Cameron courts India and helps clinch jet deal

NEW DELHI (Reuters) - Prime Minister David Cameron trumpeted a $1.1 billion (704.6 million pounds) defence deal with India on Wednesday, an early result of a big diplomatic push to court Indian business and tap new sources of economic growth.

Prime Minister David Cameron (R) speaks to India's Trade Minister Anand Sharma during their meeting at number 10 Downing Street in London June 28, 2010. REUTERS/Andrew Winning

In comments likely to please New Delhi and upset Islamabad, Cameron said India’s arch rival Pakistan should not “promote the export of terror.” That comes days after a huge leak of U.S. documents raised questions about Pakistan’s role in Afghanistan and its support for the Taliban.

On his first visit to India since taking office, Cameron took six ministers and more than 30 senior executives from top UK firms with him, to show Britain is serious about boosting economic exchanges with Asia’s third-largest economy.

BAE Systems, Europe’s biggest defence contractor, and engine maker Rolls-Royce were early winners. They signed a deal worth about $1.1 billion with a state-run Indian firm to supply 57 Hawk trainer jets to India, one of the world’s biggest defence markets.

While Cameron toured Bangalore, his chancellor George Osborne was in Mumbai to persuade to free up its financial services market and hasten the signing of a free trade deal between India and the European Union.

Sources in Cameron’s entourage also said London had decided to start granting licences to its civil nuclear firms to export to India, opening up prospects of deals potentially worth billions. The move follows in Washington’s lead and is intended to build trust with India to help business ties.

“I want this to be a relationship which drives economic growth upwards and drives our unemployment figures downwards,” Cameron said in a speech to young Indian business leaders at the high-tech Infosys campus in Bangalore.

“This is a trade mission, yes, but I prefer to see it as my job’s mission,” he said.

India, a former British colony, belongs to the “BRIC” group of rapidly growing emerging economies along with China, Brazil and Russia, the likes of which Britain is hoping to tap as it seeks to offset drastic public spending cuts at home.

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Cameron has often lamented that Britain trades more with Ireland than it does with all the BRICs combined and he has vowed to remedy that with vigorous pro-trade diplomacy.


Cameron said on Wednesday that Pakistan must not become a base for militants and “promote the export of terror” across the globe, saying their bilateral ties depended on that.

The remarks are likely to cheer officials in New Delhi, which has long accused its neighbour of backing strikes on Indian targets including the 2008 Mumbai attacks.

“We cannot tolerate in any sense the idea that this country is allowed to look both ways and is able, in any way, to promote the export of terror, whether to India or whether to Afghanistan or anywhere else in the world,” he said.

Pakistani officials dismissed the comments, with foreign ministry spokesman Abdul Basit telling the BBC that there was “no question of Pakistan looking the other way” and accusing Cameron of heeding leaked documents that were “unverifiable.”

In an interview on India’s NDTV later, Cameron toned down his comments, saying that “it’s unacceptable for anything to happen within Pakistan that is about the promotion of terror.”

Cameron leads the biggest trade delegation in modern times to India as a statement of intent amid talk of Britain wanting to forge a “special relationship” with India -- a phrase more closely associated with Britain’s ties with Washington.

Cameron’s Conservative-led government, and some Indian commentators, think its Labour predecessor did too little to maintain ties with India, the world’s second most populous nation with 1.2 billion potential customers.

The Indian response to the British overture was guarded.

“We have seen reports and are aware of the intention of the government of UK to have a new special relationship with India,” T.P. Sitaraman, the joint secretary at India’s foreign ministry, told reporters in New Delhi on Wednesday.

“The discussions will naturally throw light on what those terms mean.”

Additional reporting by C.J. Kuncheria and Matthias Williams in NEW DELHI and Sumeet Desai in MUMBAI; editing by Paul de Bendern/Keith Weir