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AIR spotlight summary on “India-UK Bilateral Relations”

 

 


AIR spotlight summary on “India-UK Bilateral Relations”.


Introduction

The Prime Minister of the United Kingdom Theresa May is on a three day visit to India. This is the first bilateral visit of Theresa May outside Europe since she became Prime Minister. That reflects the priority which Britain attaches with India. India’s approach is that the Visa rules to UK should be relaxed. India pushed for greater mobility for students and researchers and for short term business visits.  

The issue on Brexit

  • The world is trying to figure out the cost on commercial agreements and relations that would be after UK completes its exit from Europe.
  • There is no commercial negotiation between countries and UK since the time UK became the member of EU. All the commercial negotiations were held under EU. After Brexit the Britain has to develop negotiations and make trade agreements with all their partners.
  • Since the terms on exit of Britain are still to be worked out, India would watch before we get into detailed negotiations. Both countries are hopeful about bilateral trade and investment agreement.

Immigration and Visa issue

  • In the whole Brexit debate one of the most critical issues is the immigration issue. They need to control the flow of immigrants into their country. There are people of Indian community in UK who voted for Brexit. India would not react so long as the rules are made in a non discriminatory fashion, without discriminating any country. There must be enough flexibility in the immigration rules for dealing with genuine cases, like people married to someone in UK or when there are medical reasons and people want to stay in UK for long periods of time. The immigration rules should not be dampener for genuine travellers, students, research workers etc.
  • Tourism is another factor; lot of Indian’s visit UK and spend lot of money. For Chinese tourists, UK has reduced the tourist visa fee. It is unlikely that India will get the similar generosity. The number of Indian tourists is huge and there is a need for some kind of generosity. India has opened up electronic visa for people who want to travel to India and is willing to reduce the visa fee. There is need for generosity and pragmatism in the tourist visa fee issue.
  • In the last 5 years the number of Indian students going to UK has fallen by 50%. This is because of the tightened rules. Indian students find opportunities that are as good as Britain in Australia and Canada apart from USA. It’s time to negotiate with UK for visas and making easy mobility between both the countries.

India-UK Economic Relations

  • Economic cooperation potential is huge. Presently UK is the 12th largest export destination for India. UK is the single largest investor among the G20 countries in India. It’s the third largest investor overall after Mauritius and Singapore. It has invested in large number of industries including Energy, scientific and innovative industries. Similarly there are 800 Indian companies which have invested in UK and are looking to expand Indian Investment in UK.
  • London is still the global centre for finance. Raising money for investment in India and for India’s development is one area UK will play a very big role. The Masala Bonds which are denominated in Indian Rupee are launched in London. This money can flow into development activities and other investable areas in India. Trade needs to be expanded from its current level of $15 billion which is very small considering the potential on both sides.

Bilateral Cooperation

  • UK values its relationship with India just more than trade and India regards UK as an important player in world politics and development. There is convergence of views on the global issues. Both believe in rule based international order. UK is the permanent member of the UNSC and supports India for its permanent membership. Both support for the development in west Asia.
  • There are areas in which UK seeks India’s support, opinion and share their views with us. At a time when UK is not the part of Europe, it is very important to have strong friends outside and India is one of those.
  • UK is not necessarily a player in the India-China relationship. They view it entirely different. UK wants investment from China including in areas like Nuclear Energy. As China internationalise the Renminbi, the city of London would play a role in China’s evolution as a global economy and Chinese currency as a global currency. With China their considerations is only economic whereas with India it is more than just economy.