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The British Prime Minister took the somewhat unusual step of embarking on a
second visit to India last month ignoring the protocol of first receiving Indian
Prime Minister Dr Manmohan Singh in London on a return visit. David Cameron had
earlier visited India in July 2010, just ten weeks after assuming office. His
recent three day visit February 18-20 amply underscored his strong desire to
foster a vibrant partnership with India.
Focus on Economics
Strengthening economic interaction was the focus of the visit. Cameron arrived
accompanied by the largest ever business delegation that has travelled with a
British Prime Minister abroad. Some 100 companies, four ministers and nine
Members of Parliament - many with Indian heritage - were on board his Virgin
Atlantic aircraft. They included defence firms Rolls-Royce, Serco, BAE, EADS and
Thales, banks including HSBC, Lloyds and the London Stock Exchange, and
representatives from a large number of universities, several SMEs, football’s
Premier League, the London Underground and others.
The business delegation accompanying Cameron in 2010 was till then the largest
entourage to accompany a British PM abroad. The delegation last month was even
bigger (though possibly not as glamorous), partly because the high expectations
from the last visit had not been fulfilled. The biggest disappointment possibly
was the award of contract for 126 jet fighters for the Indian Air Force to
Dassault Rafale of France in preference to the Typhoon Eurofighter in which UK
has a major stake.
There appears to be a recognition that stronger bilateral economic ties lie as
much in the realm of cooperation between SMEs of the two countries as on big
ticket items like the agreement between BP and Reliance in February 2011 worth
$7 billion for a 30 percent stake in the oil and gas reserves in KG basin off
the east coast of India.
Areas of Cooperation
Cameron had wide-ranging and fruitful discussions with PM Manmohan Singh which
resulted in a Joint Statement detailing several ambitious areas of
cooperation.Useful discussions to further expand cooperation in sectors
encompassing healthcare, education, science and technology, skill development,
R&D, infrastructure, green energy, energy efficiency, low carbon technologies
and cyber security were held. It was decided to launch discussions on a civil
nuclear cooperation agreement in the near future.
PM Cameron extended UK’s full support to India’s permanent membership of UNSC as
well as of the four multilateral export control regimes viz. NSG, MTCR,
Wassenaar Arrangement and Australia Group. Detailed discussions on the situation
in Afghanistan were held. It was decided to establish a Joint Working Group to
monitor developments in the country and to coordinate positions on the issue.
India is concerned about Pakistan’s role in Afghanistan. India was miffed at the
move by UK to bring the Afghan and Pakistan Presidents together for providing a
prominent role to Pakistan in the post 2014 Afghan scenario. Both countries
agreed to strengthen their cooperation in the area of counter-terrorism and
called upon Pakistan to take speedy action against the perpetrators of Mumbai
terrorist attacks in 2008.
The retrospective tax of `14,000 crores on Vodafone was another high profile
issue that was discussed and an agreement was reached to resolve it amicably in
the near future. Discussions on the entry of the multi-brand retail chain Tesco
were also held. It is likely that Tesco will make an appearance on the Indian
scene before long. Tesco has already tied up with Tata to capitalise on this
opportunity.
Both sides agreed to further expand people to people contacts.Cameron
categorically stated that he would make it quicker and easier for Indian
businessmen and students to invest,study and work in UK. He promised one-day
service to businessmen to obtain visas for UK. This was an issue that had
bedeviled discussions and atmospherics during Cameron’s visit in 2010. He
announced that there would be no limit to the number of students wanting to
pursue studies in UK provided they knew English and had obtained admission in a
British University. According to current statistics, the number of students from
India pursuing higher education in UK has fallen steeply from 40,000 two years
ago to around 30,000 last year. New immigration rules appear to be the biggest
reason for this sharp decline. In return, Cameron exhorted the Indian Government
to bring down outdated barriers to investment to help UK-based companies in
areas like insurance and banking to establish a foothold in the fast-growing
economy.
Cameron used the opportunity to remind his hosts about Britain’s continuing
interest to supply the Eurofighter Typhoon in case the deal for Dassault Rafale
failed to come through. He, however, found himself on a sticky wicket regarding
allegations of corruption against the Agusta Westland supplies of VIP
helicopters and growing voices to cancel the deal. Cameron strongly pointed out
that Britain has tough anti-bribery legislation in place to ensure against any
fraud and promised to extend all help to the Indian Government to investigate
the case. As a recognition of India’s rapid economic development, and also
possibly irked by the decision to award the multi-billion dollar contract for
supply of fighter aircraft to France, Britain has decided to discontinue its
direct aid to India amounting to around $350 million per annum from 2015 and
instead route its support through technical assistance.
While appealing to history, culture and language as binding factors between the
two countries, he acknowledged that these bonds were not enough to cement
business ties in the present day competitive environment.
Cameron took the opportunity to visit Amritsar to pay respect at Jallianwala
Bagh and expressed “regrets” at the monstrous action which killed more than
1,000 unarmed, innocent men, women and children on Baisakhi on April 13, 1919.
He termed it as “a deeply shameful event in British history”. He may have done
this for domestic, political reasons, but its psychological impact on the people
of the two countries cannot be under-estimated.
Forging a “Special Relationship”
Cameron said he was determined to forge a “special relationship” with India,
which is set to be “one of the leading nations in this century.” Yet talk of an
especially close bond with Britain does not really ring true in India. Of course
Britain has much to offer - investment, technology, university excellence and
links to 1.5 million people of Indian origin in the British Isles etc. But
important foreigners turn up in India with steady regularity, each claiming some
special link to the subcontinent. Last week, it was the turn of France’s
president, Francois Hollande. Before that Presidents of China, Brazil, Russia,
South Africa and PMs of Canada and Australia touched the shores of India in
quick succession.
How can Britain - a small island on the edge of a continent of diminishing
global clout - hope to stand out from the crowd? This is what Cameron and his
team sought to answer by unequivocally affirming to their Indian interlocutors
that they are serious in building a strong and ‘special relationship’ with
India, based not only on trade, investment, education, technology, nuclear
energy, but also on cooperation on strategic issues like counter-terrorism,
Afghanistan, cyber-security etc.
Considering that India plans to spend $1.5 trillion towards creating
infrastructure by building roads, ports, telecom, highways, airports and
transmission and distribution systems, it is no surprise that Cameron is keen
that British companies exploit such emerging opportunities.Cameron said he
wanted his companies to help India develop new cities and districts along a
1,000 km corridor between Mumbai, India’s financial capital and Bengaluru, its
technology hub, generating investment projects worth $25 billion. He emphasised
that architects, planners and financiers were a part of his team to work with
Indian counterparts to provide them with complete solutions to develop the
industrial corridor. He offered to provide ?1 million to conduct a feasibility
study of the project if matching funding from the Indian government was
available.
India is among the top five investors in Britain with over 700 Indian companies
having invested $19.9 billion. The Tata Group is the largest employer in the
manufacturing sector in UK with operations ranging from automobiles and IT to
steel and tea. Total investment from UK into India is $28 billion. Bilateral
trade was $16.25 billion in 2011-12, up from $12.7 billion in 2010-2011 and
$10.7 billion in 2009-2010. Both sides agreed in 2010 to double trade by 2015
and officials in the know said that they are on track to achieve this target.
Two-way merchandise trade between India and UK grew by an average 23 percent
each year over the last two years. India sought Britain’s help and support in
obtaining a speedy completion of the India-EU Bilateral Trade and Investment
Agreement in 2013.
Cameron demonstrated that he has shifted focus and treats India, not within the
confines of South Asia, but as a rising power which will become the world’s
third largest economy by 2030. There is realisation on both sides that this is
the beginning of a long and arduous journey to further deepen bilateral
political and commercial engagements. Britain finds itself confronting several
challenges of increasing unemployment and declining growth at home, while having
few options except to try to convince emerging economies like India that
collaboration with UK would be a win-win opportunity for both. The high profile
visit by Cameron is a step in the right direction and augurs well for a stronger
and mutually beneficial strategic and economic partnership between the two
countries.
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