Published on 27 Jan 2025
India-UK historical ties, over the years have transformed into a robust, multi-faceted, mutually beneficial relationship. During the India-UK Summit in 2021, both nations agreed to a new and transformational India-UK 'Comprehensive Strategic Partnership' and an ambitious India-UK Roadmap 2030 to steer cooperation for the next ten years.
Areas of Cooperation
✔ Economy
● Bilateral Trade: In 2021-2022, India-UK bilateral trade reached £25.7 billion, a 35.2% increase.
o Example: India ranked 12th among UK's trading partners, comprising 1.99% of UK's total trade.
● Indian Investment in the UK: India is the 2nd largest source of FDI in the UK.
o Example: India invested in 107 projects, creating 8,664 new jobs.
● UK's Investment in India: UK is the 6th largest inward investor in India constituting 5.3% of all FDI into India.
✔ Social
● Education: UK Immigration Statistics show an 89% increase in Indian student visas, with nearly 118,000 granted.
o Example: A mutual recognition of academic qualifications agreement was signed in July 2022.
● Cooperation in Pandemic Response: India and the UK collaborated significantly in addressing the COVID-19 pandemic.
o Example: They jointly developed a COVID-19 vaccine under a licensing agreement between AstraZeneca (UK) and Serum Institute of India.
● Healthcare Conference: India-UK Healthcare Conferences have been held annually since 2019, organized in association with the High Commission of India.
● People-to-People Exchanges: The Migration and Mobility Partnership (MMP) Agreement was signed to facilitate faster movement of working professionals between India and the UK.
o Example: Both PMs unveiled The Young Professional Scheme for graduates to live and work in each other's countries.
● Indian Diaspora in the UK: The Indian Diaspora in the UK is the largest ethnic minority community, comprising about 1.7 million British nationals of Indian origin and around 300,000 NRIs.
o Example: They make up nearly 2% of the UK's population and contribute 69% of the country's GDP. There are sixteen Indian-origin MPs in the UK Parliament.
● Economic Impact of the Diaspora: The Indian diaspora owns over 65,000 companies in the UK.
o Example: These companies have a combined revenue of £36.84 billion, paid over £1 billion in corporate tax, invested more than £2 billion in capital expenditure, and created over 174,000 jobs.
Challenges in India-UK Relations
✔ Political
● Extradition of Indian Economic Offenders: The extradition of Indian economic offenders who have sought refuge in Britain has been a contentious issue.
● Example: Extradition of Vijay Mallya and Nirav Modi.
● Link with Pakistani Deep State: British involvement in matters related to Jammu and Kashmir, at times with the support of Pakistan's deep state, can create tensions in India-UK relations.
● Non-Acceptance of India's Rise: Some segments of the white British population, including the media, may not fully acknowledge India's emergence as a global power.
✔ Economic
● Differing Expectations on FTA Talks: Both countries may have varying expectations in the Free Trade Agreement (FTA) negotiations, particularly regarding the liberalization of trade in services and investment.
o Example: Data protection is a concern for UK firms operating in India under the FTA, as India lacks GDPR-like protection.
● Taxation Disputes: Disputes over taxation, such as those involving Vodafone Group Plc. and Cairn India Ltd., have been raised by Britain with the Indian government, causing friction in the economic relationship.
BREXIT Impact on India
|
Aspect of Impact |
Positive Aspects |
Challenges and Concerns |
|
Trade and Economic Relations |
✔ India has an opportunity to negotiate a trade deal directly with the UK, potentially benefiting sectors like textiles, software services, and pharmaceuticals. |
✔ Trade disruptions due to new trade barriers and uncertainties as the UK's trading terms with the EU changed. Forging an FTA with India may not be an initial priority for the UK. |
|
Investments |
✔ The UK remained an important investment destination for India, especially in sectors like IT and healthcare. Indian companies continued to invest in the UK. |
✔ Brexit-induced uncertainties led to temporary hesitations among Indian investors. |
|
Diaspora and People-to-People Ties |
✔ Brexit offers the UK the chance to create immigration policies and visa programs tailored to the needs of specific immigrant groups like Indians, potentially resulting in more flexible and favorable visa options for skilled Indian workers and student |
✔ The UK's immigration policies, influenced by Brexit, affected visa rules, impacting Indian students and professionals. |
|
Geopolitical Implications |
✔ India-UK cooperation on global issues, including climate change, counterterrorism, and United Nations reforms, continues to strengthen. |
✔ The UK's evolving global role post-Brexit and its trade negotiations with other countries created a more complex geopolitical landscape. |
Way Forward
✔ Trade and Economic Cooperation: Progress in Free Trade Agreement (FTA) negotiations, focusing on mutual trade and investment benefits. Address taxation disputes and create a favorable investment climate.
✔ Cultural Exchange: Promote cultural exchanges, art, education, and tourism to foster mutual understanding.
✔ Climate and Environment: Cooperate on climate change and sustainable development goals. Partner on renewable energy and environmental initiatives.
✔ Diaspora Engagement: Engage with the large Indian diaspora in the UK and promote their active involvement in both countries' progress.
Based on their shared culture, history, and language, the UK and India have a solid starting point to enhance their relationship. Given the changing times, it's important for both countries to realize that they can help each other achieve their bigger goals.
World Affairs
UK
India-UK Roadmap 2030
Brexit
Comprehensive Strategic Partnership
General Studies Paper 2
International Relations