British companies are falling behind their rivals in the United States, Europe and the Far East in the race to invest in India's fast-growing economy, MPs warned yesterday.
The Commons Trade and Industry Select Committee said the UK should be generating a much higher level of trade and investment because of the two countries' "unique relationship".
The report criticised British companies for seeing the Sub-continent as merely a source of cheap labour rather than an emerging market for their goods and services. Official figures show just 1 per cent of UK trade is with India with its population of 1.1 billion - compared with Belgium that takes 4.5 per cent of UK exports despite having a population of 10 million.
In its report it said MPs were concerned the UK's perception of India had been "seriously distorted" by a focus on outsourcing and call centres.
It said there was a host of genuine investment possibilities in manufacturing, automotive and aerospace sectors and "vast opportunities" for the UK's higher education sector.
Peter Luff, the Conservative MP who chairs the committee, said: "UK investors don't yet really understand the opportunities that India presents.
"If we are to take full advantage of this golden opportunity, UK firms must reassess their perception of the Indian economy as simply a source of low-cost labour and the Government must do more to help them."
Meanwhile Gordon Brown used his keynote Mansion House speech to the City of London last night to pledge the Government would take action to boost skills to help the UK compete with countries such as India.Reuse content