India-UK Relations

Facts:
  • Shares in each other’s exports, both goods and services, have steadily declined, and bilateral trade at $14 billion falls far short of their $30 billion goal announced in 2010
  • After Brexit India and UK held talks on the possibility of inking a separate U.K.-India Free Trade Agreement (FTA)
  • MoU between CERT-In and CERT-UK to promote closer cooperation between India and UK for exchange of knowledge and experience in detection, resolution and prevention of security-related incidents
  • A lack of trust permeates the bilateral relationship between Britain and India : Britain’s former High Commissioner to India
Key Issues:
  • When it came to India, the British government doesn’t have a strategy and rather than involving a joined up approach, random interventions were made by individuals within the British government that were inevitably ineffective.
  • India’s concerns
    • Perception in India that Britain was too supportive of Pakistan
    • Recent efforts of the Indian government to extradite high net worth individuals such as Vijay Mallya back to the country and
    • Recent row over student visas
  • British concerns
    • Demands around opening up of financial and legal services in India, and its opposition to India’s visa and mobility demands as part of any agreement.
Outcome of latest Modi visit:
  • Enhanced language on fighting terror groups, naming the LeT and Hizbul Mujahideen for the first time, jointly pushing for the UN Comprehensive Convention on International Terrorism and strengthening strategic cooperation and intelligence sharing through annual consultations.
Outcome of Theresa May visit:
  • MoU on Ease of Doing Business : Under it, expertise from UK Government will be made available to relevant departments and agencies of the Indian Government for the ease of doing business drive. Important areas of cooperation include tax administration, regulatory regimes, support to businesses and start-ups, competition economics etc.
  • MoU for cooperation in the field of Intellectual Property:
It includes exchange of experience, best practices and knowledge of IP awareness among the public, businesses, industry, R&D organizations and educational institutions
Visa Issue:
  • New Visa reforms that impacts India IT companies
  • From April 2017 onwards a company (including India-based), looking to bring a worker into the U.K. for short duration, specifically to carry out the work of another organisation, will have to pay them a minimum annual salary of £41,500.
  • This minimum threshold represents a 67 per cent increase from the extant limit of £24,800.
  • The reforms proposed include significant salary rises, levies and restrictions that will distort the U.K. market, restrict access to the much-required services and increase costs for all.
Critically analyse the relationship between India and Britain. (200 Words)
India and Britain share a very long historical, cultural, economic and political relationship. After Independence, India remain part of Commonwealth and it has played a crucial role in shaping India-Britain relationship
  1. Trade: Britain is having investor-friendly environment with fast-tracked visa which had attracted Indian investors at a fast pace and made Britain, the most attracted investment destination of Europe (Investment increase by 65%). Many Giant companies like Tata, Jaguar Land Rover had invested in Britain and gained profit. Around thousands of Indian companies are working in Britain and generating employment while gaining profit. Now also Britain is struggling from the effects of 2008 financial crisis. To cope from this situation it need foreign investment. This condition could be fulfilled by India at a large extent because India is a fastest growing economies who need a foreign market to expand. Both are fitting to each other need. But majority of this trade is due to only a small number of Indian companies. The BTIA (Bilateral Investment and Trade Agreement) which could provide further impetus to economic ties is pending due to contentious issues of Intellectual property, investor protection and dispute settlement mechanism and Indian access to wine and agricultural products. There are several other rumours such as of ‘Brexit ‘ and ‘Reverse Colonialization’ which can also hamper relations. Also, India is lacking investment in UK in other area like chemicals, health, IT etc. This area is required immense focus.
  2. Diaspora: Currently more than a million Indian lives in UK contributing a great part of Indian diaspora there. Indian students especially in undergraduate courses forms a major chunk of our diaspora. But recent visa restrictions to non-EU countries caused apprehensions in the minds of Indian investors. In 2010 UK imposed strict immigration laws which has reduced the number of students in UK up to 25%
  3. Culture( cricket + Popular Indian cuisine + presence of huge Indian diaspora ). Now, yoga can give an impetus.
  4. Political ties ==Parliamentary exchanges have also taken place under the banner of the Commonwealth Parliamentary Association.
  5. Multilateral cooperation : India and UK cooperate at the EU, G-20 and UN. UK supports India’s inclusion in UNSC as a permanent member
  6. Environment negotiation : Britain against CBDR in climate change. But India insists on financial assistance from developed world for clean technologies.