India-UK Relations: Significance, Convergences & Divergences

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India-UK relations, over the years, have transformed into a robust, multi-faceted, mutually beneficial relationship.

India-UK Relations: An Overview

India-UK ties, shaped by shared history and evolving interests, now focus on strategic trade, defence, education, and climate cooperation. As global leaders, both nations aim to strengthen their partnership for a sustainable and inclusive future.

Historical Perspective of India-UK Relations

Colonial Era (1858-1947): India came under direct British rule after the 1857 rebellion. The British monarch held the title of Empress/Emperor of India.
Post-Independence: India chose to remain in the Commonwealth after becoming a Republic in 1950.
Cold War Strain: Diverging foreign policies during the Cold War strained relations, with India pursuing non-alignment and the UK aligning with NATO.
Economic Reforms (1990s): Post-Cold War, economic liberalisation improved ties, focusing on trade and investment.
Strategic Partnership (2004): Upgraded relations with regular high-level visits, enhancing cooperation in trade, defence, and cultural exchanges.

Significance of India-UK Relations

Geo-Strategic: Enhances India’s leverage in the Indo-Pacific and offers UK alternatives under the “China Plus One” strategy.
Geo-Political: Strengthens cooperation in Afghanistan, AUKUS alliance, G20, UNSC, and Commonwealth forums, with mutual support for Indo-Pacific stability.
Economic: The proposed FTA can boost labour-intensive sectors in India and benefit UK’s automobile and beverage industries.
Climate: Collaboration aids Paris Agreement and Glasgow Pact goals through renewable energy and green grids like OSOWOG initiative.

Areas of Cooperation

Geopolitical: UK supports India’s UNSC permanent membership and collaborates in forums like the AUKUS alliance, G20, Commonwealth, and Indo-Pacific initiatives.
Economic:
- Record Trade: Bilateral trade reached a significant milestone of USD 20.36 billion in 2022-23.
- Major Trading Partner: India is the UK’s 12th largest trading partner.
- Significant FDI Source: India is a major source of FDI for the UK, creating over 5,000 jobs.
Defence: The Defence and International Security Partnership (DISP) 2015 enhances cooperation, with UK firms supplying critical components for Indian aircraft.
Education: UK remains a top destination for Indian students. Programmes like UKEIRI Mobility support UK-India student exchanges.
Health: Partnerships like the AstraZeneca-SII vaccine collaboration address global healthcare challenges, including AMR and pandemic preparedness.
Climate: The India-UK Green Growth Equity Fund and OSOWOG initiative target renewable energy and sustainable development.
Diaspora: The 1.5 million-strong Indian diaspora in the UK significantly contributes to British society.

Challenges in India-UK Relations

Russia-Ukraine Conflict: Diverging stances, with UK’s criticism and India’s neutral position.
Ties with Pakistan and China: UK’s engagements complicate defence and security partnerships.
Khalistan Issue: Allegations of UK’s support for Sikh separatism hinder relations.
Defence Procurement: UK’s slow adaptation to India’s G2G acquisition model.
Extradition: Delays in extraditing fugitives like Vijay Mallya and Nirav Modi.
Illegal Migrants: Over 1 lakh illegal Indian immigrants remain unresolved due to the absence of a migration agreement.
Colonial Legacy: Lingering anti-colonial sentiments and unresolved issues like Partition’s impact.

India-UK Free Trade Agreement (FTA)

The election of a Labour govt. under PM Keir Starmer in the U.K. brings renewed momentum and political stability to the long-drawn India-U.K. Free Trade Agreement (FTA) negotiations. It offers a fresh opportunity to resolve outstanding issues towards a mutually beneficial FTA.

Key Benefits For India

Enhanced Market Access: Tariff reductions on textiles, pharmaceuticals, and agricultural goods will boost Indian exports.
Strengthening IT and Services: Facilitated mobility for IT professionals and service providers to the UK, expanding India’s global IT footprint.
Attracting Investments: Increased FDI inflows from the UK in technology, infrastructure, and renewable energy sectors.
Job Creation: Employment in textiles, manufacturing & agriculture due to expanded exports.
Green Energy: Boost to India’s renewable energy and climate action goals through UK partnerships.
Geopolitical and Strategic Gains: Enhanced diplomatic ties and a template for future FTAs with the EU.

Key Benefits For UK

Expanding Market: Access to India’s 1.4 billion consumer base, especially for products like Scotch whisky and financial services.
Post-Brexit Strategy: A significant win for diversifying trade relations with emerging economies.
Investment Opportunities: Access to India’s booming infrastructure and renewable energy markets.
Strategic Partnership: Aligning interests on global forums and cooperation in areas like climate change.

Key Challenges

Visa issues: India’s demand for more work visas faces resistance due to the UK’s immigration policies.
Social Security: India’s push for worker benefits in the UK clashes with UK’s welfare framework.
Rules of Origin: Disputes over local sourcing requirements for tariff benefits remain unresolved.
Tariffs on UK Exports: India’s steep tariffs on Scotch whisky & automobiles are points of contention.
Carbon Border Tax Exemption: India’s demand to exclude its exports from the UK’s carbon tax remains unresolved.

India and UK must leverage their historical ties to build a forward-looking partnership that addresses contemporary global challenges while maximising mutual gains.

Reference: The Hindu | Indian Express

PMF IAS Pathfinder for Mains – Question 9

Q. Examine the implications of the India-UK Free Trade Agreement (FTA) on bilateral relations. Discuss the key benefits for both nations and identify the critical challenges that need resolution for its successful conclusion. (15 Words, 250 Words)

Approach

Introduction: Briefly mention about India-UK Free Trade Agreement (FTA).
Body: Discuss the Key Benefits & Challenges for India and UK Free Trade Agreement (FTA).
Conclusion: Write a way forward and conclude with highlighting need of strong foundation.