The Finance Minister, Mr Pranab Mukherjee, has pledged to strengthen investment and trade links with Britain as he met with Britain's Chancellor of the Exchequer, Mr George Osborne, during a visit to London this week.
“Today's dialogue confirms billions of pounds of trade and deals,” said Mr Osborne at the meeting.
The talks came after the Cabinet Committee on Economic Affairs approved the $7.2-billion deal struck by BP with Reliance Industries.
BP will take a 30 per cent stake in each of 23 oil and gas blocks belonging to RIL, and could be worth up to $20 billion.
“Britain is now making the largest foreign investment in India,” said Mr Osborne. “We want to see the level of trade rise significantly,” he added.
Britain is now the fourth largest investor in India, while India is the third largest in Britain.
Bilateral trade in 2010 was over £13 billion, up from over £11 billion in 2009, according to UK Treasury figures.
Constructive talks
Mr Mukherjee said that constructive talks were taking place to take bilateral trade and investment to their “full potential”.
Among the issues discussed were strengthening financial sector collaboration for mutual benefit.
Last week, Lord Sassoon, the Commercial Secretary to Britain's Treasury Department urged India to open up its financial sector to foreign investment.
Other issues discussed included further cooperation in the infrastructure sector, as well as science and technology, food processing and higher education, he said.
Fifth round, next year
The next, fifth, round of talks are due to take place in New Delhi next year.
Mr Mukherjee rejected suggestions that foreign investors were becoming cautious about investments in India, particularly with the length of time being taken over decisions such as the Cairn-Vedanta deal.
Excluding the Reliance-BP deal, FDI in the first quarter of the year had risen to $7.9 billion, nearly double the figure last year.
Investment in India between 2000 and 2010 had reached $176 billion.
“This speaks of the investment climate in the country,” he said.
Mr Osborne said discussions also focused on cooperation within the G20 to manage risk, and the EU India Free Trade Association, which he hoped would be concluded by the end of the year.
“We should not let the negotiations founder,” he said.
On the matter of a social security agreement between India and the UK, Mr Osborne said the matter had been raised though an immediate resolution was unlikely.