By P.K.Balachandran/Ceylon Today
Colombo, March 6: Britain, which ruled India partially for about 182 years and fully for 90 years till 1947, now sees a reversal of roles in more ways than one. Not only is an Indian-origin man Prime Minister of Britain, but an economically declining Britain is more eager to build ties with India than the other way around.
According to the World Economic Forum, a decade ago, India’s GDP was the eleventh largest in the world. Now the Indian economy has overtaken that of the UK making it the fifth biggest. India’s GDP in 2022 was US$3.5 trillion, while Britain’s was US$ 3.38 trillion. The IMF says that with India expected to leap further ahead of the UK up to 2027, it will be the fourth largest economy and the UK will be the sixth.
The disruptions caused by Brexit and domestic political instability in Britain led to British output falling behind India’s in 2021-22. The UK is aware of this and is eager to shed its colonial attitude of superiority towards its former possession.
Given its new-found strength, India is becoming belligerent in its dealings with Britain. Recently, when the BBC telecast a two-part documentary on the 2002 anti-Muslim pogrom in Gujarat, in which Indian Prime Minister Narendra Modi was shown as being complicit, New Delhi was incensed. Foreign Minister S. Jaishankar described it in an interview to Asian News International (ANI) podcast, that the documentary was a thinly-veiled bid to bring about a regime change in 2024. India not only banned the documentary but got its tax officials to raid the BBC’s offices. When the visiting British Foreign Secretary, James Cleverly, raised the issue, on the sidelines of the G20 meeting in Delhi, Jaishankar closed the matter with the cryptic remark: “Entities operating in India must comply (with India’s tax regime).”
Being more eager to build economic relations with India than defend the BBC, Cleverly said: “India is a hugely important partner to the UK and the deeper ties we are forging now, will help to grow the UK economy and boost industries for the future.” He went on to announce that the UK will appoint a ‘Tech Envoy’ to the Indo-Pacific, with a focus on India. Britain has a Tech Envoy for only one other country in the world – the US.
“India is also an emerging global leader in technology and there are immense opportunities for better collaboration between us in this sector,” Cleverly stressed.
Through an FTA, the UK aims to double UK-India trade by 2030. Britain and India have already announced a scheme for young professionals, which will give 3,000 Indians and 3,000 Britons a pathway to live and work in each other’s countries for up to two years. This partially addresses the Indian complaint that, while UK wants Indian trade and investment, it rejects Indian immigrants/expatriates.
Writing in a Chatham House publication, David Scott quotes a hard-hitting report by the British Council in 2015 entitled India matters to say that the colonial legacy has been a barrier for the UK to forge better relations with India. Anti-immigration rhetoric during the 2016 referendum on Brexit had created fears of racism in Indian minds. Even recently, ministers Priti Patel and Suela Braverman had taken a hard stand on this issue.
At any rate, between 1947 and 1997, the UK had been hostile to India virtually on all issues involving India. India’s independent ‘non-aligned’ foreign policy and its close ties with the USSR during the Cold War, had irked Britain. Britain opposed the Indian take-over of Goa from the Portuguese and Sikkim from the Maharajah. It opposed India’s nuclear tests. It kept needling India on the dispute with Pakistan over Kashmir. On its part, India opposed the invasion of Egypt during the Suez Crisis and demanded that the Indian Ocean be declared a Zone of Peace.
But there was a sea change in the 1990s. According to David Scott, at present, Britain’s relationship with India is “primarily driven by economic considerations rather than political/normative considerations.” More importantly, he says that the “relationship is an asymmetric one in which India is more important to the UK than the UK is to India, and in which the UK is pursuing India more than India is pursuing the UK.”
How did this happen? The disappearance of the USSR in the 1990s and the economic reforms carried out in India between 1991 and 1996, had cleared the way for better UK-India ties. India’s domestic market and its finances to invest abroad had grown exponentially. British Prime Ministers began to make a beeline to India beginning with John Major’s visit to Delhi in 1997. In 2006, UK’s Business and Enterprise Committee aimed at establishing a relationship with India “as special as the one with the US.” John Major predicted that “within 25 years India will have firmly established herself as one of the world’s economic powers”. He was prophetic.
As Chancellor of the Exchequer and as Prime Minister, Gordon Brown had paid high-profile visits to India in 2007 and 2008, each time accompanied by 100 to 150 British entrepreneurs. Prime Minister David Cameron made three visits as Prime Minister between 2010 to 2016. This made David Scott remark: “Cameron was looking like a slightly desperate suitor in Indian eyes, trying to persuade Britain’s old colony to give him another chance.” However, Britain’s target of quadrupling exports to India to around US$36 billion by 2020 was not met. Exports to India kept fluctuating.
In a bid to keep up good relations with India, Britain continued to give aid, but India bluntly told the British that it did not want British aid. Soon, Britain also felt that “21 st. century India” did not require aid. But it fervently wanted a strong economic partnership with India.
Narendra Modi, who was unpopular in Britain following the 2002 Gujarat riots, was welcome on British soil once he became Prime Minister. He visited the UK in 2015 and addressed the British parliament. During the visit, more than BP 9 billion in commercial deals were struck to create or safeguard 1,900 UK jobs. High profile Indians in British politics like Alok Sharma and Priti Patel helped modify Britain’s colonial outlook. According to Patel Modi had shown that “he is a man who can deliver stronger economic ties with the UK.”
Cooperation in defense equipment manufacturing came into being with Augusta Westland’s deal with the Tatas for making AW119KE light transport helicopters; the BAE Systems and Mahindra & Mahindra entering into a deal to produce a range of armored vehicles; and Hindustan Aeronautics and Rolls-Royce entering into a deal to jointly assemble engines for the Hawk Advanced Jet Trainer.
In 2003, the UK was the second largest direct investor in India. By 2022, according to www.investindia.gov.in the UK had become the 6th largest investor in India with US$ 32.82 billion in FDI inflows between April 2000- September 2022. There are currently, 572 UK companies in India with a combined turnover of U$ 48 billion, directly employing 416,121 people as of FY20. UK’s investments are strong in education, retail, consumer goods, life sciences, healthcare, and infrastructure.
India is the 2nd largest FDI contributor in the UK. Over 900 Indian companies operate in the UK generating a total turnover of U$ 68.04 billion and employing 141,005 people in 2022. Thus, to date, India’s contribution to Britain is more than Britain’s contribution to India, which is giving the economic and political relationship a new asymmetry.