Booster for Indo-UK ties

Liz Truss has been championing deeper relationship with India; her election as Britain’s next PM is thus good news

Booster for Indo-UK ties
Liz Truss

The election of Liz Truss as the next prime minister of the UK was a foregone conclusion as she had beaten the other contender, Rishi Sunak, in every age category, amongst men and women, and amongst those who voted for Brexit in the run-up to the final outcome. For India, her victory is good news as the PM-in-waiting is known for championing deeper India-UK strategic and economic ties, describing them as a “sweet spot” of the global trade dynamics. After all, it was Truss who, as the UK trade secretary, had signed off on the India-UK Enhanced Trade Partnership in May last year, which marked the starting point of the ongoing free trade agreement negotiations. Given the geopolitical tensions of the past year, especially post the invasion of Ukraine by Russia in February, as also the worrying prospects of a sharp deceleration in global growth and trade, partnerships that would help the Indian economy and polity are to be welcomed.

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PM Boris Johnson’s recent visit to India had resulted in a new and expanded India-UK defence partnership agreement, with the UK announcing an Open General Export Licence for India to “reduce bureaucracy and slash delivery times” to procure defence equipment. Ahead of that, Truss, as foreign secretary, had drawn up the contours of the UK’s renewed engagement with India despite significant divergences over the Russia-Ukraine war, when she told the Foreign Affairs Committee of the House of Commons on March 7 that the ‘way forward’ was a “closer economic and defence relationship with India”. In the course of her campaign, Truss reiterated the call for deeper ties in defence and trade. She wants the trade deal to be wrapped up by Diwali or at least by the end of the year, and wants it to straddle areas from life sciences to technology and agriculture.

Essentially the two countries are looking to double the trade in goods and services to about $100 billion by 2030. The UK will be looking for tariff cuts on cars and whisky and market access in areas including digital and data, and legal services—once the regulations are amended. On its part, India too will be looking for lower import duties, inter alia, on pharmaceutical products and apparel. To be sure, India and the the UK could find common ground on some issues. Truss, for example, wants the two countries to work together to finance developing countries so they don’t become indebted to China. However, there could be differences on Russia. While Truss believes the UK needs to work with countries like India to reduce their dependence on Russian defence, oil and gas and their export markets, it is hard to see New Delhi’s alliance with Moscow weakening.

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Nonetheless, there is much to be gained for both countries from closer economic ties. India is among the top foreign direct investors in the UK and Indian firms play a big role in the British economy. For some time now, New Delhi has been pushing for greater movement of professionals to the UK, and it is noteworthy that Truss has said she will ‘look at the visa system” to ensure the best and brightest in India are attracted to the UK. The UK is among the top European sources of remittances to this country. India must step up efforts to strengthen its relationship with the UK, which supports key industries of tomorrow such as technology and life sciences and around half a million jobs in each other’s economies.

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