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There has been a significant improvement in economic relations between the UK and India since the 2006 report from the Trade and Industry Committee, which urged greater engagement with India. Both Government and private sector bodies have worked to achieve this. The sizeable investments and deals made both by Indian companies in the UK and British companies in India are encouraging signs of a deepening relationship which should benefit both countries. The establishment of the UK-India Business Council is perhaps the most tangible manifestation of this. This new report welcomes the improved climate, but identifies areas for further work.
Recent shocks to the world's financial markets should remind policy makers and business people that nothing can be taken for granted. India's economy has recently enjoyed growth rates of around 9% a year; it is possible this will slow slightly in 2008 and 2009. The country faces significant challenges, such as real poverty, poor infrastructure and public sector bureaucracy. However, as our predecessors noted, the Indian market is liberalising. India is an emerging market with much to offer. It would be wrong to pretend that no barriers to trade or investment remain, but there are real opportunities for those who are prepared to take advantage of them.
We need to establish a relationship as special with India as the one we have enjoyed with the United States. This will require determination on both sides—and a willingness to address issues both large and small. Not all the barriers to a deepened relationship are on the Indian side. The recommendations in this report on education links, on visas, on the future of JETCO, on the work of UKTI and on trade negotiations need to be seen against this wider backdrop.
The United Kingdom has woken up to India, but progress must not now be slowed in response to global concerns or expressions of doubt about India's future. Even if India grows more slowly than other emerging markets, in a country of over a billion people the opportunities created would still be huge. The United Kingdom is uniquely well placed to take advantage of them, to the benefit of both partners.
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