U.K. Hopeful on India Trade Despite Delhi's Past Reluctance

(Bloomberg) -- The U.K. has no plans to scale back its ambitions to complete a post-Brexit free trade deal with New Delhi, despite India's habit of dragging out negotiations, Chancellor of the Exchequer Philip Hammond said.

"We want to strike agreements with the fastest growing economies in the world," he told a Fintech conference in India's commercial capital, Mumbai, on Wednesday.

Hammond said Britain's decision to leave the European Union last June was not a vote for isolation, but for global partnerships, adding the country would remain a strong advocate for free trade.

"Although it's easy to look at India's history of negotiating trade arrangements and say that it hasn't always been fruitful, India is a country that's changing very fast," Hammond told reporters a day earlier in New Delhi.

Hammond and Bank of England Governor Mark Carney are in India this week for trade discussions and to promote British business. 

India-U.K. trade negotiations must wait until Britain finalizes the terms of its exit from the European Union, Finance Minister Arun Jaitley made clear in a joint press conference with Hammond.

In addition to that delay, India also has a history of dragging out trade talks: An India-EU negotiation remains open after roughly a decade, and bilateral trade pacts with other countries such as Canada and Australia have yet to be finalized after several years. India's stance has also led to frustration among members of a proposed Asia-wide trade pact known as the Regional Comprehensive Economic Partnership, or RCEP.

However, Hammond said that India is opening up under Prime Minister Narendra Modi.

"There is a dramatic change going on," he said. "I don't think in any case, but especially in the case of India today, we can necessarily say that past performance is a good guide to future performance." He added, "India is a much more open and outward looking country that it was even a very few years ago."

Even as Hammond declined to say whether Britain might pursue smaller, more manageable pacts ahead of a free trade deal, at least some British businessmen remained hopeful of incremental steps. Gerry Grimstone, chairman of Standard Life Plc and deputy chairman of Barclays Plc, said it might be possible to strike other arrangements.

"Close economic partnerships can be struck very quickly," Grimstone said in New Delhi. "They may well choose, because of the importance of financial services, to do something on financial services very quickly."

--With assistance from Anindya Upadhyay and Anirban Nag

To contact the reporter on this story: Iain Marlow in New Delhi at imarlow1@bloomberg.net.

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Russell Ward