Osborne to press case for Typhoon in India

George Osborne is to tell the Indian government that its decision not to choose the BAE-backed Typhoon Euro­fighter as its new strike plane is a mistake as the Typhoon is a more cost-effective option.

By Kamal Ahmed, and Richard Blackden

9:30PM BST 31 Mar 2012

http://www.telegraph.co.uk/news/uknews/defence/9178384/Osborne-to-press-case-for-Typhoon-in-India.html

In a trip to India this week, the Chancellor will say that the Eurofighter is superior militarily and is therefore a “better deal” for the country. Earlier this year, India announced that it had chosen France’s Dassault as the preferred bidder to fulfil the $11bn (£7bn) contract.

Ian King, the chief executive of BAE has since said that it was consulting with its Eurofighter partners in Italy and Germany to see if cost reductions were possible.

Mr Osborne is also likely to raise India’s tax policies after the government announced on Friday that foreign investors in India such as Vodafone, Kraft and SAB Miller could be forced to pay billions of pounds in capital gains tax on deals stretching back to 1962.

Mr Osborne will stress that consistent tax policy between two trading partners is vital to maintain good relations. The Indian government’s decision looks likely to overturn a successful Vodafone legal challenge in the Indian supreme court to a $2.2bn (£1.38bn) tax bill relating to its takeover of Hutchison Whampoa’s Indian mobile phone unit.

Mr Osborne may also discuss the next leader of the World Bank. The UK is expected to throw its weight behind the American candidate, despite pressure from emerging market nations that the US should loosen its grip on the job.

Whitehall sources confirmed that the UK approach would be “traditional”. In return for US support for a European to lead the International Monetary Fund (France’s Christine Lagarde), Britain would back a US head of the World Bank.

José Antonio Ocampo, the former Colombian finance minister and one of the three candidates vying for the job, expects the UK Government to back its “historical ally”, which has nominated public health expert Dr Jim Yong Kim.

Mr Ocampo told The Sunday Telegraph that he believes he can win the support of other advanced economies in the race to succeed Robert Zoellick as president of the World Bank in June.

“There are some key countries that matter” in the race, said Mr Ocampo. “Some developed countries might be interesting.”

Mr Ocampo and the third can­didate, Nigerian finance min­ister Ngozi Okonjo-Iweala, will be hoping to win the backing of emer­ging economies keen to break the Western stranglehold on two of the world’s key multi-lateral ­institutions.

America’s position as the biggest donor to the World Bank still makes Dr Kim the favourite, but analysts say that President Barack Obama’s decision to pick someone with a focus on public health — just one strand of development work — makes the race potentially a lot closer.