British PM to push Indian leaders on open trade

British Prime Minister David Cameron will push Indian leaders on Thursday to strengthen trade ties on the second leg of a visit marked by his warning to Pakistan about promoting the "export of terror."

Cameron was to hold talks in New Delhi with top officials including Prime Minister Manmohan Singh, and attend a summit on expanding economic relations between Britain and its former colony - now one of the world's fastest growing economies.

In a two-day trip seen as a test of Cameron's new focus on business in Britain's foreign policy, manufacturing groups BAE Systems and Rolls-Royce used the first day to unveil two defence deals worth a combined $1 billion.

In a speech in the Indian IT hub of Bangalore, Cameron on Wednesday stressed the role India can play in helping boost Britain's fragile post-recession recovery.

"I want this to be a relationship which drives economic growth upwards and drives our unemployment figures downwards," Cameron declared. 

"This is a trade mission, yes, but I prefer to see it as my jobs mission."

In comments to reporters after the speech, the prime minister also issued a warning to India's arch-rival Pakistan against becoming a haven for militant groups.

"We cannot tolerate in any sense the idea that this country (Pakistan) is allowed to look both ways and is able, in any way, to promote the export of terror, whether to India or whether to Afghanistan or anywhere else in the world," he said.

The comments will be welcomed in India which has long accused Pakistan of harbouring and abetting extremist groups like Lashkar-e-Taiba which it blames for the murderous 2008 assault by militant gunmen on Mumbai.

His remarks came days after the leak of secret US military documents that detailed links between Pakistan's intelligence services and Taliban insurgents in Afghanistan.

"We should be very, very clear with Pakistan that we want to see a strong, stable and democratic Pakistan," Cameron said.

"It should be a relationship based on a very clear message: that it is not right to have any relationship with groups that are promoting terror," he added.

As well as his meeting with Singh, Cameron will hold talks on Thursday with Indian Foreign Minister SM Krishna, and issues of regional security involving Pakistan and Afghanistan are sure to figure in both sets of discussions.

The main focus, however, will remain Britain's drive to take bilateral trade and economic ties with the former jewel in its colonial crown to a new level.

Cameron arrived in India late Tuesday at the head of the largest British delegation to travel to India in recent memory, including a host of senior cabinet ministers and corporate bigwigs.

In Bangalore, Cameron visited the country's second-largest software exporter Infosys and the state-run defence giant Hindustan Aeronautics Ltd (HAL).

In the first of a series of expected deals, BAE Systems said it had finalised the sale of 57 Hawk trainer jets to India - to be built by HAL under licence - in a deal worth $779 million.

Rolls Royce will provide the engines for the aircraft for another £200 million.

Cameron highlighted the recent investment in Britain made by Indian-run companies such as the car maker Tata and steel group Arcelor Mittal, but also pushed India to open up its tightly regulated domestic market.

"We want you to reduce the barriers to foreign investment in banking, insurance, defence manufacturing and legal services - and reap the benefits," he said, adding that a new global free-trade deal was vital.

Before his official meetings on Thursday, Cameron will lay a wreath at the memorial to India's independence icon, Mahatma Gandhi. He then flies back to Britain later in the evening after a state dinner with Singh.

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