By Jayant Krishna
During the pandemic, Prime Minister Narendra Modi stressed that India awaits the partnership of the global business community in its efforts towards an atmanirbhar (self-reliant) Bharat. This reinforced my belief that deeper UK-India economic cooperation would accelerate the government’s aim of a self-reliant India, while bringing benefits to the UK as well.
Linked by our shared past and a set of common democratic values, but more forcefully by our shared ambitions of an exciting future, India and the UK are two great allies and very close and significant economic partners.
India is the second largest investor into the UK, behind only the US. At the same time, the UK has been the second fastest growing G20 investor into India in the last decade. Trade between the two countries rose by nearly 10% (to £24 billion) in 2019—much faster than the growth in global trade. Indeed, the Indian government understands the importance of global economic inter-linkages, made clear by finance minister Nirmala Sitharaman’s insistence that atmanirbhar Bharat means “integration, not isolation.”
Ambitious reforms and a new approach were probably needed even before the pandemic, with the UK forging an independent trade policy after leaving the EU and the Indian economy facing challenges of its own. The pandemic, though, has added not just urgency, but also new and additional dimensions to the UK-India partnership. No wonder, taking on the role as the group CEO of the UKIBC at this time is particularly challenging and exciting.
For example, the accelerated use of digital technology and the need to expand healthcare provision are two of the more obvious trends that will shape the future relationship. There are others and it was music to my ears that—when underlining the importance of global cooperation—Prime Minister Modi highlighted the centrality of sectors such as manufacturing, infrastructure, energy, pharmaceuticals, space and defence. These are all areas that are ripe for India-UK collaboration in creating atmanirbhar Bharat, underpinned by both the countries’ strong track record in technology and innovation.
In manufacturing, the UK already has a great presence in India, with the likes of Perkins Engines, JCB, BAE Systems, GlaxoSmithKline and Rolls-Royce well established. The UK’s rich research and development ecosystem, coupled with the desire of UK businesses—from SMEs to large conglomerates—to enter and expand in India, is a recipe for further success. At the same time, Indian businesses like Tata, TVS and many others are simultaneously establishing and expanding in the UK.
Advanced engineering and technology also have the potential to support climate goals of both the countries—be it for clean air, industrial waste, or renewable and more efficient energy. With India fronting the International Solar Alliance and the UK hosting the UN climate conference in November 2021, both are taking leading roles and can support each other’s domestic energy and climate goals.
And the opportunities in healthcare and life sciences are tremendous and crucial. Accessibility, efficiency and quality of healthcare have never been more important. The collaboration between the Oxford University, the UK’s AstraZeneca and the Serum Institute of India is evidence of the kind of untold potential when British and Indian institutions work together. All are working on one of the world’s most promising Covid-19 vaccines. This combination of R&D and manufacturing prowess is huge, and the world is watching with avid interest.
The UK and India must also look at opportunities emanating from the business sentiments worldwide to explore manufacturing supply chain possibilities as alternatives to China. And lastly, in defence, there are strong UK-India partnerships already in place and there is appetite in both the countries for more.
The government of India recently raised the FDI cap for investment in the defence sector from 49% to 74%, which is partly why a recent UKIBC event attracted 160 innovative, IP-rich defence companies and why there was such a high-powered and successful minister-led UK delegation to DefExpo in Lucknow in February 2020.
The B2B connects are strong, and the UK and Indian governments have the right ambitions and approach to maximising their shared economic potential. This was obvious at the Joint Economic Trade Committee (JETCO) in July 2020, when both the governments committed to an enhanced trade partnership, seen as a roadmap to a future FTA as proposed earlier by Prime Minister Boris Johnson. The journey will start by focusing on incremental market access reforms that grow trade, investment and prosperity. This blend of pragmatism and vision is just what businesses want, and there is a great deal of enthusiasm to build on this announcement before ministers meet in autumn for the next round of JETCO discussions.
Much like the rest of the world, the UK and India currently face stern economic challenges. But it is clear that the complementarities the UK and Indian economies enjoy mean that by tackling those challenges together we will emerge sooner and stronger. When countries come together on the right terms, all stakeholders benefit, and the UK and India have come together more than most.
The author is group chief executive officer, UK India Business Council