Foreign Policy Watch: India – EU

India-UK Relations

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Free trade agreement

Mains level : Bilateral ties, Strategic partnership

Context

  • The year 2022 is significant for both India and the UK as our country commemorates the 75th anniversary of its Independence and the two celebrate 75 years of bilateral ties.
  • India-UK relations were elevated to a Comprehensive Strategic Partnership in 2021, based on a shared commitment towards democracy, fundamental freedoms and multilateralism.

Background of the India-UK ties

  • Partnership: The historical legacy has its own imprint on the relationship. But what is truly remarkable is the broad range of partnerships that have evolved between the two countries, transcending trade, investment and strategic affairs.
  • Close ties: This broader partnership between the world’s fifth and sixth largest economies has its foundations on three critical aspects: education, common law system and the increasingly influential role and impact of the Indian diaspora in the UK.
  • Shared values: The India-UK partnership is based on shared values, respect for the rule of law and common law, and institutional integrity protected by democratic institutions in the both the countries.

What progress has been made in the India-UK relationship?

1.Economic: During 2019-20, trade between the two countries stood at US$ 15.45 billion with the balance in favor of India. Between April 2021-February 2022, Indian exports to the UK stood at US$ 9.4 billion (2.5% of India’s exports). The imports in the corresponding period were US$ 6.59 billion (1.2% of India’s imports). There is a scope for significant improvement. Both countries expect that the bilateral trade can reach US$ 100 billion by 2030.

2.Defense and Security: India and the UK signed the Defence and International Security Partnership (DISP) in November 2015. It provides a strategic roadmap and direction to the evolving India-UK Defence Relations. At present some 70 companies in the UK supply goods for aircraft and related equipment besides supporting platforms like the Jaguar, Mirage and Kiran aircraft.

3.Indian Diaspora: Around 1.5 million people of Indian origin live in Britain. Indian diaspora are making significant contributions to the British Society. This includes 15 Members of Parliament, three members in Cabinet, and two in high office as Finance and Home Ministers.

4.Education: The UK-India Education and Research Initiative (UKIERI) was launched in 2005. A new ‘UKEIRI Mobility Programme: Study in India’ was also launched in 2019. Under this Britain’s universities collaborate with Indian partners and send UK students to India.

5.Health: The successful partnership between Oxford University, AstraZeneca and SII on COVID-19 vaccine demonstrated the potential of Indian and UK expertise working together to solve international challenges. The two sides are also working on pandemic preparedness, Antimicrobial Resistance (AMR), digital health, Ayurveda and alternative medicines, as well as health worker mobility.

What is the significance of India-UK Relationship?

1.Regional and global issues of mutual interest: A healthy relationship between the two is imperative for enhancing cooperation in the Indo-Pacific, Afghanistan, UNSC, G20 and Commonwealth. For instance, India welcomed the UK’s accession in the Indo-Pacific Ocean’s Initiative under the Maritime Security pillar.

2.Tackling Climate Change: The cooperation between them can be helpful to achieve the goals of the Paris Agreement and in implementing the Glasgow Climate Pact. For instance, the countries have agreed to work for early operationalisation of the Global Green Grids-One Sun One World One Grid Initiative (OSOWOG) under ISA. They are also working on the IRIS platform under CDRI which was jointly launched by India and UK at COP26.

3.Supporting 3rd World Countries: Through the Global Innovation Partnership, India and UK have agreed to co-finance up to £ 75 million to support the transfer and scale up of climate smart sustainable innovations to third countries. The novel GIP Fund created under this Partnership will also aim to raise additional £ 100 million from the market to support Indian innovations.

3.Strategic Considerations: India can engage with the UK to counter China’s rise in the Indian Ocean Region. The UK on other hand can use India as an alternative destination to China and its companies can invest in India as part of China plus one strategy. It is the business strategy to avoid investing only in China and diversify business into other countries.

Challenges in India-UK relations

1.BREXIT

  • Impact on Diaspora– Many members of Indian Diaspora in Britain had voted against BREXIT because it is likely that Indian IT Professional in Britain will face tough competition when UK will open up its border for more skilled migration.
  • Impact on Indian Companies in UK– A hard Brexit would inevitably impact more than 800 Indian companies in UK in crucial sectors of British economy Indian. But data has shown that companies are increasing investments in the UK and creating many thousands of new jobs. This demonstrates that, Brexit or no Brexit, India supports Britain.
  • Impact on India-EU Relations –With €72.5 billion worth of India-EU trade and €19.4 billion of India UK trade at stake, all partners needed to think through this issue carefully in the business and commercial context. Brexit seems to be a challenge to the India EU strategic partnership but India would need to learn to manage its relations with the EU without UK
  • Impact on Trade–Forging a Free Trade Agreement with India will not be a priority for UK as it leaves EU. Instead, Britain would initially focus on tackling existing barriers to trade. But India should grab the opportunity to fill the trade gap in UK, post-Brexit.

2.Visas and Immigration

  • Illegal Migration: There are more than 1 lakh illegal Indian immigrants in UK. Britain has started putting pressure on Indian government to ensure that Indians who have no right to remain in UK be sent back to India
  • Latest Measures: On the other hand, a white paper on post-Brexit visas and immigration strategy has been unveiled. It is expected to benefit Indian students and professionals, with a focus on skills rather than country of origin. An annual cap of 20,700 on the number of skilled work visas issued will also be removed.

3.Terrorism

  • In the context of Brexit, unlike the United States’ contemporary view, India continues to be hyphenated with Pakistan in London’s outlook.
  • India states the fact that bilateral relations went beyond the economic realm to issues such as security and terrorism were not being heeded in Britain, despite continuous efforts by India over the past decades.

4.Totalization agreement

  • The UK government has also made it mandatory for people to pay a health care surcharge as part of their immigration application.
  • When employees are there for a short term as part of their work, it is important that they get to keep their hard-earned money rather than giving UK thousands of pounds of free money as social security taxes.
  • Therefore, it is important for UK and India to sign the totalization agreement at the earliest.
  • The totalization agreement with the UK would have exempted Indian professionals who are working for a certain period of time in the UK from paying those social security taxes if they are paying such taxes in India.

Way forward

  • The historical baggage also needs to be addressed cooperatively to diminish the possibility of hindrance in future cooperation.
  • The India-United Kingdom are dynamic democracies and the world’s leading economies with impressive advancements in human resources, manufacturing, innovation, research, education, space, defence, green technologies, and clean energy, among other areas.
  • This relationship can be utilized for the betterment of the fields and more collaborations should be undertaken.

Conclusion

  • As we celebrate the historic collaboration between the UK and India in producing the Covishield vaccine, and look forward to the much-awaited signing of the bilateral Free Trade Agreement, we should not lose sight of the tremendous power that transnational university-wide collaborations can leverage in the accord. Education, research and knowledge partnership ought to become the centre-piece of the India-UK relationship at 75, as we move forward.

Mains question

Q.Analyse India-UK bilateral relations with scope of upscaling and challenges they need to overcome .

 

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