India-UK economic partnership is expected to get a fillip from the new Free Trade Agreement between the two countries. The prospects of bilateral ties will be huge in areas like AI, fintech, sustainability, and life sciences, Howard Dawber, London’s deputy mayor of business and the chair of London & Partners, the city’s business growth and destination agency, told Nesil Staney. Stating that these areas will drive the UK’s post-Brexit policy, he said strong partnerships are also possible in drug trials and joint development of drugs. Edited excerpts:
Q: What are London’s unique offers for Indian businesses?
A: India is already the number-one source of foreign direct investment (FDI) into the city. Our offer is a growing city, probably the financial capital of the world, and certainly the fintech capital of the world. In AI and insurance, we’re ahead of New York. What we offer is a platform to the UK market, and also for global expansion. The city’s culture is a very open and welcoming one. There is a big Indian business community in London. There’s a sort of “can-do” attitude, a more relaxed and friendly one, not merely transactional.
Q: Should Indian companies consider London listings?
A: The London Stock Exchange is very strong. New York’s had a bit of a good run recently. I’m not going to deny that. NASDAQ has been doing really well. Compared to our Alternative Investment Market (AIM), they have stronger ones. We’re determined to stop that by raising our game. We’re working very hard at the national level and with the LSE to ensure maximum liquidity.
Q: What are your initiatives to boost innovation and support startups?
A: We produced a growth strategy in February, which set out the areas and sectors we think are growing and can be turbocharged. Our trump card is the IP (intellectual property) coming out of London. The startup and scale-up scene in London is unprecedented. We have had 124 unicorns over the last few years, which is more than most European countries put together.
Last year, we raised more funds in fintech than Silicon Valley. We’re probably ranked as the number one location in the world for talent. There are 104 universities in London, 50 of them doing research or teaching, and the others representative offices. We have more universities in the global top 100 than any other city on the planet. Big pharma companies like AstraZeneca, GSK, Merck represent the mature end of the market. These are new companies, using AI and gene sequences to develop targeted, personalized drugs for particular diseases or ailments.
Q: What are the collaborations between UK and India in life sciences and AI?
A: Partnership between the UK and India, in drug trials or jointly developing drugs, is significant. Some of our top teaching hospitals test and validate drugs in a way that is more difficult elsewhere because we have a more diverse population. Our speed from drug trials to the actual market is good. Another important aspect is providing the technology support. For example, major AI services companies like TCS, who operate in this space, deliver robust IT infrastructure to enable and accelerate these advancements.
Q: How do you see the balancing between data regulations and adoption of AI?
A: We have a robust regulatory framework for AI. The US tends to be reactive in its regulation. The EU has a very prescriptive way of doing regulations. In comparison, we’ve adopted a principles-based regulation system. There’s been a lot of experimentation, particularly under the new government.
London has 1,500 AI startup and scale-up businesses. We’ve also been careful not to stifle innovation. The challenge is to make sure AI does more good than harm and to harness it for the good of society and the economy. From London’s perspective, as AI washes through industries, there will be sectors where it significantly impacts employment numbers. We want to be the place that creates AI, shape it, develop the models, and use the data to build the systems.
Q: What are the sectors which are the primary focus of post-Brexit policy?
A: Our growth sector is technology: AI and quantum technology and so on. Fintech and other types of applied tech, including deep tech, are in focus. Then there’s health and life sciences, which is a very strong growth area. And then sustainable tech and the transition to net zero, which means electric vehicles, energy conservation, sustainable energy generation, new materials, recycling etc. That growth has been driven by quite strict national policy aiming for net zero by 2030 or 2050 in some cases. That has spurred innovation. For example, our whole public transport fleet will be electric by 2031. We’ve improved air quality massively. While it was said it would take nearly 200 years to reach legal levels again, we did it in 9 years.
Traditional sectors like financial and business services, construction, and the built environment remain very strong. Growth sectors also include the creative industries – TV and film production is booming. Associated business services – financing, legal, insurance – thrive alongside it. Then there’s the experience economy: sport, music, theatre, events, tourism.
Q: What is the scope of India-UK FTA, and how does it relate to the India-UK Vision 2030?
A: FTA with India is huge for us and has made a big difference already in business interests between both countries. The deal is more of a collaborative platform for future engagement.
You’ll see this being built upon, as in the recent visit by Prime Minister Keir Starmerto Mumbai. I think future collaboration between the UK and India could be very strong because we have very compatible strengths.
What the FTA offers both countries is a pooling of resources, with Indian companies able to see London as their backyard not only to sell things but also to partner with new technologies, find partners, and then go together to other markets. The prospects of British and Indian businesses not just selling to each other, but also collaborating and selling globally has got brighter.
But the real gain will be the business deals that come from it (FTA). We have just expanded our military budget, for example, and there are opportunities for Indian companies doing cutting-edge work, particularly in cyber defence and aerospace. There are also huge infrastructure projects coming up in the UK, where we would like Indian companies to participate. On the digital side, we are about to set up a digital ID system and there is a lot of public sector transformation going on, which suits some Indian businesses well. We have strong scale-up businesses with unique IP, especially around AI and data interpretation to deliver insights previously unknown. One example is Quantexa – a UK company founded by an Indian diaspora member that helps businesses analyse messy customer databases to identify core and less important customers, improving sales efficiency. They started with four people in 2017 and now have 1,200 employees and are a unicorn.
Q: Many hedge funds are shifting base to Dubai and other locations, and resort to increased offshoring. How is London addressing these challenges?
A: I think that concern has been overplayed. London managed to stay globally relevant despite all the changes over the last 15 years.
London and Manchester have stayed relevant by being flexible and innovative, with responsive regulation rather than over or under-regulation. Creating a space where innovation is encouraged has been key, and successive governments have done that. Creating a space for innovation and nurturing has retained London’s stature.
Growth in fintech and AI-powered fintech adds an extra edge to not just traditional finance but cutting-edge services and new banks. It’s been a mix of getting the basics and legal structures right, and allowing innovation, that’s driven our continued success.
Q: There has been a lot of M&A activity between India and the UK. What is the outlook?
A: The FTA supports that trend. Historically, we’ve had good examples — Tata-Jaguar Land Rover, Tata Steel-Corus. There’s probably more scope for collaboration in the financial sector. It will be interesting to see how that plays out. I would also say health and life sciences could be really interesting, because India is a global leader in drug development and manufacturing, with a huge and growing market.