UK PM to discuss bilateral ties with Indian PM amid "threats from autocratic states"

Contact Counsellor

UK PM to discuss bilateral ties with Indian PM amid "threats from autocratic states"

  • The British Prime Minister will visit India next week, in the backdrop of the Russian invasion of Ukraine that has led to some divergences in Delhi’s and London’s positions on the crisis.
  • He is expected to announce major investment in key industries in both the UK and India as well as new collaboration on cutting-edge science, health and technology.

Expected developments during visit

  • British PM will hold “in-depth talks on the UK and India’s strategic defence, diplomatic and economic partnership, aimed at bolstering our close partnership and stepping up security co-operation in the Indo-Pacific”
  • There will be discussions to drive progress in the Free Trade Agreement (FTA) negotiations launched earlier this year

India-UK Economic cooperation

  • Smart city partnership: UK announced new technical assistance for the redevelopment of Varanasi City Railway Station under the Varanasi Smart City Development Plan in 2016
  • Investment in startups and VCFs: UK has announced to invest 160 mn Pounds in 75 Indian start ups and 20 mn Pounds in India’s Venture capital funds
  • Green Growth Equity Fund (GGEF): announced in 2018
    • Partners: National Investment and Infrastructure Fund of India (NIIF) and the UK government
    • About: An alternative investment fund registered with the Securities and Exchange Board of India (Sebi)
    • Aim: to invest in and develop green infrastructure in India

India-UK Trade cooperation

  • UK is among India’s major trading partners and during the year 2016-17, the UK ranked 15th in the list of India’s top 25 trading partners
  • Bilateral trade: USD 12.48 billion in 2020
  • Exports from UK:Electrical, electronic equipment,Pearls, precious stones, metals, coins Optical, photo, technical, medical apparatus,Iron and steel,etc
  • Exports from India: Machinery, nuclear reactors, boilers,Articles of apparel, knit or crocheted,Pharmaceutical products,Articles of apparel, Pearls, precious stones, metals, coins, etc

Investment Cooperation

  • Inward investment: UK is 6th largest inward investor in India, after Mauritius, Singapore, Netherlands, Japan, and USA
  • Equity investment: US $28.39 billion (April 2000 - June 2020), accounting for around 6% of all foreign direct investment into India
  • Indian Investment: India is the second largest investor in the UK.
  • Investment from Indian companies supports 95,000 jobs across the UK

Science and Technology Cooperation

  • Joint investment in UK-India research: it has grown from less than £1 million in 2008 to more than £200 million.
  • India-UK technical partnership program: announced in 2018
  • Aim: to bring together the best minds working in tech to unlock its future potential and deliver high-skilled jobs and economic growth
  • to catalyse innovation and technology which will address India’s current socio economic priorities.
  • India-UK Clean Energy Research and Development Centre: it brings together leading energy researchers from ten UK universities with their counterparts across India to share experience and develop technologies critical to the future of sustainable energy systems.
  • Joint Strategic group on Antimicrobial resistance
    • Led by: UK Research Councils and India's Department of Biotechnology (DBT).
    • It commissioned a mapping report on AMR research in India in 2016

Associated Challenges

  • Colonial Prism: Anti-colonial resentment against Britain is always seething barely below the surface among the Indian political and bureaucratic classes.
  • Legacy of Partition: The bitter legacies of the Partition and Britain’s perceived tilt to Pakistan have long complicated the engagement b/w India and the UK.
  • Lack of G2G Framework: UK does not have a government-to-government framework for arms sales to India, relying instead on commercial-led transactions.
  • Exclusion from Low risk nation: India has been excluded from low risk nations from UK home office ,denying cheaper and earlier visa conditions
  • Khalistan issue and inactivity of UK on it.

Way Forward

  • Both countries should overcome all the associated challenges via continuous bilateral dialogue. The Free Trade agreement should be concluded as soon as possible in order to further strengthen bilateral economic relations. The recent drift on the Russia-Ukraine issue between both countries should also be discussed while keeping the interests of both countries in mind.

Exam Track

Prelims Takeaway

  • Antimicrobial resistance
  • Securities and Exchange Board of India (Sebi)
  • Green Growth Equity Fund (GGEF)
  • Venture Capital Funds

Mains Track

Q The Free Trade Agreement between India and the UK will boost the bilateral economic ties. Analyze.