Australia Markets closed

Helicopter scandal may cloud Cameron's India trip

Guy Jackson
David Cameron arrives by helicopter in Lashkar Gah in Afghanistan's Helmand province last July. The British Prime Minister heads to India next week with an extensive trade delegation for a visit clouded by a corruption scandal over British-built helicopters.

British Prime Minister David Cameron heads to India next week with an extensive trade delegation for a visit clouded by a corruption scandal over British-built helicopters.

The trip to Delhi and the commercial capital Mumbai comes hot on the heels of a visit to India by French President Francois Hollande to drum up trade, underlining the growing importance of the Indian economy.

Cameron said ahead of the visit that he wanted the relationship between Britain and India to be "one of the great partnerships of the 21st century".

But his second trip to India as prime minister will require deft handling after the Indian government said it was cancelling a $748 million (560 million euro) deal to buy 12 helicopters for VIPs from an Italian firm amid allegations the contract was won through kickbacks.

India took steps to scrap the contract on Friday after Italian investigators probed allegations that aerospace group Finmeccanica, the parent company of Anglo-Italian helicopter unit AgustaWestland, had broken the law by paying bribes to foreign officials.

The helicopters, three of which have already been delivered, are manufactured in southwest England.

Cameron's first overture to India was snubbed last year when Delhi selected a French fighter jet over the part-British Eurofighter in a $12 billion contract, a deal which Hollande was seeking to tie up during his visit.

The British government has taken note of the fact that the huge contract with Dassault Aviation is still not finalised, and hopes to remind the Indian government of Eurofighter's merits in case they change their mind.

A government source told Britain's Press Association news agency: "Hollande was in India this week and a deal has not been signed so we will want to find out from the Indians how their talks are progressing with the French."

Aside from defence, British retailers are keen to increase their presence in India and executives from the Tesco supermarket chain, Britain's biggest retailer which already has a joint venture in India, are expected to fill some of the seats on Cameron's plane.

The prime minister remains confident that he will reach of goal of doubling Britain's trade with India from £11.5 billion ($17.8 billion, 13.4 billion euros) in 2010 to £23 billion by the time he faces the next general election in 2015.

Cameron also wants to use the trip to correct any misunderstandings about his government's drive to bring immigration numbers under control amid concerns that young Indians could be deterred from applying to study in Britain.

Admitting that the government "haven't perhaps communicated this properly" to would-be students, he said there was "no limit" on the numbers of Indians studying at British universities or staying on in graduate-level jobs.

In an interview with the London-based Asian television and radio station Sunrise, Cameron said he was "really, really enthusiastic" about the prospects for increased trade between the two countries.

"We both want to see jobs, we want to see growth, we want to see investment," he said.

"It's a very special partnership between Britain and India.

"We've got these ties of history, language, culture, but really I see it as a very strong relationship about the future -- huge investment from India into Britain, huge investment from Britain into India, lots of our businesses partnering, lots of trade and lots of jobs."