Opinion

‘India first’ for Johnson

Jayant Krishna | Updated on April 22, 2021

Enhanced trade agreement with UK on cards

British Prime Minister Boris Johnson cancelling his India visit, the second time in four months, has led to much all round disappointment. But key deliberations will continue later this month at the prime ministerial level, albeit now in a virtual mode.

The UK-India relationship has grown and evolved in recent years. After Brexit, the Indo-Pacific region has emerged as a top priority for the UK’s new Security, Defence, Development and Foreign Policies.

Visa woes

One of the major sticking points in previous years was the tightened visa regulations for Indian citizens. Yet, in 2021 Indians are on equal footing with the same opportunity as EU citizens to obtain a work or student visa in the UK.

Moreover, Indian students will have the opportunity to work in the UK for two years after their education thanks to the new Graduate Immigration Route open from July 2021.

In the last 12 months in particular, the relationship has gone on to the next level. The Oxford-AstraZeneca vaccine manufactured in Pune is helping the world fight Covid and the UK-Government-Bharti Global acquisition of OneWeb will deliver high-speed and low-latency broadband services globally.

Recent acquisitions in the UK of sporting motorcycle Norton by TVS and two-wheeler firm Classic Legends by Mahindra & Mahindra are interesting developments. Essar is investing in an ambitious hydrogen project in the UK.

Large investors like Tatas are expanding in the UK. India continues to be the second largest investor in Britain.

With the UK hosting the UN Climate Change Conference (COP26) in Glasgow later this year, the bilateral relationship is an important stepping-stone for the showpiece multilateral event.

On security, India stands to gain from the UK’s defence capabilities. Manufacturing and heavy engineering also hold much promise as British technologies could be leveraged to manufacture in India for domestic and export markets. Firms like JCB, Rolls-Royce, BAE Systems, Diageo, and GSK are shining examples of this.

Success of banks like HSBC and Standard Chartered in India and the increase in the FDI limit for the insurance sector to 74 per cent throw up opportunities in the BSFI sector.

De La Rue is keen to invest in the production of high security features enabled currency notes in India, including polymer substrate ones, which are greener, cleaner and safer.

Economically, both countries are among the largest in the world and are at critical junctures under the auspices of ‘Atmanirbhar Bharat’ and ‘Global Britain’ that aim to put India at the forefront of global supply chains and renew the UK’s commitment as a force for good in the world respectively. Post-Brexit, many UK companies expect to do more business with India.

When Johnson and Prime Minister Narendra Modi meet virtually, the two countries are set to sign an enhanced trade agreement that covers tariffs, trade in goods and services, and investments, as announced by Trade Secretary Liz Truss and Commerce Minister Piyush Goyal in February. This would pave the way for an eventual Free Trade Agreement.

A 10-year UK-India roadmap for trade and investment and possibly climate action is also likely to be set out .

Johnson has long been an ardent supporter of India. So, it happens to be that the UK’s increasing attention towards the Indo-Pacific is coupled with a PM who knows India well. The course is set for mutually rewarding bilateral talks between the two nations.

The writer is Group CEO, UK India Business Council

Published on April 22, 2021

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