Free Trade Zones

India-UK summit: a giant leap together

As the rubble of the Babri Mosque fell into the vacuum cleaner in Ayodhya, British Prime Minister John Major became the first foreign dignitary to visit India after the demolition. To the surprise and delight of his hosts in New Delhi, he praised India’s commitment to a “secular constitution and tolerance and protection of minorities” to the global media. The wise leader confirmed to the world that Kashmir is a bilateral issue to be resolved between India and Pakistan.

It was music to Prime Minister Rao’s ears then, and it would now be to Mr. Modi’s. By winning contracts and paving the way for British companies, Major has revealed a clever formula for dealing with New Delhi: Stay away from the minefield of domestic and regional politics if you mean business.

His current Conservative successor, Boris Johnson, who canceled Major’s membership in the European Union, appears to have learned the ropes. As UK Parliament assaulted Indian farm laws, led by opposition MPs Mr Johnson’s deputy minister for Asia Nigel Adams exonerated the Modi government by defending its right to action if the agitators “cross the line and become illegal”.

The Johnson administration, earlier trapped in the dumpster fire
Brexit now looks set for Global Britain’s second coming to the world stage with the announcement of its Integrated Foreign and Defense Policy Review.

With an apparent tilt towards Asia in his renewed international orientation, the British prime minister can hardly begin by upsetting New Delhi, his main partner in the Indo-Pacific region.

Imbued with such mercantilist pragmatism, Mr Johnson had to guard against the UK’s hitherto eternal bets. Despite historic and strong ties between the two countries, kept alive by the flow of capital, services and students, the charm of the UK has weakened over time. In trade with India, the UK has slipped to 14th position in 2019-2020 from the third prized position two decades ago. It has also lost its luster as one of the top destinations for Indian students to the benefit of countries like Australia and Canada, despite its top-notch academic and research institutions. No major British ammunition has been acquired over the past two decades, with the exception of 123 Hawk planes and locally co-produced howitzers, a very modest purchase compared to Russian, Israeli, American and French weapons. There are promising inquiries for air-to-air missiles and fighter jets, but remain delayed due to financial or technical issues. Unlike in the past, New Delhi no longer looks to London for critical acquisitions.

For India, Britain is not the main source of foreign direct investment either.

The “roadmap for 2030” adopted by the two prime ministers at their virtual meeting is a giant leap for both states – with the UK reclaiming its lost glory in Asia and India negotiating its rise with London. The Roadmap is the largest and most ambitious program agreed by the two countries to date. Trade, strategy, information sharing, climate change, mobility, research, infrastructure, nuclear, space… you can name it.

Making this agenda a reality would depend to a large extent on political courage, overcoming bureaucratic inertia and continued commitment at all levels. Bilateral progress has remained elusive due to the lack of one or a combination of the two.

For example, trade expansion met its dead end with the bureaucratic minutiae of Whitehall, while No 10 was still hampered by Brexit.

Four areas – bilateral trade, defense production, strategic affairs and human mobility – would consume the most energy and test mutual resolve to reify this plan. The two countries recently exited neighboring free trade zones – India from the China-led RCEP and the UK from the European Single Market. Doubling trade by 2030 remains ambitious but achievable if the gradual erosion of barriers is seen through.

With India moving to the Chinese capital after Galawan, India’s future unicorns can surely thrive from the British capital. Improving bilateral capital flows also opens up opportunities in FinTech and financial services if an adequate regulatory framework is put in place. With Brexit, the UK has also opened its doors to the world, including skilled migrants from India, which New Delhi has always advocated. The agreement on migration and mobility that is expected to be concluded by April 2022 would be Britain’s Hart-Celler moment.

In defense production, New Delhi preferring government-to-government public procurement and encouraging co-production with technology transfers, London must adapt to new realities and catch up with countries like France. If the two parties can iron out the differences, British Aerospace and Hindustan Aeronautics can design and co-produce platforms, which New Delhi can export and finance to its own constituency in the south of the globe. The two countries remain beaten by China. India’s choppy borders harassed by Chinese troops and Britain’s feuds with Beijing over Hong Kong and Huawei add a natural focal point.

The manifestation of London’s desire for a strategic space in the Indo-Pacific region driven by the idea of ​​Global Britain requires a strategic partnership with India. Trilateral exercises, logistics agreements and information sharing are a leap forward from the apprehensions of yesteryear. With HMS Elizabeth’s planned foray into the South China Sea, the UK is poised to become a reliable player in the brewing alliance of Indo-Pacific democracies.

To her credit, the relationship has matured enough that it won’t allow the tiffs to slip away. London overlooked New Delhi’s activism with Mauritius at the UN against UK possession of the island of Diego Garcia. He also did not blame India for snatching a judge’s post at the Internal Court of Justice, the first time that a P5 country was not on the bench. New Delhi, for its part, regularly ignores the disagreeable statements of British MPs, influenced by pressure from constituencies, on sensitive issues in Kashmir and Khalistan. In a sense, the duo inherit a solid heritage.

In Boris Johnson, Mr. Modi is not cluttered with ideological disjunction. A socialist Jeremy Corbyn could have been deprived of his patent hugs and affable bromance, but not his Tory counterpart. Populist appeal and political pedigree tie them together. Freed from ideological hesitation and motivated by pragmatism, it is essential that the two prime ministers imbue the jointly drafted Roadmap with the adequate political will to make it a reality.



The opinions expressed above are those of the author.