London: Wishing Prime Minister-designate Manmohan Singh all success in the challenges ahead, Britain has said that India's pluralist democracy is a role model for its neighbours and partners in South Asia.

"No one can fail to be impressed by the power of a democracy where over 380 million people can bring about a peaceful transfer of power through the ballot box. India's pluralist democracy is a role model for her neighbours and partners in South Asia," Foreign Secretary Jack Straw said.

"And all of us in the British Government wish the incoming Indian United Progressive Alliance Government which will be led by architect of India's economic reforms, Manmohan Singh, every success in the challenge ahead," he said at the Commonwealth Business Council last night.

Referring to the challenges facing the new Government in India, Straw said, "I certainly don't underestimate those challenges, both for India and for Governments and people across the region. It is vital, not least, that the leaders of India and Pakistan continue to show vision and courage to keep the composite dialogue on track in the coming months. There are other political and security challenges too, such as in Nepal.

"But there is also today a great opportunity in South Asia to create a virtuous circle of security and prosperity. Greater security can encourage businesses to invest for the long term; and the greater the prosperity which business generates can in turn reinforce regional security. If such a virtuous circle can be created, South Asia's potential as a region will be huge."

Straw, who recalled his visit to India in February, said, "Some time between 2020 and 2030, India will become the world's third or fourth largest economy - according to Goldman Sachs, it will overtake Britain in 2016."

He said, "Each year, India's vibrant middle class is growing by a number equivalent to the population of Australia; and two million new Indian mobile phone subscribers are added every month. All this is underpinned by an education system, which produces three million new graduates every year, and a culture, which allows creativity to thrive.

"That economic success is changing the nature of Britain's relationship with India. Ours is becoming a truly two-way partnership. Indeed, India is now the eighth-largest investor in Britain, with three-quarters of that investment going to the knowledge-based sector.

Sixty per cent of Indian investment in Europe comes here, and it has created over 1,100 jobs over the last three years. At least two thirds of the software professionals who come here from abroad are from India."

He said Britain would continue to argue that Indian companies and Indian consumers would benefit if British firms were allowed greater access to the Indian market - especially in the sectors where its firms are world-beating, such as banking, accounting, legal services and insurance.