India – UK Relations

Areas  of Strength

  • Deeply interconnected historical legacy,
  • Cultural bonds bridging centuries,
  • A prominent Indian diaspora numbering 2 million – 2nd largest diaspora in UK.
  • Strong educational ties – India is 2nd largest source of foreign students to UK.
  • $15.8 billion in trade in favor of India,
  • Strong economic relationship with major investments on both sides.
  • Bilateral relations upgraded to Strategic Partnership in 2004.
  • Civil Nuclear Agreement, signed in 2015.
  • UK supports India’s bid for UNSC seat.
  • Institutionalized dialogues – Economic and Financial Dialogue (EFD), Joint Economic and Trade Committee (JETCO), UK-India Business Council, etc

Weakness

  • Defense relationship – UK lags behind Russia, USA, Israel and esp. France.
  • Declining number of Indian students in British universities.
  • Bilateral trade only up to $16 billion.

Opportunities

What UK offer to India –

  • Infrastructure investments and projects – India needs $1 trillion of investment in Infra as well as high end technology in railways, road, ports, airports, etc.
  • Joint educational collaborations in higher education, R & D, Vocational skills education, teachers’ training, etc. UK’s universities are held in high regard by Indians. India will have  40–45 million college-ready students by 2020, with  a target of 30% GER from present 15%.
  • Development of renewable sources of energy such as solar, wind, nuclear – finance, technology. India targets 175 GW of renewable energy by 2022.
  • Cyber security
  • Counter-terrorism measures
  • Joint defense production and development
  • London as the world’s leading financial center can become India’s gateway to EU and global finances.

What India can offer to UK –

  • UK is in search of its own Silicon Valley. It can avail famous Indian IT and engineering talent pool.
  • India can become low cost manufacturing hub for British exports to rest of the world.
  • India is an emerging market with much to offer in every possible product and services in every possible field. India’s new initiatives such as Smart Cities, Make in India, Digital India, Economic reforms present good opportunity for British to capture. The positive perception of British in India is strong launching factor in favor of British firms.

Threats to partnership

  • Competition from UK’s peers such as US, France, Germany, Australia, Israel, Canada, Singapore,  etc.
  • UK support to Pakistan on issues such as Kashmir, state-sponsored terrorism.
  • Inadequate infrastructure, cumbersome regulation and slow paced economic reforms in India – Ease of Doing Business in India being too low.
  • Opening up by UK on Visa regulations, educational costs and other conditions as a part of measures to curb immigration to UK.
  • Britain’s fading international, technological and cultural clout.
  • No direct security threat from each other.

For detail analysis read  Taking India – UK relationship to fast track – KPMG report, 2013

There has been “an escalation in the awareness and interest in India”, and that ‘British business has definitely woken up to India’, with the desire to put ‘special’ back in UK – India relationship. This can be seen from following reports as well as successively 3 relentless visits by British PM David Cameron to India between 2010 to 2013.

Waking up to India – A House of Commons report 2007

India Matters report by British Council in 2014

Re-Imagine: India-UK Cultural Relations in the 21st Century – British Council, 2013

 

 

 

Modi’s UK Visit in November 2015 – Major takeaways:

The Diplomat, Nov 2015.

  • Modi and his counterpart, David Cameron, issued a joint statement on their “global partnership.”
  • Additionally, Modi and Cameron issued a joint statement (PDF) outlining a range of agreements between the two countries, specifically on the issue of climate change.
  • Modi also addressed the British parliament, becoming the first Indian head of government to do so.
  • The headlining deal of Modi’s state visit is an agreement on increasing bilateral cooperation on civil nuclear cooperation, finalizing a 2010 bilateral agreement.
  • Cameron re-iterated UK’s support to India’s UNSC candidature.
  • On the economic side of the visit, the two prime ministers agreed to around $13.7 billion in deals. In 2014-15 India emerged as Britain’s third biggest job creator, creating 7,730 new jobs, with investments from India increasing by 65 percent.” Also among G20 members, the U.K. is the largest investor in India.
  • On the security front, Cameron and Modi discussed a range of regional and global issues. They expressed their “shared commitment and support” for a “stable, secure and successful future for a sovereign, democratic and united Afghanistan.” They “stressed the need for inclusive political settlements in Syria and Iraq.” Additionally, Modi and Cameron “reiterated their call for Pakistan to bring the perpetrators of the November 2008 terrorist attack in Mumbai to justice.” The Modi-Cameron joint statement also discusses the need for an inclusive constitution in Nepal, international support for the Iran nuclear deal, and “full implementation of the Minsk measures by all parties” with regard to the Ukraine crisis.
  • The India-U.K. joint statement made no reference to freedom of navigation and overflight in the South China Sea nor did any defense deal/agreement was signed between two countries.
  • Cameron re-iterated on the need to make UK as India’s ‘Partner of Choice’. While India referred to UK as India’s gateway to European Union. Indirectly India also supported UK’s EU membership in face of 2017 vote on ‘Brexit’ from EU.

Read further in Takeaways from Modi’s UK visit – The Diplomat, 2015

Britain needs to boost ties with India – The Diplomat, 2015

Britain – India : from courted to courtier – The diplomat, 2015

 

Ties between Britain and India

How great?

The Economist, 2013

IN INDIA this week, for his second time as Britain’s prime minister, David Cameron argued gamely that a “great relationship” could be formed between the rising power and its former colonial ruler. He is right to try. Both countries would gain from more open trade and closer educational, cultural and other ties, even if (as my colleague, Bagehot, wrote in this week’s issue) Britain increasingly looks like a supplicant to a more powerful India.

Britain’s interests are obvious. The country needs more export markets and hopes especially to tap into Asia’s higher rates of economic growth, while also forging a closer diplomatic and security relationship. Mr Cameron is frank about that: he travels with a big trade delegation. The cooing over meetings with Ratan Tata and other Indian businessmen in Mumbai will probably turn out to matter as much as, or more than, any political meetings in Delhi.

Yet talk of an especially close bond with Britain does not really ring true in India. Of course Britain has much to offer—investment, technology, university excellence, links to 1.5m people of Indian origin in the British Isles and so on. But important foreigners turn up in India with steady regularity, each claiming some special link to the subcontinent. Last week it was the turn of France’s president, Francois Hollande. The local press made much of the fact that he was in India before having visited China. The pomp and enthusiasm were accompanied by details of valuable commercial ties in defence, space technology and nuclear power.

How can Britain—a small island on the edge of a continent of diminishing global clout—hope to stand out from the crowd? It could perhaps try to atone for historic wrongs. One British columnist argues this week that an apology for old crimes and the ill-treatment of ordinary people in India—the arrests and massacres of those who demanded democracy and independence, the man-made famines and economic exploitation—is essential. Morally, he is right. Practically, however, it may make little difference to the relationship.

Many Indians care relatively little about history. After all, if India shunned countries with whom it had had an antagonistic or bitter past there would be no talk now of freer trade with Pakistan. China, which invaded and humiliated India as recently as 1962, would not be such a big trading partner. And since America and India were, in effect, on opposite sides in the cold war, there would be little scope for happy relations now. The British-Indian history, too, is mixed. For example this correspondent was in Nagaland earlier this month, at the impressive war cemetery in Kohima, where Indian and British soldiers are commemorated together for their efforts against invading Japanese soldiers in the second world war.

Mr Cameron talks of ties “of history, language, culture”. But sit down with the most senior Indian diplomatic staff and they judge countries by a harder measure: what does Britain offer India today. A high-ranking civil servant bats away a suggestion that historic links would help make Britain (to use Mr Cameron’s phrase) India’s “partner of choice”. He points instead to high levels of German investment; Japanese state-backed projects such as the Delhi-Mumbai industrial corridor; or the rush of Korean firms into India. France, in particular, enjoys credit for its political support from the time when India became an openly nuclear power in the late 1990s (when Britain was unwelcoming). He talks, too, of Britain having “a tendency to be soft on Pakistan”, because of intelligence links between spooks in Islamabad and London.

A problem for British diplomats and politicians, too, is that British firms usually operate without state subsidies and are guided not by governments but by their own ideas of where to search for profits. For example Britain—unlike, say, Japan—does not offer soft loans to encourage its firms to get into India. Thus while Mr Cameron talks hopefully of Britain supporting a newly conceived industrial corridor from Mumbai to Bangalore, the Indian government is sniffy, saying that since British aid is about to be scrapped there is no scope for British funds to help get such a scheme moving.

More like the Japanese, the French government encourages its state-backed nuclear firm to develop business in civil-nuclear power, despite an Indian law that puts full liability in the case of an accident on the foreign investor. By contrast, entirely private investors without such government support, notably American ones, say the liability law imposes too great a risk.

Does all that leave Britain out in the cold? Not really. Measure the past dozen years or so, and Britain is still one of India’s biggest investors. If India liberalises its services more during a current round of reforms—perhaps opening up for more foreign investment into insurance and pensions—more British capital would flow again. And Britain is a big recipient of investment from India. Such private ties matter a lot and may prove more resilient than deals struck for diplomatic gain. And even the civil servants who doubt the idea of a “great” relationship with Britain concede that the shared use of English, London’s role as a financial centre, the large Indian diaspora and other soft ties all lend warmth and an air of importance to relations. A uniquely strong bond may be out of the question, but friendly ties are all but assured.

Ties between UK and India – The Economist, 2013

 

Ties that no longer bind

The Economist, 2013

… Happily, Mr Cameron, who is due to return to Delhi next week, does not bruise easily. Improving British-Indian relations remains one of his most important foreign-policy objectives. This is well judged. They were long neglected by his terror-fighting Labour predecessors. And Britain badly needs to boost its business with fast-growing emerging markets, India especially. Britain is India’s seventh biggest export market—after the Netherlands—and its 21st biggest source of imports. This is despite the two countries sharing a common law and language and aspects of culture. Britain also has 1.5 million subjects of Indian origin, representing its biggest ethnic-minority group. This shared inheritance should make Britain and India far closer, in trade and otherwise.

The main reason they are not is commercial. As India rapidly industrializes its most urgent need is for Western technology, such as German machine tools and French nuclear know-how. It would benefit from British services, too. By opening its financial sector to foreign investment, India could substantially boost its economic growth rate. Unfortunately, it is in no hurry to do so: the country’s financial, legal and retail sectors are all to varying degrees protected.

History also makes Indians resistant to British diplomatic charm. Resentment of the colonial period is one of the defining principles of modern Indian identity. Those who consider the historic ties between India and Britain to be special are therefore unlikely to view them positively. India’s foreign-policy gurus, for example, consider Britain biased towards Pakistan—just as, they argue, it was towards Indian Muslims in colonial times. Less well-educated or younger Indians (who learn little in school about Britain’s 200-year rule in India) have few feelings about Britain either way. On a rare visit to India, Tony Blair was asked in a television interview whether he acknowledged Britain’s responsibility for the seemingly inextinguishable conflict in Kashmir. The former prime minister, appearing momentarily nonplussed, stammered that the colonial era was now irrelevant. “Then why are you here?” many Indians would have wondered…

Read further Ties that no longer bind – The Economist, 2013

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