariffs are still high by international standards, especially when countervailing duty is added. I hope that early progress can be made in bringing them down too, as well as removing import controls and in improving the protection of intellectual property. Open markets, open markets for both goods and, increasingly, services create wealth and they raise living standards; they create opportunities for growth, for investment and for employment; they keep the pressure on companies to be competitive; they give exporters the chance to boost their sales and they bring lower prices and greater choice.
But it is not only because of the economic benefit that I so passionately believe in open markets and free trade. They also have a key role in promoting democracy and freedom of choice, and I am not here thinking specifically of India, one of the world's great democracies. But more generally, once consumers have the power to choose their product, it is not such a great step to demanding the right to choose their government. And trade and investment will only flourish against a stable political background. So open markets and free trade help to bind countries together in a community of [indistinct].
That outlook has been, and will remain, central to Britain's membership of the European Union. Whether for central or eastern Europe, or for countries further afield, I am convinced that the best way for the European Union to encourage democracy and prosperity is for its markets -
It is no coincidence that Britain is now far and away the leading destination for inward investment for the European Union with over 40 percent of the United States, Japanese and Korean investment. Overseas companies, based in Britain, now also account for 40 percent of our worldwide exports.
For all these reasons, Britain led the way with other member states in calling for the European Union's recent agreement with India to be generous and to be open to your Indian products for the evidence indicates that it is those countries that are most integrated into the world economy that achieve the fastest growth in output. The benefits of the increasing globalisation of international business are vast for those economies ready and able to take advantage.
And that is why I support free trade and open markets throughout the world and that is why I have called for the developed world to abolish tariffs on the imports from developing countries. Providing we all work on a level playing field, the opportunities for all of us are enormous.
And that is the importance of the World Trade Organisation. It provides a framework of rules for international commerce that fosters economic growth instead of hindering it. The World Trade Organisation held its first Ministerial meeting in Singapore last month and I was encouraged by the progress that it made, and I am convinced that India has nothing to fear, and much to gain, from it.
Meanwhile, Mr. President, I welcome also the progress being made in opening up regional trade in South Asia. I was especially pleased to see the recent water-
As you can see, I am overwhelmingly a vigorous advocate of trade but not -
My third and final vital ingredient is development assistance. Our belief in the benefits of free trade doesn’t mean that we underestimate the difficulties of getting there so in Britain we concentrate on using our aid budget both to help the poorest of the poor and in supporting countries in introducing or strengthening market disciplines and the other elements of good government and what does that mean it practice?
It means helping to finance the basic infrastructure to support local business and encourage foreign investment. It means helping countries to make progress with the social and environmental issues which along with economic growth are essential for sustainable development and it means helping to establish health and education system which can produce the healthy and skilled work-
Britain's aid programme for India at £100 million last year is by some way our largest aid programme for any country and in line with what I have said, it focused on a range of projects: projects to improve basic services such as water, education, health and family planning for the poor; projects to support reform in key sectors of the economy such as the power sector -
A great deal of our aid, of course, is concentrated here in West Bengal and I was very glad earlier today to announce an important new project to improve primary education here by providing more teacher training, more educational materials and more school buildings; it will improve the availability and quality of education for almost 2.5 million children in West Bengal. [Applause].
Mr. President, Britain and India, as close friends of long standing face many of the same challenges as well as different challenges, and it is right that India and Britain should compare our experiences and where we so wish seek to learn one from the other. In Britain, the benefits of open markets for our trade, for our investment and for the effectiveness of our development assistance proved themselves worthwhile not simply in themselves but because of the concrete benefits that they bring in their wake both in Britain and more widely.
Each country must makes its own choice. India’s government has made clear its own commitment to liberalisation and I have indicated already how much I welcome that. Britain’s aim is global free trade by 2020. That is ambitious but I believe it is achievable and Britain will use all its influence in the European Union, the World Trade Organisation and other key economic organisations to bring it about. We are determined to remain standard-
Mr. President, working together as firm friends I hope that Britain and India can work to prevent that and you can be sure that in pursuing your chosen course of liberalisation you will have no firmer friend than those you can find in the United Kingdom.
I spoke earlier about India’s role over the next 50 years. Perhaps I could close by describing how I see it for I am sure that the next 50 years hold out for India a remarkable promise and new responsibilities as well. I see India over the next 50 years fulfilling its potential as by then probably the largest nation on earth, I see India as a secular democracy that has resisted the siren calls of caste, religion, language and community, it has gained from its united in diversity but has spread its rich cultural gifts throughout the globe. I see India as a country which has seen that its poor need not be huddled masses but can be producers and consumers. I see a country with a rich civil society, a country which is a world leader in information technology, a cleaner and greener but certainly no less colourful nation and I see emerging a country with a rich heritage combining a prosperous present a promising future and I see India developing in those years as one of the world’s greatest economic powers, a political force for good regionally in Asia and a leading player at the top tables of the 21st century’s international institutions whether at the United Nations, in the Commonwealth or at the World Trade Organisation.
This is not some fanciful imagination of India’s future. It is a cool and clear-
If I were to leave you perhaps with three messages, what would they be? I think perhaps these:
The United Kingdom offers India a friendly, fixed point in an uncertain world. In partnership we can put the lessons we have learned together in the past to good use together in the future. The pain and difficulty of economic change, including greater transparency and accountability, are amply repaid by the results. It is through economic reform that India will become a major international economic power and finally, Mr. President, the message would be this:
Regional economic cooperation is the best platform both for resolving bilateral disputes and for entertaining the global economy. Trade and investment are not a threat to the sovereignty of India any more than they are a threat to the sovereignty of Britain, they are the keys to an independent and interdependent future. India’s future is assured, India’s growth and prosperity are certain if it pursues the direction in which it is going. India may be certain that not only will it gain internally from these changes but India will find that around the world its friends and admirers will be cheering it on as it makes those changes and nowhere, Mr. President, will they be cheering more consistently or more loudly than in my country, the United Kingdom. Thank you for being here! [Applause]