Britain ups Modi charm offensive: What’s there for India?

British Foreign Secretary Philip Hammond’s two-day visit to India is aimed at scaling up economic and security cooperation with Asia’s third largest economy.

He has a packed agenda in India, which includes, among other things, inaugurating the British Deputy High Commission in Chandigarh and a visit to Gandhi Darshan museum (ahead of the unveiling of the Mahatma’s statue in Parliamentary square soon after). Most important, Mr Hammond’s talks in Delhi with his counterpart will set the stage for Prime Minister Narendra Modi’s maiden visit to London later this year.

Meanwhile, Finance Minister Arun Jaitley will be visiting London to promote the Make in India programme (focussed on rejuvenating the stagnant manufacturing sector and bringing in FDI) and inaugurate Mahatma Gandhi’s statue at the Parliament Square later this week. There were speculations that the UK government has wanted Mr Modi to do the honours on 30^th January (Martyr’s Day), but due to President Obama’s Republic Day visit, the plan fizzled out. Mr. Modi first met Mr. Cameron at the Brisbane G-20 Summit, where he extended an invitation to the Indian prime minister to visit the UK. Earlier, Foreign Minister Sushma Swaraj had travelled to the UK in October to participate in the Regional Pravasi Bharati Divas in London, where she too had appealed to the diaspora to invest in India.

India-UK relationship

India and UK have a multi-dimensional engagement across economic, technological, cultural and political domains, but trade and investment remain the major thrust. The high level meetings point at a warm relationship, but it seems to have plateaued over the years with India looking more towards the US, China and East Asia for trade partnerships. During their meeting in Brisbane, Mr Cameron said that relations with India were “top of the priorities of UK’s foreign policy” and extended an invitation to Mr. Modi’s to visit the UK. The UK has been struggling with the widening trade gap and Mr. Cameron sees close relations with India as a way to revive exports. Mr. Modi is now expected to visit the UK only after the parliamentary elections in May, where he would pitch for investment in flagship programs of the government.

With the parliamentary elections around the corner, the forthcoming foreign minister’s visit may be more of a photo op with symbolic stops at the Gandhi museum and inauguration of the diplomatic mission in Chandigarh. Old promises of closer muti- sectoral ties will be reiterated, though his presence at the British Business Group meeting may show the seriousness of the government to ramp up economic relations.

The UK Foreign Secretary mentioned that the UK-India partnership is indispensable for “prosperity and security” of both. This seems to be an overstatement. India does have a strategic partnership with the UK, but it has strategic partnership with 30 other countries. And in the changing global scenario, all are not equally important. India does not feature too much outside the economic and cultural aspect of UK’s foreign policy. The UK does hold a UNSC seat and backs India for a permanent membership, but its own position seems anachronistic in today’s changed world order. The UK’s defence policy mostly toes the line of US, and India is already moving towards closer security relations with the US.

Economic Diplomacy

All high-level meetings have focussed on the economic agenda. Ms. Swaraj has called for a vigorous participation in India’s “growth story”. The ‘Make in India’ programme has been received well in the UK, with the government there announcing the ‘Great Collaborations’ program to foster partnerships between businesses over sectors as energy, healthcare, advanced manufacturing, financial services and infrastructure. Measured by FDI, the UK is already the biggest G20 investor in India, having invested $3.2 billion. The investments are not a one way street, with India being the seventh largest investor in the UK economy investing in automobiles, pharmaceuticals etc. With the ease in FDI norms for the defence sector, the UK is eying India, the largest arms importer in the world, for developing partnerships in the area.

Engaging the diaspora

The Modi government has been focussing on the diaspora and has exhorted them to be a part of the India growth story by investing in flagship development schemes. It has struck a chord with prosperous Indian expats in UK (1.8% of the population, account for a large portion of tourist arrivals from the UK). They also have the economic and political clout to make a difference. They had even been excited to receive Mr. Modi with the same pomp and show as was done by the USA expats in Maddison Square. The installation of Mahatma Gandhi’s statute on the Parliament Square is a strong symbolic message to India and the Indian diaspora for continued warm relations before the May elections.

The Way Ahead

Due to historical links, considerable soft power, substantial investments, the pull factor of premier educational institutes (Indians account for the highest number of foreign students in UK universities, though stringent vis norms under domestic pressure, allegations of racism and newer opportunities elsewhere, have caused numbers to drop) and a huge diaspora community in the UK, close relations are here to stay. India does need aid in adopting technical knowhow and skilling the population to achieve its high development targets, and economic engagement would be the way forward. Any big ticket announcements may have to wait, however, till the UK elections get over.

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