India-UK Relations

• India and the UK share history, language, culture and values, which gives the UK a great potential advantage over other countries when it comes to assisting in, and benefiting from, India’s rise as a world power.
• Cultural, educational and people-to people connections are particular areas of opportunity to achieve a mutually valuable relationship for the future.
• As the world changed in the early 1990s, India changed and adapted to suit the new realities. The UK realized the importance and opportunities India can offer. Hence, cooperation and enthusiasm to strengthen the bilateral relations achieved new thrust.
• Ever since, relations seem to be constantly evolving with a deepening cooperation, growing bilateral trade and well-connected markets. From perspective of the UK, India has transformed from a developing nation to a great economic and political power.
• Recent efforts to strengthen military cooperation and to deepen relations in the field of defence and security have added another component to the bilateral relations between India and the UK, enriching the partnership between the two with a real strategic dimension.
• The visit by Prime Minister of India in 2015 and of UK in 2016 has given momentum to relationship.

Areas of Cooperation b/w India-UK Relations

The relationship between India and United Kingdom can be broadly categorized under- Political, Economic , Science & Technology, Defence and Diaspora.

Political

• Indian political system has been greatly influenced by the UK. The Parliamentary government, Cabinet system, bicameralism, etc. in the Indian constitution have been directly taken from Britain. Apart from them, the democratic values firmly bind the world’s oldest democracy and world’s largest democracy.
• India regards the UK as an important partner in the international diplomacy. The UK is a permanent member (of UNSC) and supports India’s bid for a permanent seat on the UN Security Council as well as for membership of NSG. They also share a similar opinion on a variety of global issues such as – rule of law, democratic values, tolerance and respect for human rights.
• The Commonwealth is also an area of engagement, supporting economic growth through technical assistance and scholarship to Indian students.
• In 2004, the bilateral relations between the two have been elevated to the strategic level. Since then they have adopted a joint declaration titled ‘India-UK towards a new and dynamic partnership’, where they conceived annual Summits and regular meetings of Foreign Ministers.
  • In 2010, the relations were elevated to ‘Enhanced Partnership for the Future’.
• It also envisages areas for future cooperation in defence, joint military exercises, sharing antiterrorism intelligence and strategies, space, education, trade and commerce, science and technology and cultural exchanges.
• UK’s aid and assistance to India is one among the highest. It primarily focuses on poverty reduction, women empowerment, technological developments, infrastructure development, etc. thus, helping India in the most critical areas of development.
• Despite the challenge posed by the Ukraine crisis, the India-UK relationship has been on an upward trajectory, exemplified by the conclusion of a Comprehensive Strategic Partnership in 2021.
  • The agreement also established a 2030 Roadmap for India-UK relations, which primarily outlines the partnership plans for the bilateral relationship.

Bilateral Institutional Engagements include:

• The India-UK Foreign Office Consultations provide an opportunity to review the entire range of bilateral relations, including political, economic, commercial, scientific, regional and international cooperation
• The India-UK Disarmament and Non-Proliferation Dialogue discusses issues such as NPT, Civil Nuclear Cooperation, INF & New START, CWC & BWC, JCPOA, Gulf, DPRK, China, Pakistan and Export License
• The India-UK JWG on Counter Terrorism condemns terrorism in all its forms and manifestations, exchanges views on threats posed by globally proscribed terrorist entities, reaffirms to work together
• In addition, India and UK also regularly meet under the UN Dialogue, Policy Planning Dialogue, Strategic Dialogue, Cyber Dialogue and Home Affairs Dialogue to discuss cooperation in specific sectoral areas

Defence

• After Independence from the British Raj in 1947, India embarked on its own foreign and national defence policy that was characterized by the Non-Aligned Movement (NAM).
  • With the colonial experience fresh in their minds, India’s policymakers chose this approach to not get caught between the great powers in their cold war.
• After the end of the Cold War, the two countries entered into a strategic partnership in 2004.
  • Annual summits and meetings between heads of government and foreign ministers were envisaged, as was cooperation in the areas of combating terrorism, civil nuclear activities, and civil space programs, amongst others.
• UK is an important partner for fostering peace and security in the world. Both face similar kind of security threats and challenges (terrorism, extremism).
• Therefore, they have reaffirmed and strengthened Defence cooperation, with capacity building, technology development & transfers, joint military exercises (Ajeya Warrior-Army; Konkan-Naval; Indradhanush Force), intelligence sharing, etc. at its core.
• India considers the defence sector as one of the major areas where the bilateral partnership could be expanded around the ‘Make in India’ campaign.
• Around 70 defence related companies across the UK supply various goods for aircraft/helicopter manufacturing/overhaul at HAL like ejection seats, fuel tank kits, hydraulic pumps, engine spares etc and support legacy platforms like Jaguar, Mirage & Kiran
• During Indian PM visit in 2015, the two sides agreed to move towards “a new Defence and International Security Partnership” that would intensify cooperation on defence and security, including cyber security, and maritime security pushing for joint working in key strategic areas.
• Maritime cooperation is another area where engagement is increasing. UK is deploying Carrier Strike Group in Indian Ocean region this year in line with its strategic tilt to Indo-Pacific.

Nuclear Cooperation

• Both nations, have signed a Civil Nuclear Cooperation Declaration in 2010 which will help promotion and facilitation of cooperation in the nuclear field including nuclear trade and also between the scientific institutions of the two countries.
• Further, In 2015, the UK and Indian Prime Ministers signed a Nuclear Collaboration Agreement between the two countries as part of a comprehensive package of collaboration on energy and climate change, that amounts to a total of 3.2 billion pounds worth of commercial deals between the UK and India, including joint research programmes and initiatives to share technical, scientific, and financial and policy expertise.

Terrorism and Extremism

• Threat of terrorism has been a major agenda in India’s relation with the UK.
• Threats from ISIS, fundamentalist forces, lone wolf attacks, state-sponsored terrorism, etc have been disturbing the peace and harmony in both the countries.
• Terror attacks in Mumbai and London underline the importance of cooperation in defence and security.
• Both countries are jointly pushing for the UN Comprehensive Convention on International Terrorism (CCIT), and strengthening strategic cooperation and intelligence-sharing through annual consultations.

Cyber Security

• The challenges from cyber space are increasing due to growing digital penetration in India.
• The threats to critical infrastructure like stock exchanges, hospital, nuclear power plants, etc. are increasing.
• MoU between CERT-ln and CERT-UK will promote closer cooperation between India and UK for exchange of knowledge and experience in detection, resolution and prevention of security-related incidents.
• The UK supports the Make in India initiative of the government of India, and is keen in helping India to develop its defence manufacturing capability through capacity building, transfer of technology, joint ventures and other collaborative arrangements.
  • This will help India become self-reliant and less dependent in terms of procurement of Defence equipment and technologies.

Economic

• As the UK has left the European Union, it has become all the more important than ever that it strengthens its relationship with India, one of the world’s fastest growing economies with a huge domestic market and largest middle-income population.
• The India-UK economic relations received a vibrant upward direction after the establishment of Joint Economic and Trade Committee (JETCO) in 2005 to tackle trade and investment barriers on both sides and promote business links.
• In January 2022, India and the UK concluded the first round of talks for an India–UK Free Trade Agreement.
  • The negotiations reflected shared ambitions to secure a comprehensive deal between the fifth (UK) and sixth (India) largest economies in the world.

Bilateral Trade

• There has been a significant increase in India-UK bilateral trade from early 2000s. However, there is enough scope for improvement considering the trade potential between the two countries.
• In 2021, total trade between India and UK amounted to USD 13.11 Billion.
• As of 2021, India is UK’s 15th largest trading partner, and the UK is India’s 18th largest trading partner with manufacturing exports accounting for over 90 percent of India’s export to the UK, consisting of clothing, medicinal and pharmaceutical products, metal manufacturers, organic chemicals, and precious stones
• India’s major exports to the UK are– cotton, readymade garments and textiles, transport equipment, spices, ores and minerals, manufactures of metals, machinery and instruments, drugs & pharmaceuticals and marine products.
• The main imports from the UK to India are ores and metal scraps, pearls & semi precious stones, professional instruments other than electronics, non-ferrous metals, chemicals and machinery.
• Trade between India and the UK in services has been at a lower level than trade in goods but has been growing rapidly since 2003.
• Many British blue chip companies have outsourced work to India creating many jobs.

Investments

• India was the third largest investor in the UK. India invests more in the UK than in the rest of the EU combined. On the other hand, the UK is the largest G20 investor in India.
  • As per DIPP report, the FDI inflows from UK between April 2000 to December 2017 stood at USD 25.31 billion, accounting for 6.88% of the total FDI inflow during the period.
• On the financial market front, the FTSE SBI Bond Index Series was launched, supporting the development of India’s growing corporate bond market.
• India and the UK announced the launch of an Early Market Engagement for the joint UK-India Fund, namely a Green Growth Equity Fund which aims to leverage private sector investment to invest in green infrastructure projects in India.
• Around $ 3 billion of rupee-denominated bonds have been issued in 2017, of which $2 billion is listed in London. This will help establish London as the leading global center for offshore rupee finance.
• Access India Programme (AIP) is launched by the Indian High Commission in the UK along with knowledge partner UK India Business Council (UKIBC), which will work as a market entry support system for smaller companies with a potential to expand into the Indian market.
• Institutionalised mechanisms between India and UK in economic relations are:
  • Establishment of Joint Working Group, reporting to JETCO (joint economic and trade commission headed by the trade ministers of the two countries)
  • There are partnerships undertaken between Indian and British companies to implement India’s flagship programmes like Smart Cities Mission, Make in India and Digital India, besides other priority areas like healthcare, infrastructure and skill development.

Steps Needed to Boost Investment Relationships

• Improving the operating environment in India will make the biggest difference in accelerating foreign direct investment (FDI).
• UK-India Business Council suggests that the focus areas can be as follows:
  • A reduction of corporate tax rates to the 25%.
  • A smooth and fair implementation of GST making ease of doing business better.
  • A simpler, fairer and more predictable tax regime
  • A medium and long-term clarity in areas of major government expenditure, for example defence, and on plans for infrastructure development.
• Apart from these, huge potential for collaboration between India and Britain exists in the following sectors Health, especially in the medical sciences, Education and research, Infrastructure, Renewable Energy, Skills, IT and Tourism.

Education

• This started with the signing of the Science and Technology Agreement in 1996.
  • In 2006, a new orientation was given to S&T Cooperation with setting up of the ‘Science and Innovation Council’ which is the main framework within which India-UK Science & Technology cooperation operates.
• During the 2010 UK-India Summit, the Prime Minister of the United Kingdom and India came into agreement to support education, by implementing the India Education and Research Initiative (UKIERI).
• UK is among the favoured destinations for Indian students to pursue higher education.
  • Around 50000 Indian students are currently studying in UK.
• Also, UK identifies India as a key development partner. Further, the two sides are discussing Global Innovation Programme, which will support Indian sustainable innovations to be scaled up and transferred to select developing countries.

Climate and Environment

• India and UK closely engage on climate related issues through various mechanisms including the Ministerial Energy Dialogue and Joint Working Groups on Climate, Power and Renewables.
• India-UK Green Growth Equity Fund is mobilising institutional investments in the renewable energy, waste management, electric mobility and environment sub-sectors in India.

Health

• Health sector collaboration is a key element of India-UK Strategic Partnership. The Joint Working Group on Health and Life Sciences regularly meets to prioritise and coordinate bilateral cooperation in the health sector.
• The successful partnership between Oxford University, AstraZeneca and Serum Institute of India on Covid19 vaccine demonstrated the potential of Indian and UK expertise working together to solve international challenges.
• The two sides are also working on pandemic preparedness, Antimicrobial Resistance (AMR), Zoonotic research, non-communicable diseases, digital health, Ayurveda and alternate medicines, as well as health worker mobility.
• During the visit of Indian PM to UK, they launched the ‘Ayuryoga’ programme in November 2020 and started online modules to raise awareness and practise of Ayurveda and Yoga in UK.

Culture

• India and UK signed a Memorandum of Understanding on Cultural Cooperation in 2010.
• The Nehru Centre (TNC), established in 1992 in London, is the cultural outreach of the High Commission of India in UK.
  • The Centre organises a wide range of cultural functions at its premises.
• Also, Of Britain’s population of 62.3 million, the population of Indian origin is estimated to be around 1.8 – 2 million, accounting for the single largest segment of ethnic population.
• The Queen of England hosted the official launch of the UK India Year of Culture in 2017 at Buckingham Palace with Indian Finance Minister.

People to People Contact

• The Indian Diaspora in UK is one of the largest ethnic minority communities in the country. They have a major influence in elections and policies (especially regarding India) in the UK.
• One of the largest Indian student communities is in the UK, with many pursuing education mostly in the fields of medical, engineering and management adding high talent, value and efficiency in its workforce. Cricket, Indian cuisine, Yoga and festivals bring the people of both countries together.
• In terms of tourism, Indians regard the UK as one of their favorite destinations across the world.

Significance of Britain to India

• The UK is a regional power in the Indo-Pacific as it possesses naval facilities in Oman, Singapore, Bahrain, Kenya, and British Indian Ocean Territory.
• In today’s global world with ever-changing geopolitical equations, India needs a trusted partner like that of the UK. Its support is critical for different ambitious objectives that India aims to achieve (UNSC seat and NSG entry).
• UK being the second largest G-20 investor, provides India with much needed foreign capital, especially in
  the field of technological advancement, manufacturing , services & IT, renewable energy and Defence.
• The UK has an advanced Defence equipment production and nuclear technology. It will play an important role in diversifying the Defence purchase requirement of India by supporting transfer of technology and capacity building, helping India become self-reliant in manufacturing Defence related equipment.
• India is currently undergoing a transformation in various sectors; for example building smart cities, encouraging firms to make in India, getting the country online with digital India, delivering better healthcare, infrastructure, skills and finance, developing clean and renewable energy, Swaccha Bharat, river clean Ganga mission, etc. The UK with their world-class architects, lawyers, financiers, engineers, doctors, academicians and tech experts can become an ideal partner and help India to achieve the aforesaid mentioned initiatives.
• London remains the key global center for finance. Raising cheap debt and equity for investment and development in India is one area the UK will play a very big role. The Masala Bonds which are denominated in Indian Rupee was launched in London. This money can flow into development activities and other investable areas in India.
• The UK has very wide and specialized security network and system. Cooperation with the UK can prove to be very effective for India in countering terrorism, insurgency and fighting disaster management.

Significance of India to Britain

• Britain is repositioning itself in the world after Brexit and seeks to rejuvenate Commonwealth. India’s contribution is crucial to achieve this. As the soon-to be largest economy in the forum, India can significantly increase its levels of economic assistance, give more to the maintenance of the Secretariat, boost the current efforts on capacity building, and open its economy to facilitate trade liberalization across the Commonwealth.
• For Britain, a successful conclusion of an FTA with India would provide a boost to its ‘Global Britain’ ambitions as the UK has sought to expand its markets beyond Europe since Brexit.
• Britain has been trying to seize opportunities in the growing economies of the Indo-Pacific to cement its place on the global stage as a serious global actor.
  • The British would be better able to achieve this goal with good bilateral relations with India.
• India is the third largest investor in the UK and the second largest international job creator with Indian companies creating over 110,000 jobs in the UK. India invests more in the UK than in the rest of the EU combined. In the event of the UK leaving EU; cooperation and strong ties with India become all the more important in the UK’s agenda.
• India’s massive young workforce can be a solution to UK’s aging population and manpower. India can provide skilled manpower at low cost.
• UK’s economic growth rate and snail-like recovery still has not eased fears of a double-dip recession, while Indian growth is expected to push on from average 7%.
• India’s demographic dividend and huge pool of professionals are beneficial for the UK.
  • Many Indian students are pursuing various professional studies like Engineering, Management and Medical courses in universities of the UK.
  • The UK being an industrially advanced and developed country has much opportunity to benefit from the pool of Indian professionals.

Challenges in India-UK Relations

Apart from opportunities, the relationship between the countries also faces some challenges in areas like immigration, taxation, extradition, resolution of BTIA issues, etc.

Visa Issues

• India’s focus is not only on ways to increase trade in goods, but also on the expansion of services trade, including through greater mobility of skilled professionals.
• Britain announced changes in immigration rules – including higher salary thresholds – that are expected to affect Indian professionals and IT companies, particularly those using the Intra-Company Transfer (ICT) visa. Visa fees for Indian tourists, students, business travelers and academicians too are higher than for nationals of other countries like China.
• Following Brexit, Britain seeks to end the “freedom of movement once and for all” (a fundamental principle of the EU).
  • A new system will be introduced with even further restrictions on the ability of workers and their families to come to the U.K., requiring any family to be sponsored by the employer.
• Flow ever, it will be a skills-based system where it is workers’ skills that matter and not where they come from. This might benefit highly skilled Indian professional pool.

Retrospective Taxation

• Britain has raised the matter of existing tax disputes of Vodafone Group Pic. and Cairn India Ltd with the Indian government.
• UK demands expediting the arbitration process. Steps by Government of India like Insolvency and Bankruptcy Code is progressive in addressing these concerns.

Trade barriers

• While leaving the EU may mean that the UK can sign a bilateral trade agreement with India to remove some of these, a comprehensive deal is highly unlikely to be completed in the near future.
• India, which only has nine bilateral trade agreements—and none with a Western country—has made clear that it is not “in a rush” to make a deal with the UK, and that it would demand concessions on movement of people, which have been a sticking point for the UK in EU-India trade negotiations.

Extradition

• The issue is the extradition of Indian economic offenders who are presently seeking shelter in Britain and using the legal system to their advantage.
  • Offenders like Vijay Mallya, Nirav Modi and others have long taken shelter under the British system despite clear cut Indian cases against them which warrant extradition.
• India expects early extradition of industrialist Vijay Mallya from the UK to face probe in the money laundering case against him as the two countries agreed not to allow fugitives and criminals escape law and resolved to facilitate outstanding extradition requests.
• Former IPL Chairman Lalit Modi is also evading law in India and the talks may help Indian authorities to push for his early extradition as well.
• India has also asked Britain to hand over 57 wanted people, including Christian Michel, the alleged middleman in the Augusta Westland helicopter deal.

Umbilical link between the British and Pakistani Deep State

• This legacy of the long-gone British Raj in the sub-continent allows Britain to box in a higher weight category with the help of Pakistan on imperial follies of Jammu and Kashmir.
• The presence of a large Muslim community from the sub-continent in the UK, particularly from areas like Mirpur of Pakistan-occupied Kashmir adds to dissonance apart from the trap of vote bank politics.

Non-Acceptance of White Britain

• The unacceptance of white Britain particularly its media of the rise of India as a global power is another issue.
  • India under the current Prime Minister has left behind Britain as the fifth largest economy in GDP terms and is on the way up.
  • There is no difference between a modern and confident Indian and a British colonial Indian in terms of skin colour or the imperial legacy of the British Empire.

Influence of China

• Despite these shared interests, the UK and India have sometimes diverged in their positions towards China’s role in the Indian Ocean.
• India is concerned about China’s growing influence in the region, including its investments in ports through the Belt and Road infrastructure initiative (BRI).
• The UK, by contrast, has engaged substantially with Belt and Road. This risks feeding a perception in India that the UK has prioritised its relationship with China.

Colonial Prism

• Anti-colonial resentment against Britain is always seething barely below the surface among the Indian political and bureaucratic classes.
• Also, the bitter legacies of the Partition and Britain’s perceived tilt to Pakistan have long complicated the engagement between India and the UK.

Steps taken to Address the Challenges

• Immigration: “Frequent registered traveler scheme” for Indians travelling to Britain for business. Under the scheme, Indian nationals frequently visiting to the U.K. and contributing to growth in both countries will have a ‘significantly easier’ entry process including fewer forms to be filled, access to the EU-EEA passport controls, swifter passage through airports.
• Infrastructure: Both countries announced three UK-India city partnerships with Indore, Pune and Amaravati to support India’s ambitious urban development goals through technical assistance, expertise sharing and business engagement.
• River Cleaning: Both countries have launched a new Thames/Ganga partnership for healthy river systems. This partnership will consist of a collaborative programme of research and innovation to enable the sustainable management of water resources in the Ganga basin and a policy expert exchange in 2016 supported by the UK Water Partnership.

Conclusion

• Britain has always expressed its interest in making India a permanent member of UNSC which shows the depth of their relationship.
• India and the UK have emerged as strategic partner in today’s world. Their enhanced cooperation and collaboration in the field of defence, joint military exercises, counter terrorism intelligence & strategies, space, education, trade and commerce, science and technology cultural exchanges, etc. can help boost and deepen the ties into a real friendship which will ultimately benefit the people of the two countries.
• India needs to recognise the lack of harmony between different strands of the relationship. Long joint statements and unreachable ambition are not the answer. Arriving at common ground on issues troubling India should be the foremost concern. This relationship has had many beginnings. Just to stay in the game, we have to concede to geopolitics. Britain (post- Brexit) and India (with the China challenge) need partners. Given India’s difficulties amid the pandemic, Britain has early advantage. Hence, the need to bank on the profound ties of culture, history and language to further deepen relations between India and UK