The year 2022 has been an eventful one for UK-India relations, as the world finally came out of a pandemic, even as new geo-political challenges emerged.
The two countries finally initiated negotiations for a free trade agreement (FTA) and continued to discuss the thorny issue of migration to the UK. Last but not least, there was the momentous development at 10 Downing Street as Rishi Sunak became the UK’s first Prime Minister of Indian heritage – a historic milestone that was celebrated in India.
Promising start for FTA negotiations
The year started promisingly. The last vestiges of lockdown were beginning to be removed, and Britain looked all set to take ties with India to a new level. Ann-Marie Trevelyan, then UK Minister for International Trade, visited India between in January for negotiations for an ambitious India-UK Free Trade Agreement being launched on January 13. This was followed up by then Foreign Secretary Liz Truss visiting India in March to meet with Dr S. Jaishankar, the Indian External Affairs Minister, as well as Nirmala Sitharaman (India’s Finance Minister – equivalent of Chancellor of the Exchequer) and Ajit Doval, the Indian National Security Adviser. India and Britain share a number of security challenges, from terrorism and radicalisation to concerns over China, so it is logical that these topics may have been discussed in those meetings.
Boris goes to India
The Boris Johnson ministry clearly was very interested in taking the relationship with India up to the next level. There were many reasons for this, including a booming Indian economy, the rise of China as a potential threat and not least the strategic imperative of managing Brexit efficiently and making it work in the face of significant economic challenges. The groundwork for a greater partnership with India was slowly being laid under the Johnson government, and the very short-lived Liz Truss government followed the same track; PM Truss had aimed at getting a UK-India free Trade agreement in place by Diwali.
Boris Johnson was a very pro-India Prime Minister, with his April 2022 visit to India yielding a new cyber statement affirming the online world as part of a ‘digital living bridge’ between India and the UK, and an agreement to jointly counter online threats. They also agreed to intensify co-operation between the two countries’ financial markets, which together with PM Modi’s GIFT City project to build a new global financial centre in Gujarat state, shows a lot of promise. Britain also agreed to invest £425mn in green infrastructure in India, which in an era of dangerous climate change underlines the British and Indian emphasis on renewables.
2022 was, however, also a year of seismic political change in the United Kingdom, which was once a byword for political stability. The opinion polls clearly showed that the public had had enough of Boris Johnson, who was guilty of attending parties while the rest of the UK was in in a stressful Covid induced lockdown. A lockdown which he incidentally ordered to bring the pandemic under control. Johnson was forced to reluctantly resign as PM in July, under overwhelming media and public pressure, paving the way for someone new to take over in 10 Downing Street.
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Historic Sunak premiership
The resulting final Conservative leadership election result was much closer than many expected, with Liz Truss winning 57.4 per cent of the Party members’ vote to Sunak’s 42.6 per cent. Despite the setback of losing the race to replace Johnson, Rishi Sunak did not resign from Parliament or leave politics altogether as a defeated candidate could easily have done.
In hindsight, that was an excellent and prescient decision. Truss showed herself to be far out of her depth as PM, with her plan to cut taxes and increase borrowing terrifying the markets and causing economic chaos. She was forced to resign as PM by the Parliamentary Tory Party within weeks, with Rishi Sunak replacing her after both Boris Johnson and Penny Mordaunt both fell by the wayside in an effort to replace her, and MPs clearly wished to avoid the vote going to the membership again. On a colourful, historic Diwali night, Rishi Sunak was confirmed as the Prime Minister, sparking passionate celebrations among British Indians.
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Sunak settles into office
How has the first Indian-origin PM of the UK settled into the office? Many challenges abound for Rishi Sunak, with sharply slowing growth and a major recession on the horizon. The public opinion polls have moved only a little bit, slightly reducing Labour’s high double-digit lead, underlining the scale of the challenge he faces in leading the Tories to an unprecedented fifth term in office at the next general election. However, he has clearly proved to be a significant upgrade on his predecessor, Liz Truss, and it is still possible that his brand of quiet competence can spring a surprise at the next general election.
Sunak almost immediately visited Ukraine, affirming his commitment to that country’s defence amidst Russian aggression. However, he faces a serious geoeconomic challenge; he cannot restore growth to the UK economy without ending the war in Ukraine, which would mean talking to the Russians, facing down the British and American national security services both of whom want to continue to vigorously counter Russia. There is almost no honeymoon period for him, with the public wary of high immigration even as he opens up the UK to talent as part of the reciprocal UK-India Young Professionals Scheme, following talks at the G20 with PM Modi. He has little room to manoeuvre in this regard.
India wants greater ease for its students and professionals, which needs to be balanced against domestic pressures against soaring immigration. How Rishi Sunak squares this proverbial circle may decide part of his legacy. Certainly, it will have a great impact on ongoing UK-India negotiations for an FTA.
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FTA negotiations speed up
Negotiations for the agreement continue to progress promisingly, with International Trade Secretary Kemi Badenoch visiting India this month, against a backdrop of increasing British participation in the Indian economy.
Famous UK brands such as Pret A Manger are expanding into India in 2023, with Pret opening a store in Mumbai. Rapid Indian economic growth is slated to help increase UK exports to India by £9bn.
However, negotiations appear to be heading toward a critical juncture as both countries try to find a mutually acceptable agreement on India’s demand for more visas for professionals. Badenoch was tight lipped on this issue, but there is hope that an FTA can be successfully negotiated over the next year.
The new year shows a lot of promise for UK-India relations and trade. A British Indian PM can hardly not pay attention to India (while being careful not to show bias towards Delhi). He is not going to be the Republic Day guest in 2023 – that honour goes to Egypt’s President, but his first visit to India as PM will be a cause of much celebration among both UK based NRIs and Indians, when it does happen.
With major economic challenges ahead and India holding the G20 presidency, New Delhi is as important to the British strategic calculus as ever. There will be much to watch out for in this corridor for 2023!
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Jeevan Vipinachandran is a UK-based writer and political analyst specialising in political conflict and counter-terrorism. With a Masters in Comparative Politics: Conflict Studies from the London School of Economics (LSE), his core interest is in international relations with a special focus on the rise of India and its impact on the world stage.
*Info: UK-India FTA