India-UK : Where Do We Stand 74 Years After Independence?
By: Anushka Pal
Tags: Trade, Politics, Relations, India, UK

India and the United Kingdom have always been closely intertwined throughout history, and have made huge progress in their relations — be it trade, political or educational — despite the sour history.

For the UK, India has always been an important trade partner. The last decade saw a steady rise in trade and the bilateral trade between the two countries has touched US 15.48 billion in 2019–20. More recently, talks have been going on between the two countries regarding the improvement of trade ties. After Brexit, India has been keen on signing a Free Trade Agreement (FTA) with the UK as it is an important trade partner and also an attractive market for service providers from India. Elizabeth Truss, UK’s secretary of state for international trade and president of the board of trade Elizabeth Truss said in a recent interview that India and the UK had agreed to set up working groups to make progress towards removing priority market access barriers. For example, India has already given greater access to Scotch whisky and Welsh lamb in the Indian market.

Investment-wise, it is a pretty decent scenario. The UK is the sixth-largest foreign investor in India, having channelled nearly USD 30 billion into the country between 2000 and 2020. More than 570 companies in India are controlled directly or indirectly by the UK, as of December 2020, with a combined turnover of over $46 billion and a staggering average revenue growth rate of 26%. With Brexit and all the uncertainty around the UK, Indians have surprisingly upped their investment in the UK. According to a Grant Thornton report, Indian companies in the UK appeared unaffected by the ongoing Brexit negotiations and the related uncertainty. Not only are the firms expanding their existing investments, but high net-worth Indian individuals are also increasingly investing in real estate in the UK.

India is also currently working on a roadmap to strengthen its overall relationship with the UK — besides a free trade agreement, mobility and an interim trade deal. Moving forward, more investments are expected in India’s clean energy sector from the UK. In light of this channelling of money, both economies will have to create a lot of jobs in the next decade and build back in a more sustainable way.

Politically, both the countries are linked through multilateral international organisations like the WTO, Asian Development Bank and the Commonwealth of Nations. With the recent India visit of secretary Dominic Raab, a lot of talks have happened on the bilateral front. Both countries want to upgrade the 2004 India-U.K. Strategic Partnership to a “Comprehensive” Strategic Partnership which will help to envision closer military ties, cooperation in Indo-Pacific strategies, counter-terrorism and fighting climate change. The COVID pandemic has brought a new edge to political ties between the countries. Better cooperation for vaccine manufacturing would bring the two countries closer than they currently are. On this note, India’s Serum Institute has been successfully producing and distributing the Oxford/AstraZeneca vaccine since the vaccination drive in India began.

On the education front, the UK has always been a priority destination for Indian students. Both countries have been progressively working on mutual recognition of academic qualifications. India and UK have agreed to set up a joint Task Force consisting of designated higher education organizations from both countries to work towards the same. Recently, India’s recent NEP policy has been hailed by UK ministers as a visionary, which will support India’s agenda for the internationalization of higher education. The UK has also extended its visa policies allowing Indian students to stay in the UK for up to 2 years to find a work visa sponsor, further strengthening the ties between the two countries. Many MoUs have also been signed between the two countries promoting research, entrepreneurship and innovation, implementing skill development programs and improving the employability of the students.

Both countries have hope and confidence that they would further enhance mutual engagement in the field of trade, investment, education, research and innovation, leading to deeper and stronger bilateral relations.