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London shuts down business offices in New Delhi, Mumbai

business Updated: Feb 07, 2010 23:40 IST

The Mayor of London, the city where Indian business establishments occupy a pride of place, has been accused of closing down his business facilitation offices in New Delhi and Mumbai through the "back door."

Mayor Boris Johnson, a leading light in Britain's opposition Conservative Party, has told London's regional assembly that representatives of the London Development Agency (LDA) in New Delhi and Mumbai resigned last year and have not yet been replaced.

"The LDA representative in Delhi left in early 2009 and the work was covered by the Mumbai office. The representative in Mumbai left later in the same year and measures are now being taken to ensure that London continues to maintain an appropriate presence in India," Johnson said in reply to Murad Qureshi, a Labour member of the London Assembly.

"The LDA is currently investigating how best to address this matter. At present the LDA maintains its registration in India but does not have office space in either Mumbai or Delhi," the mayor added.

Johnson's comments follow his party leader David Cameron's call this week for forging a "special relationship" with India, led by business and industrial entrepreneurs of the two countries.

Coming in the wake of cost-cutting measures undertaken by the LDA, the Mayor's comments were slammed by Qureshi.

"It is quite disgraceful that the closure of the GLA's offices in India has been carried out by the back door, without Londoners being informed about the decision to mothball them," Qureshi told IANS.

"India has grown in global importance due to its having escaped the worst consequences of the recession. It is vital that London's businesses are properly represented there," he added.

Indian-owned businesses in the British capital currently generate over 14.4 billion pounds and represent five percent of London's economy.

Even in the midst of the global financial crisis, 14 Indian companies either set up or expanded their operations in London in 2008-09 and Londoners expected a continuing surge in 2009-10, according to Think London, the foreign direct investment agency for the British capital.

India is already the second-largest investor in London and projects from the country helped create over 4,000 jobs worth 461 million pounds to the London economy last year, making it the second-highest source of jobs after the US.

However, Johnson added: "I recognise the importance of the Indian economy, and am committed to continuing our excellent relationship with India, not least because of the potential benefits to London in terms of inward investment, job creation, student numbers and tourism."

Allegations that Johnson shut the Indian offices through the back door followed the closure of the LDA's offices in Venezuela and Moscow, generating savings of 100,000 pounds.

The LDA, which has three more foreign business offices in Beijing, Shanghai and Brussels, recently conducted a review of its international offices, which concluded that "the rationale for London to have offices in key emerging markets is fundamentally sound".

The London of Chamber of Commerce and Industry told the review: "Closing the offices in India and China as part of a cost-cutting exercise would be short-sighted and send entirely the wrong signals to potential investors and importers in two of London's most important potential markets."