British PM David Cameron begins India trade trip as graft scandal erupts (+video)

British Prime Minister David Cameron flew into India on Monday promising to try to revive Indian interest in the Eurofighter even though New Delhi has chosen a French-made rival and as a graft scandal is engulfing an Anglo-Italian helicopter deal.

Making his second visit to India as prime minister, Cameron's trip comes days after a similar trade mission by French President Francois Hollande, underlining how Europe's debt-stricken states are competing to tap into one of the world's fastest-growing economies.

Cameron's delegation, which includes representatives of more than 100 companies, is the biggest taken abroad by a British premier and includes four ministers and nine MPs.

But the timing of the trip is not ideal. India said on Friday it wanted to cancel a $750 million deal for a dozen helicopters made by AgustaWestland, the Anglo-Italian subsidiary of Italy's Finmeccanica, over bribery claims.

That will not make Cameron's job of persuading India to buy more civil and military hardware easier, and Indian officials have told the local press they intend to press Cameron for "a fully-fledged report" on what Britain knows about the scandal.

Britain has said it wants to wait until the end of the Italian investigation before commenting in full, but has given India an interim report on the subject.

"This is something for the Italian and Indian authorities to deal with and I'm sure they will," Cameron told reporters on Monday, saying issues had been raised that needed to be settled.

Cameron said he would tell the Indian government that the Eurofighter jet, which is partly built in Britain, remains an attractive option if India decides to review a multi-billion dollar deal to buy 126 French-made Rafale fighters. New Delhi rejected the Eurofighter last year.

"(Eurofighter) Typhoon is a superior aircraft," he said, adding that the consortium that built it had said it would "look again" at the price. Such a deal could involve technology transfer and industrial participation, he said. "I will make clear the Typhoon is still available."

A British government source said on Friday that London had noted that Hollande hadn't finalized the Rafale fighter jet deal during his own trip.

'Leading partner'

Cameron told his hosts they should open up their economy because Britain had done the same for Indian firms. He said he was proud of the fact that Indian companies like Tata group, the owner Jaguar Land Rover, had such a strong foothold in the British economy, but said he expected a reciprocal arrangement.

"Britain is an open economy and we encourage that investment," he said. "I think, in return, we should be having a conversation about opening up the Indian economy, making it easier to do business here, allowing insurance and banking companies to do more foreign direct investment."

India still had outdated rules and regulations, Cameron complained.

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