May Day: India Inc asks for more Brexit clarity

Britain has been trying to build its economic relationship with India

On the eve of British Prime Minister Theresa May's visit to India, the country's finance minister Arun Jaitley has told the BBC that in a post-Brexit world, "it's extremely important that both India and the United Kingdom are looking at the world after Brexit".

And he hopes this will mean India and the UK will keep strengthening trade between them.

But that optimism is at odds with what some in corporate India are feeling.

In an exclusive interview, the boss of one of India's biggest IT firms tells me he hopes that as the UK government negotiates its exit from European union, "it makes it more like a 'soft' Brexit instead of a 'hard' Brexit".

C.P. Gurnani, the 57-year-old chief executive and managing director of Tech Mahindra, one of India's top ten IT services firms, said "no one budgeted for two separate headquarters".

His firm has its headquarters in the UK, and that changing that model - to bring an EU base too - would add to the cost and flexibility Tech Mahindra provides clients.

Mr Gurnani said he was holding fire on further UK investment until there was more Brexit clarity

Mr Gurnani also told me that it would be challenging for Indian companies based in the UK to continue to access the EU market in the case of a 'hard' Brexit.

But as my colleague Kamal Ahmed has explained in a previous blog, government supporters of a 'hard' Brexit appear to have the upper hand right now.

And that's not what firms like Tech Mahindra want to hear.

In a 'hard' Brexit scenario, the free movement of people in the EU may be off the cards, and as Mr Gurnani says, a key part of his business is people.

"If people are not going to be able to travel," he told me, " and if the visas today restrict you, that you need to be either a UK visa or a European visa...it will not be possible to deliver business only from the UK."

Job creator

India is one of the biggest foreign investors in the UK, and notwithstanding the linguistic, cultural and colonial ties the two nations have shared, economically their relationship has been growing closer over the last few years.

According to the UK Department of International Trade, India invests more in the UK than the rest of the EU combined.

It also emerged as the third largest job creator in the UK in 2014-15, with about 110,00 people currently employed in Britain by Indian firms.

Meanwhile according to this report by the Confederation of Indian Industry and consultancy Grant Thornton, the total turnover of Indian companies in the UK has risen by 18% in the last year.

But whether all of that will continue in a post-Brexit world, remains to be seen.

Tech Mahindra's Mr Gurnani was reticent, to say the least, on future plans for his firm's UK investment.

"I think I will have to take a pause... and reflect and wait," he said, underlining the nervousness and anxiety many in the foreign business community are feeling about Brexit.

Theresa May has already indicated that the formal Brexit negotiation process will begin by the end of March 2017 - despite the High Court ruling that Parliament must vote on whether the UK can start the process of leaving the EU.

Whatever the timeline may be, she will have her work cut out in India, as she tries to reassure Indian businesses that their future remains secure in the post-Brexit Britain.