The relationship between UK and Indian businesses has been put in the spotlight with the first prime ministerial Indian investment summit being held in London yesterday (9 October). The meeting of government, business and partner organisations has spurred renewed speculation on when India’s retail sector will be opened to foreign investment.  

The summit, UK Trade and Industry (UKTI) told just-food, aims to aid the development of a two-way investment relationship. Talks were be lead by Prime Ministers Tony Blair and Dr. Manmohan Singh.

“We want our business relationship to develop ever stronger. Sharing our knowledge, resources and skills. Good for British jobs, investment and the economy,” said Trade and Industry Secretary Alistair Darling “The talks and agreements show the potential. By building on it we can both grow further, faster.”

Ahead of the summit, Amit Mitra, Secretary General for the Indian Chamber of Commerce, reportedly urged Tesco to enter the Indian retail sector by developing wholesale operations. Under India’s rules governing foreign direct investment, international retailers are barred from entering the market at the retail level, but are free to invest in the wholesale sector. Mitra’s invitation came with a warning as he observed that German retailer Metro had already used this route into the market.

“Tesco has to be bold enough to go into cash and carry,” Mitra told Reuters news agency. “This is where Tesco has to go in; because if Metro is already there with its feet on the ground, when India’s overall retail market opens they will be able to spurt.”

It has also been suggested that the British PM will lobby for the opening of the market when Blair and Indian premier Singh meet today (10 October).