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article imageBritain-India trade deals announced as Modi speaks out on EU

By Katherine Haddon (AFP)     Nov 12, 2015 in World

Trade deals worth £9 billion (12.7 billion euros, $13.7 billion) will be announced during Indian Prime Minister Narendra Modi's visit to Britain, David Cameron said Thursday, as Modi indicated he wanted the UK to stay in the EU.

London is rolling out the red carpet for Modi on his three-day visit to Britain, the first by an Indian prime minister in nearly 10 years. He will meet Queen Elizabeth II on Friday and address a huge rally at Wembley Stadium.

After talks with Cameron, Modi became the first Indian premier to address Britain's parliament and was feted with a flypast by the Red Arrows aerobatics team, which trailed smoke over London in the colours of India's flag.

Cameron announced the trade deals at a press conference and also revealed that £1.0 billion of rupee-denominated bonds would be traded in London.

"We want to forge a more ambitious, modern partnership, harnessing our strengths and working together for the long term to help shape our fortunes at home and abroad in the 21st century," he said.

The Royal Air Force Aerobatic Team  the Red Arrows  conduct a flypast over the Houses of Parliament ...
The Royal Air Force Aerobatic Team, the Red Arrows, conduct a flypast over the Houses of Parliament in central London on November 12, 2015 in the colours of the Indian flag during Prime Minister Narendra Modi's visit
Daniel Sorabji, AFP

The deals are expected to include India buying more BAE Systems Hawk trainer jets -- the same plane used by the Red Arrows -- for its armed forces.

But when Modi was asked whether Britain should remain in the EU, in a referendum called by Cameron and being held by the end of 2017, Modi said: "As far as India is concerned, if there is an entry point to the European Union, that is the UK".

- 'Climate of fear'? -

Modi's visit has also drawn protests.

Up to 500 people held a demonstration outside Downing Street against the visit before the talks with Cameron, many of them Sikhs.

Modi was elected by a landslide in 2014 but he and his Hindu nationalist Bharatiya Janata Party (BJP) have faced accusations from opponents that they are failing to protect minorities.

Indian Prime Minister Narendra Modi inspects a guard of honour outside the Treasury in London on Nov...
Indian Prime Minister Narendra Modi inspects a guard of honour outside the Treasury in London on November 12, 2015 on the first day of a three-day visit to Britain
Justin Tallis, AFP

He was effectively banned from Britain until three years ago over anti-Muslim riots which killed more than 1,000 people in 2002, when he was chief minister of Gujarat state. He has always denied any responsibility.

Nirmala Rajasingam, one of the protest organisers, said: "We have been protesting against the Modi government for a very long time because the matters of the Gujarat atrocities have not been settled yet."

Meanwhile, roughly 200 literary figures, including Mumbai-born British author Salman Rushdie, signed an open letter warning of a "rising climate of fear" in India and urging Cameron to demand that Modi provide "better protection" for critical voices such as writers and artists.

- Many countries wooing India -

Both countries are seeking to build closer economic ties with the other.

India is the world's ninth-largest economy and, at 7.4 percent, has the fastest growth rate in the G20.

Former colonial power Britain is the fifth-largest world economy. The government is pushing hard to increase overseas trade as it tries to shrink its large deficit in the wake of the 2008 financial crisis.

Gareth Price of London-based foreign affairs think-tank Chatham House said Britain was lower down India's pecking order than other nations such as Japa or Germany.

Protesters demonstrate against Indian Prime Minister Narendra Modi in central London on November 12 ...
Protesters demonstrate against Indian Prime Minister Narendra Modi in central London on November 12, 2015 during the leader's three-day visit
Leon Neal, AFP

"A lot of countries are wooing India with deeper pockets and without the historic baggage," he told AFP.

Price added that India's "number one" ask from Britainwas usually more visas for Indian nationals.

But he stressed this was "problematic" for Cameron, who has been struggling to reduce immigration since taking power five years ago.

Ahead of the visit, Modi's government this week announced plans to liberalise its foreign direct investment regime in areas including defence, banking and construction. Britain is the third-largest source of FDI in India.

The move is seen as a bid by Modi to counter accusations that his reform drive is stalling, highlighted by the BJP's bruising defeat Sunday in elections in the state of Bihar.

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