Issue

Context

A new parliamentary inquiry report in United Kingdom has said that the country is falling behind in the global race to engage with India because it has failed to adjust its strategy to fit India's enhanced influence and power on the world stage.

About

Background

• After independence, India advocated for non-alignment and decolonization, whereas United Kingdom allied with US during the cold War. Thus, initially, India and UK were at logger heads with each other, both politically and ideologically.
• But bilaterally, India – UK relations were good till the 1965 Indo – Pak War. After the war, the relations took a downturn due to UK’s stand on Pakistan. This deterioration of relations was continued till the end of Cold War.
• After the cold war, there has been a paradigmatic shift in the relations and a constant rise in the bilateral trade has been witness since then. In recent times, mergers have paved way for establishment of large conglomerates. Tata has purchased Corus and Jaguar.
• In 2004, the two nations concluded a Strategic Partnership Agreement while, since 1995, there has been a defence consultative group formed between the two.
• In November, 2015, Indian PM NarendraModi visited Britain for three days and newDefense and International Security Pact was agreed for curbing security concerns. A joint statement on Energy and Climate Change cooperation was made to ensure cooperation to reduce fossil fuels consumption and focus on clean energy.
• Then, the British PM Theresa May visited India in November, 2016. The visit is significant as May visited India at a time when Britain was struggling to execute the BREXIT (Britain Exit from EU)

Threads between United Kingdom and India

• Institutionalised dialogues: India and UK have a number of bilateral dialogue mechanisms in place, covering a wide spectrum of areas including political, trade, education, science & technology, defence etc.
• Trade: UK is among India’s major trading partners and during the year 2014-15, UK ranked 18th in the list of India’s top 25 trading partners. India’s main exports to the UK are garments and textiles, machinery and instruments, petroleum products, footwear and leather.
• Services: As per UK’s Office for National Statistics, India-UK bilateral trade in services in theyear 2014 amounted to approx. £2.5 billion.
• Investment: UK is the 3rd largest inward investor in India, after Mauritius, and Singapore with a cumulative equity investment of US $22.56 billion.
• Economic Dialogue: Bilateral mechanisms like India-UK Economic & Financial Dialogue (EFD) and India-UK Joint Economic and Trade Committee (JETCO) form the basis of institutional engagements between the two countries.
• Education: Education is an important plank of the India-UK bilateral relationship. Over the last 10 years, the relationship has grown substantially with the introduction of bilateral mechanisms such as the India-UK Education Forum UK-India Education and Research Initiative (UKIERI).
• Indian Students: UK has traditionally been a favourite destination for international students. At present, there are approximately 20,000 Indian students pursuing Undergraduate and Postgraduate courses in the UK.
• Cultural Linkages: Cultural linkages between India and UK are deep and extensive, arising out of shared history between the two countries. There has been a gradual mainstreaming of Indian culture and absorption of Indian cuisine, cinema, languages, religion, philosophy, performing arts, etc.
• Indian Diaspora: The India Diaspora in UK is one of the largest ethnic minority communities in the country, with the 2011 census recording approximately 1.5 million people of Indian origin in the UK equating to almost 1.8 percent of the population and contributing 6% of the country’s GDP.
• Geopolitical Significance - The Indian Ocean is identified as a vital arena for closer defence and security cooperation between the two countries. Further, India needs UK’s support on international fora for its aim to have a permanent seat in UNSC and full membership of NSG.

Analysis

Issues affecting bilateral relations and their Impact

BREXIT –

• Impact on Diaspora - Many members of Indian Diaspora in Britain had voted against BREXIT because it is likely that Indian IT Professional in Britain will face tough competition when UK will open up its border for more skilled migration.
• Impact on Indian Companies in UK - A hard Brexit would inevitably impact more than 800 Indian companies in UK in crucial sectors of British economy Indian. But data has shown that companies are increasing investments in the UK and creating many thousands of new jobs. This demonstrates that, Brexit or no Brexit, India supports Britain.
• Impact on India-EU Relations - With €72.5 billion worth of India-EU trade and €19.4 billion of India UK trade at stake, all partners needed to think through this issue carefully in the business and commercial context. Brexit seems to be a challenge to the India EU strategic partnership but India would need to learn to manage its relations with the EU without UK
• Impact on Trade–Forging a Free Trade Agreement with India will not be a priority for UK as it leaves EU. Instead, Britain would initially focus on tackling existing barriers to trade. But India should grab the opportunity to fill the trade gap in UK, post-Brexit.

Visas and Immigration

• Illegal Migration: There are more than 1 lakh illegal Indian immigrants in UK. Britain has started putting pressure on Indian government to ensure that Indians who have no right to remain in UK be sent back to India
• Latest Measures:On the other hand, a white paper on post-Brexit visas and immigration strategy has been unveiled. It is expected to benefit Indian students and professionals, with a focus on skills rather than country of origin. An annual cap of 20,700 on the number of skilled work visas issued will also be removed.

Britain’s relationship with Pakistan - The UK’s ties with Pakistan complicate the process of building a closer defence and security relationship with India. Some Indian observers view the UK as overly sympathetic to Pakistan

Britain’s Relationship with China - The Parliamentary Inquiry Report highlights that India seems to face tougher Visa norms as compared to a non – democratic country like China. The UK should take care to ensure that stronger ties with China are not at the expense of a deeper partnership with India.

JallianwalaBagh massacre - UK government's failure to formally apologise for the JallianwalaBagh massacre during the British Raj in time for its 100th anniversary in April this year as an "important symbolic opportunity" which was missed.

Way Forward

• As the UK prepares to leave the EU, it is time to reset this relationship. Both the countries cannot afford to be complacent or rely on historical connections to deliver a modern partnership.
• Britain could further its relationship with India including through security and defence cooperation, joint exercises of the armed forces, and working with India to achieve reform at international bodies such as the UN and WTO.Trade, security, a shared commitment to the rules-based international system — these are all factors in our growing and evolving partnership.

Learning Aid

Practice Question:

Discuss the impact of BREXIT on the bilateral relations of India and United Kingdom.