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Post Brexit, India Can Be UK's America To The East

05/09/2016 11:58

As in personal life, the need for an all-weather friend in the global polity can never be overstated in the scenario of one having to restart a journey away from the comfort zone - irrespective of the reasons behind the loss of the cosy corner.

The United Kingdom has always had the United States for every such possibility. But in the ever-changing global order, and amid diminishing global power, the UK - especially the post-Brexit UK - could do well to more such friends. Luckily, there is one significant one in the east - India, the jewel in the crown of the erstwhile British Raj.

As per a report released by UK's Department for International Trade on August 30, the US remained the biggest source of Foreign Direct Investment (FDI) in the 2015/16 financial year with 570 projects; followed by China with 156 projects.

India, significantly, retained its position as the third largest investor in Britain with 140 projects - out of a total of 2,213 projects in investments by a record 79 countries.

Simultaneously, UK is the largest G20 investor into India, contributing around 8% of India's FDI.

Mr. Liam Fox, UK's International Trade Secretary, on his visit to New Delhi and Mumbai, India's political and financial capitals, on August 30 said that Bilateral relationship between the UK and India has the potential to become a stronger partnership, particularly in trade and investment.

Speaking during his first visit to India since taking up his role, Mr. Fox said:

I wanted to come here early in my time as Secretary of State for International Trade to show how important the new government views our trade partnership with India. This partnership lies at the very heart of the strategic relationship between our two nations, a relationship that has never been more important than it is today.

Mr. Fox, apart from meeting leaders of India's leading industry bodies like the Confederation of Indian Industries (CII), also attended the soft launch of the India-UK TECH Summit. The UK is the country partner for the TECH Summit which showcases British expertise in innovation, technology, and skills to Indian businesses.

Importantly, the visit also served as a preparation for his visit to India later this year to attend the Joint Economic and Trade Committee (JETCO). Addressing the CII, he further said:


"The India-UK Tech Summit in November will be a further celebration of this partnership, where sector experts ranging from smart cities, healthcare, agri-tech and others will come together to boost trade, R&D as well as academic ties between the UK and India."

With his visit, where he also met India's Minister for Finance, Mr. Arun Jaitley, there is a renewed enthusiasm about the proposal for an India-U.K. Free Trade Agreement (FTA).

The UK currently has High Commission offices in New Delhi, Mumbai, Chennai and Kolkata and trade Offices in Bangalore, Hyderabad and Ahmedabad. The Department for International Development (DfID) works with the state governments of West Bengal, Andhra Pradesh, Madhya Pradesh and Orissa.

Aiding the trade bodies is the British Council, which has offices and libraries in eleven cities stretching from Thiruvananthapuram in the south of India to Chandigarh in the north and Ahmedabad in the west to Kolkata in the east.

The thrust on India is not misplaced. India is currently the third largest economy in the world (based on purchasing power parity) and is expected to become the second largest by 2050 when the economy would be 30 times the current size.

A British Council report late in 2015 says, "As its economy is transformed, its political, military and cultural power is also likely to increase, elevating India to a 21st Century superpower".

Former chairman of Goldman Sachs Asset Management and current Conservative government minister Mr. Jim O'Neill, the British economist who had coined the acronym BRICS, has often said that "India will soon be 'one of the biggest influences on the world'. It is looking for new partners in the global race. This represents a great opportunity for the UK".

The opportunity would, however, need to be actively tapped by the UK (and indeed by India). The British Council report advises the UK to "continue to up its game if it is to take advantage of India's rise".

Currently, Indians account for more than half of UK's total 93,935 skilled work visas granted, much ahead of the US, which accounted for around 11 percent.

As per a BBC report on the 'India UK Links', Indian companies are playing an increasingly important role in the UK economy. "Tata Group, for example, is one of the UK's largest manufacturing employers, with some 65,000 employees in the UK."

Nearly 1.5 million citizens of Indian origin make up the UK population, making it the largest ethnic minority group in the UK and the seventh greatest Indian diaspora in the world.

Half a million Indians tourists visit the UK every year, while nearly the same (400,000) Britons visit India.

Age-old overlap of culture, history, and language with India already give the UK a reliable foundation upon which future relations between the two nations can be permanently deepened. India's burgeoning English-speaking middles class offers the most friendly opening for the UK to become India's partner of choice for diplomatic, trade, cultural, and education relations. Before the Indian story is courted by other nations, those factors can add to the opportunity for the UK to make inroads into India's civil society, research, education, and the creative sector.

Most importantly, quite like the US, the Indo-UK partnership can rest assured on the very concrete edifice of both being thriving, liberal, and multi-cultural democracies. That means that the relationship cannot be marred by the whims and fancies of a closed system like, for example, that of China.

The need is for an open heart and active feet.

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