Britain yesterday launched a new push into India as Digby Jones, the trade and investment minister, urged the Indian government to dismantle more bureaucratic barriers to entry for the bilateral relationship to flourish.

With a war chest of £1 million a year, against a previous budget of £75,000, the UK India Business Council - renamed and with a new chief executive - is tasked to improve opportunities for British companies in the world's fastest growing economy after China as well as attracting inward investment.

India is reporting annual GDP growth of more than 9 per cent and is becoming an increasingly active investor in Britain, but it still accounts for just 1 per cent of UK exports.

Lord Jones of Birmingham, on his first mission since his appointment by Prime Minister Gordon Brown to promote ‘brand Britain’ globally, said the opportunities for UK companies were still severely curtailed.

He cited the "ridiculous" rule that allows only 12 branch licences to be issued each year in India to the entire foreign banking industry.

"One British bank said it would open 100 branches in rural India, which would get more low income people engaged in banking, and applied for permission months ago," he said. "They haven't heard anything."

After a four-day visit taking in Delhi, Chandigarh, Poona and Bombay, Lord Jones said many British companies he had talked to, in the oil and gas sector in particular, had an inclination "not to bother" pitching for contracts in India.

"They're saying the issuing of the licence is fine but allowing them to implement it is taking an absolute age," he said.

Lord Jones lobbied H R Bhardwaj, India's law minister, to speed the liberalisation of the legal and financial services sector - a potential reform that is being used by Kamal Nath, India's commerce minister, as a bargaining chip in protracted trade talks to force global blocs including Europe to drop distorting agricultural subsidies.

The opening of the "value-added" services sector to foreign investment would help British companies in their bid to be part of India's $350bn infrastructure upgrade.

The UK India Business Council was previously called the Indo-British Partnership. Its chief executive is Sharon Bamford, formerly chief executive of the Scottish Institute for Enterprise.

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