India-UK innings back on track

India's ties with the UK are at an interesting crossroads. Regardless of the direction taken, relations seem poised to move in an upward trajectory

On July 4, British citizens will head to the polls to vote in an early general election. The Labour Party is poised to win, replacing the Conservative Party that has ruled Britain since 2010. A change in government after 14 years would have implications for British foreign policy, including the UK’s relations with India.

For years, the story of India-UK ties had been underwhelming despite the long intertwined histories of the two nations. In addition, a prolonged Brexit process and political turmoil within Britain resulted in a lack of attention beyond these issues.

With Brexit finally out of the way, the India-UK partnership has begun to blossom, characterised by India’s key role in post-Brexit Britain’s foreign and trade policy and its “Global Britain” aspirations. Ties were upgraded to a Comprehensive Strategic Partnership in 2022 during former Prime Minister Boris Johnson’s tenure, accompanied by a 2030 road map to deepen bilateral relations.

Under Jeremy Corbyn, the Labour Party was widely perceived as antagonistic towards India with its repeated references to Kashmir to appeal to Britain’s Muslim community that comprised a significant vote bank for the party. However, the party has reinvented itself under Keir Starmer’s leadership. Mr Starmer has declared that Labour would seek a closer relationship with India and the British Indian community, which numbers around 1.8 million and contributes over 6 per cent to the British economy.

 

A trade, security, and tech agenda

Negotiations for the India-UK Free Trade Agreement (FTA) hold bipartisan support and are slated to resume under a prospective Labour government. The FTA aims to double bilateral trade by 2030, currently almost £40 billion, benefitting India’s textiles, apparel, and gems sectors. Yet, sticking points remain, including a reduction in India’s high tariffs, which can reach as high as 100-150 per cent on automobiles and scotch whiskies, and Britain’s desire for greater access to the Indian market for its services sector, which constitutes 80 per cent of the British economy. On the other hand, India seeks greater mobility for its skilled professionals, a politically contentious issue for the Tories who advocated for Brexit on an anti-immigration platform. A Labour government may be better placed to make concessions on mobility-related issues.

The evolving strategic landscape of the Indo-Pacific has resulted in a British pivot towards the Indian Ocean. This is documented in the UK’s Integrated Review Refresh (IR Refresh 2023) strategy that reinforces the UK’s “Indo-Pacific tilt”, and emphasises cooperation with “like-minded” partners such as India to support a rules-based order. This has led to increasing India-UK strategic engagement in the Indo-Pacific, with both countries ramping up maritime presence through joint military exercises, enhanced naval interoperability, and collaboration in maritime domain awareness, counterterrorism, and humanitarian assistance and disaster relief (HADR) activities. Besides deploying assets such as the UK Carrier Group in the region, Britain has also joined the Indian Navy’s Information Fusion Centre in Gurugram.

Building on from Prime Minister Rishi Sunak’s first foreign policy speech where he declared the “golden era” of UK-China ties as over, IR Refresh’s references to China as “an epoch-defining and systemic challenge” has somewhat mitigated India-UK differences, even though the strategy falls short of labelling China a threat.

Yet, despite plans to become the most engaged European power in the Indo-Pacific and increase defence spending to 2.5 per cent of  gross domestic product by 2030, questions about British capacity and resources loom large. There is also uncertainty about whether Labour would continue the Indo-Pacific tilt initiated by the Tories. Moreover, reduced American engagement in Europe may require Britain to focus on its role as a Euro-Atlantic security provider, making a collective approach with partners like India all the more crucial for Indo-Pacific stability.

On defence, Minister Rajnath Singh’s visit to the UK in January 2024, the first such visit in 22 years, provided momentum to the security and defence pillar of the partnership. In 2023, ties were also upgraded to a 2+2 mechanism. However, only 3 per cent of India’s defence acquisitions in the past decade came from the UK, highlighting the scope to do more, particularly in bolstering India’s defence manufacturing sector through sharing advanced technology, but also easing export licensing rules to enable India to reduce its dependency on Russian hardware.

Besides defence, India-UK collaboration in critical areas such as artificial intelligence, semiconductors and high performance computing is also in the works. British firm SRAM & MRAM Technologies has pledged investments of Rs 30,000 crore towards India’s semiconductor ecosystem.

On climate action, the two countries are collaborating to strengthen research and design partnerships aimed at decarbonisation. Additionally, fintech, telecom, startups and higher education are important areas. On cybersecurity, the two nations cooperate through an Enhanced Cyber Partnership. Besides the US, Britain is the only country with whom India holds an annual Cyber Dialogue.

 

Gearing for a fresh era

Despite Britain’s strong support for Ukraine, India’s ties with Russia have not produced significant friction in India-UK relations. Historical irritants such as Pakistan and Khalistan issues that once clouded bilateral ties are gradually being marginalised, paving the way for smoother cooperation.

Prospects for India-UK relations under a revamped Labour party appear promising as Mr Satrmer has made a serious effort in addressing Indian concerns. A third mandate for the Modi government, which has pursued a fresh approach to trade deals with Australia, the UAE and the European Free Trade Association bloc, and the likelihood of greater political stability in the UK post-elections, provide a solid foundation to advance the FTA towards the finish line, especially in the global context of protectionist American and Chinese streaks.

India’s ties with the UK are at an interesting crossroads. Regardless of the direction taken, relations seem poised to continue on an upward trajectory. The UK as a P5, G7 and Five Eyes member continues to enjoy outsized global influence, while India is the world’s fastest-growing economy and most populous country. As both nations attempt to carve out roles for themselves in a volatile emerging order, now is the moment to harness synergies and convergences in favour of the bigger picture.

The writers are, respectively, vice-president for studies and foreign policy, and associate fellow, Europe, at Observer Research Foundation, New Delhi