India-UK Ties
By Prof. (Dr.) D.K. Giri
(Secy Gen, Assn for Democratic Socialism)
In a UK-India Leaders’ Conference held in the British Parliament on 7th October, leaders from politics, business and civil society expressed optimism in a new chapter in bilateral ties. Such a feelings stemmed from a Free Trade Agreement (FTA) which is to be signed pretty soon. One of the British negotiators commented that, “The fingers are already touching, only a few inches to go for the handshake”. Participating in the conference, I stated that, it is a matter of months for the FTA to be signed and sealed. My assertion was based on the realisation that geo-political and geo-strategic considerations backed by progressive realism on both sides would lead them to sign the FTA.
In support of my prediction, I argue that Britain is rediscovering its historic footprint in the world, albeit in a modern cooperative framework, having exited from the European block. Likewise, India is exploring its future in the world, as an acknowledged power from the Global South, having shed off its anti-colonial mindset. Also, New Delhi has been negotiating an FTA with the European Union for the last 17 years, and the conclusion is not yet at sight. Britain came out of the European Union in 2020, and offered to sign an FTA with India in April 2022. There have been 14 rounds of negotiations since. And the Treaty is around a striking distance to be sealed.
Before we discuss the FTA, it is in order that we touch upon the history and evolution of India-UK bilateral relations. In 1947, at the time of independence, India decided to retain her ties with Britain through the Commonwealth consisting of former British colonies. The Commonwealth provided the ‘window’ to the world for independent India. But soon after the 1947, and the Second World War, the world was plunged into a cold war. India and Britain found themselves in the opposite camps with divergent views. From 1947 to 1997, near about the end of the Cold War and transformation of Indian economy, there was no convergence or closeness that appear to characterise the relations now, or since two decades.
To name a few cases in history of divergences, Britain was critical of India’s actions in Goa for its liberation from Portuguese. Britain was often critical of India’s position on Kashmir. Even in the Bangladesh Liberation war, Britain was on the other side. Likewise, India was critical of Anglo-French attack on the Suez Canal in 1956. But as the Cold War ended, the geo-political equations dramatically changed among the world powers. India and Britain realigned their foreign and economic policies. India carried out radical reforms by embracing, to a great extent, the LPG strategy – liberalisation, privatisation, and globalisation. New Delhi focused more on economic growth than politics.
Britain and India entered into a strategic partnership in 2004. It was changed to enhanced partnership in 2010. After Britain exited from the European Union, the partnership was elevated to Comprehensive Economic Partnership. This aimed at bilateral, regional and global cooperation. At the same time, Britain formulated a 2030 roadmap for India with twin objectives: increasing its influence in Indo-Pacific, and second, building India as a counterweight to China. In this journey, trade and economic partnership was to be the main vehicle. The volume of trade which stood at roughly about 50 b USD is to be increased to 100b USD by 2030. Then came the FTA. It is to be the icing on the cake in India-UK relations.
The 2030 roadmap, the forerunner of FTA, was based on five pillars. One, connecting the countries and people through culture, education and research etc. Second, trade and prosperity through enhanced partnership; third, defence and security – Indo-Pacific region being the new area of joint collaboration in order to secure a free, open and secure region. Mitigating the potential and actual threats from a belligerent Beijing. Fourth, climate change – to bring global warming well below 2 degrees. Fifth, health sector, both countries have the potential as evidenced during Covid that they can together become a global force for greater good.
The Free Trade Agreement will build on these pillars. For public consumption, what is an FTA? In trade and economic discourse as well as practice, FTA is the most preferred agreement to conduct business between two or more countries. It has potentially both upsides and downsides. The plus points comprised increased trade flows by cutting and eliminating tariff and non-tariff barriers; increased investment opportunities which create growth of employment and revenue. FTA increases efficiency, promotes cooperation and sustainability and so on.
The negatives consist of job losses due to competition, unequal distribution of benefits, harmful environmental impacts, lower regulatory standards in either country and so on. But these negative consequences of FTA are not inevitable. They can be tackled by collaborative transparent efforts.
In India-UK FTA, there are 26 chapters. Many of these have been concluded except a few, about four chapters which seem to be the sticking points. According to the Global Trade and Research Initiative (GTRI) the deal is almost finalised with a few adjustments to be made. The so-called road blocks, from Indian side, are the leadership instability in Britain which is over as a new party has come to power with a comfortable majority; the visa provision for Indian skilled professionals mainly in IT and healthcare; market access for services and goods, mainly for labour-intensive products; firm stand on data inclusivity, protection, and localisation; the UK demand on Indian Government procurement which will affect the Assamese.
From the British perspective, the roadblocks are Indian tariffs, mainly on export of cars and their components and Scotch whiskies which are now at 125 per cent and 150 per cent respectively; the issue of data protection and that of Intellectual Property Rights. Britain is concerned about investment and market environment with regard to labour, gender, corruption, and red-tapism etc. There is also concern about rules of origin of products such as whisky, stilton cheese, Cheddar cheese.
India is demanding similar GI products – Geographically Indicated products like rules of origin on Basmati rice, Darjeeling tea, Chanderi fabric, Mysore silk, Kullu shawls, Kangra tea, Thanjavur paintings and Kashmir walnuts etc. India is clearly wary of giving too many concessions without reciprocal measures and least they should be replicated in other future agreements.
Despite the above differences to be sorted out, I firmly asserted that FTA will surely be signed. It has the bipartisan consensus as both the major parties – Conservative and Labour – have made it a manifesto commitment. To be sure, FTA will deepen the ties between India and UK. Also, it should offer a model to the world, as to how a former colony does business with the country on equal terms as a partner. — INFA