Britain 'will have to earn' trade deals with India

Britain will have to earn job-creating trade deals with India rather than relying on historic links and "sentiment," David Cameron will say today.

Calling for a "new special relationship" with India during a two-day visit to the country, he will say: "I want to take the relationship between India and Britain to the next level. I want to make it stronger, wider and deeper."

As India forges closer economic ties with the United States, the Prime Minister will admit that India has "the whole world beating a path to its door" because of its growing economy. Speaking in Bangalore, Mr Cameron will express the hope that the UK-India relationship "drives economic growth upwards".

Mr Cameron has taken the biggest British delegation to India in recent times. It includes six fellow ministers, 39 businessmen and representatives from sport, culture, science, technology and local government.

In his speech, he will argue that the UK and India are in the same boat after the "global economic carnage" of the past few years. "Our strategy must begin with making our own economies as open as possible," he will say. "These changes are about making our countries the best place in the world to do business – and it's in that context that we should encourage more investment by Indian companies in Britain and vice versa."

He said there was scope for a "dramatic expansion" in trade between the two countries. Britain would streamline customs red tape to save time and money. In return, it wanted India to reduce barriers to foreign investment in banking, insurance, defence manufacturing and legal services. An order for BAE Systems to provide Hawk jets for the Indian military is expected to be confirmed during the visit.

India's plans to invest more than £500bn in infrastructure in the coming years was good for Indian business and a chance for British companies to generate growth, Mr Cameron will tell his hosts. They could also be part of a retail market growing by 25 per cent annually and a mobile phone market attracting 15 million new users every month.

Writing in The Hindu newspaper today, Mr Cameron will say: "For centuries my country assumed we could set the global economic pace. But economic power is shifting – particularly to Asia – so Britain has to work harder than ever before to earn its living in the world."