By Ashok Sajjanhar
OCTOBER 27, 2016
OCTOBER 27, 2016
Prime Minister Theresa May of the United Kingdom has taken a leaf out of her predecessor David Cameron’s book in that she also decided to make India the first country of visit outside Europe after taking over the mantle of PM in July this year. While Cameron came calling to New Delhi within 10 weeks of his anointment in July 2010, May will undertake her visit to New Delhi next month (Nov 6-8), about 15 weeks after taking over this position.
This signals continuity in policies pursued by Cameron in particular and UK in general in forging vibrant ties with India. In the preceding decade, four Prime Ministerial visits from UK to India — by Gordon Brown in 2008 and by David Cameron in 2010 and twice, in February and November, in 2013 — had taken place with a return visit by Prime Minister Modi in November last year.
During May’s tenure as Home Secretary from 2010 onwards, she visited India once and Pakistan three times. Officials claim this is not because she has any affinity for Pakistan but because she knew where the problem of terrorism lay and needed to be confronted. Soon after becoming Home Secretary in 2010, May had banned the entry into Britain of the controversial Indian preacher Zakir Naik, who was much in news recently in connection with the Dhaka terrorist killings.
May is reported to be well known to both Prime Minister Nawaz Sharif and his brother Shahbaz Sharif, Chief Minister of Punjab. Another connection between Theresa May and Pakistan is that she was introduced to her husband by Benazir Bhutto in 1976 when all three were students at Oxford and Philip May, her future husband, was President of the Students Union.
On assuming the charge of prime minister, PM Modi had called May and congratulated her on her new responsibility. Later the two leaders met on the margins of the G20 Summit in China in last September.
May’s coming visit to India is far-reaching. Because of the vibrant historical, cultural and linguistic linkages and strong business ties between India and UK, there cannot be a better partner for the UK than India. The visit significantly raises stakes for the UK to emerge with a successful outcome. May’s discussions in New Delhi will be watched with keen anticipation and some anxiety not only by the Indian industry but equally so by business, and policy and law makers in London and Brussels. It will be a test case for May whether the UK is able to forge decisive links with major global economies post-Brexit.
Making India as the first port of call makes sense for May as India is the third largest world economy in PPP terms — GDP of US$ 8 trillion — with highest growth rate of 7.6% while most other large economies are witnessing an economic decline or stagnation. India’s healthy macro-fundamentals, low current account deficit and growing foreign direct investment make it an attractive economic partner.
A 160-member strong business delegation drawn from regions across the UK as “examples of the best of British business” will join May to construct a strong partnership.
Modi and May will inaugurate the India-UK Tech Summit in New Delhi on November 7. This will be an opportunity for the two sides to strengthen business-to-business engagement in the areas of technology, entrepreneurship and innovation, design, IPRs and higher education. The two sides had agreed to hold the summit during Modi’s visit to the UK last November.
May will be accompanied by Liam Fox, Secretary of State for International Trade who will also attend the Joint Economic and Trade Committee where UK and Indian leaders, innovators and entrepreneurs will meet to discuss ideas to take the bilateral partnership to next level.
With the impending exit of Britain from the European Union, it is unlikely that the UK will continue to hold the same attractiveness for Indian companies as it has held so far. Thus far Indian companies have viewed Britain as a spring-board for their entry into EU member-states. It is likely that the role and significance of London as the financial hub of Europe will see a decline. Indian companies will have to start relocating to Germany or France or Belgium or Netherlands for a smooth, seamless access to the European market. They might need to establish manufacturing bases and service platforms on the continent to maintain their competitive edge. This might witness a reduction in the number of Indian companies that are currently operating out of Britain.
Contours of Britain’s relations with the EU in coming years are not clear thus far. It will be a while before these become evident. While the UK will negotiate tough to maintain its access to EU market in goods, services, investment etc without giving in to demands for inward migration, negotiators from EU appear equally determined to ensure a ”hard Brexit” in which the UK will not be allowed to cherry-pick areas of interest to it. No deal on bilateral trade between the UK and a non-EU country can be finalised till the UK continues to be a member of the EU. May has declared that Article 50 of the EU Lisbon treaty for UK’s exit from the grouping will be invoked in March next year. From then on, the UK will have two years to conclude talks and agree to a deal with the EU for severance of its links with it.
UK will attempt to commence talks on bilateral Free Trade Agreements (FTAs) with interested countries so that deals are implemented as soon as dissolution of the UK’s ties with the EU are confirmed. It has been suggested by the Confederation of Indian Industries (CII) that it will be easier for India and UK to conclude an FTA unlike the EU-India Bilateral Trade and Partnership Agreement (BTIA) which has been languishing without significant forward movement for the last nine years. Issues like automobiles and spare parts, alcoholic beverages etc which have held up talks in recent years would not figure prominently in discussions between India and the UK. However, the subject of Mode 4 (temporary movement of skilled professionals) will continue to be a sticking point as the fundamental reason for Britain’s ”Leave” Vote was the people’s dissatisfaction with the increasing number of migrants — both from within EU and outside coming to UK. May has also committed that she will bring migration levels down to a sustainable level of below 100,000 per year. Currently it is about 330,000 per annum. This is one area where May as Home Secretary did not succeed. She had set the annual target as 200,000 but could not come anywhere close to it!
Another issue that is likely to receive considerable attention is Britain’s position on cross-border terrorism against India emanating from Pakistan. Because of internal vote-bank politics and the presence of large number of Mirpuri Pakistanis in the country, Britain has been ambivalent in its response to Pak-engineered terrorism. In fact, in response to a Public Petition after the Uri terrorist attack which attracted more than 20,000 signatures, the British government maintained that it recognises the significant sacrifices of Pakistan in confronting terrorism. It would be accurate to state that Pakistan has also suffered at the hands of terrorists, but it is equally, if not more true, that that these terrorist networks have spawned as a result of Pakistan’s own policies. As Hillary Clinton said in her discussions with Hina Rabbani Khar in 2011, ”if you nurture snakes in your backyard, don’t think that they will bite only your neighbour. They will bite you also.” Only unequivocal condemnation and isolation of Pakistan can force it to change its policies. Otherwise, the Pakistan government, its army, its spy agency as well as terrorist groups will think that the international community is condoning their activities.
Visas for students, businessmen, academics and short-term tourists is an area of continuing disagreement between the two countries. May in her capacity as the Home Secretary was not agreeable to remove students from the list of long-term migration category. This issue on which negotiations have been going on for a while could witness some progress. It is expected that May might at least announce the extension of a pilot initiative currently underway in China to offer easier, longer and cheaper visas to Indian tourists. Under the pilot, a UK visa valid for two years is offered for £87; for the same fee, Indians get the visa for a maximum of six months. A two-year visa for Indians costs £330.
Besides her programme in Delhi, May is also likely to visit Bengaluru to familiarise herself with potential for bilateral collaboration in IT, infrastructure, innovation etc.
Modi has called the India-UK relationship an unbeatable combination and talked about how the two countries can come together to create a leading global partnership.
Theresa May’s three-day visit to India will be watched with considerable hope and interest. A successful outcome has the huge potential of providing a shot in the arm to bilateral partnership in diverse areas, including strategic, political, economic, business, social and cultural spheres.
ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.
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