Building Bridges: Reawakening UK-India ties Contents

5Global governance

34.In 2018, Prime Minister Modi committed India to promoting a “democratic and rules-based international order”.108 However, UK and Indian stances sometimes diverge. India is sensitive about steps that could be seen as impinging on state sovereignty, and sometimes sceptical about Western interpretations of universal human rights standards.109 Despite these divergences, the two countries “will very often be on the same side”.110 As Ranjan Mathai put it: “We have accepted the rules of the game, and we continue to subscribe to them.”111 However, there is frustration in India that its emergence as a global power is not reflected by the existing multilateral system, which was devised to reflect the global distribution of power after the Second World War.112 In particular, the country has pushed for a permanent seat on the UN Security Council, and a greater voice in the World Bank and International Monetary Fund (IMF). It is important for the bilateral relationship that the UK supports India’s efforts to gain appropriate status and powers within multilateral bodies.113

The UN

35.In 2014, Prime Minister Modi told the UN General Assembly that an unreformed Security Council faced “the risk of irrelevance”, arguing that “institutions that reflect the imperatives of the 20th century won’t be effective in the 21st.”114 The UK is a longstanding supporter of India’s campaign for a permanent seat,115 though we heard evidence that this is unlikely to be successful in the near-term, and that failed attempts at reform could damage the legitimacy of the UN.116 Our evidence suggested that, in the absence of reform, the UK could take steps to make the Council more transparent and accessible to India and other states.117 India’s push for reform is taking place in a context where the UK is facing increasing difficulties exerting its influence at the UN.118 The unexpected 2017 victory of India’s candidate to the International Court of Justice over the UK candidate illustrates changes in the two counties’ global standing. It was hailed in the Indian media as a sign of the UK’s diminished status, and of India stepping up to play a larger global role.119

Economic institutions

36.There is a mismatch between India’s importance and its status in multilateral organisations, especially global economic governance bodies. India’s economy is expected to overtake those of the UK and France in 2019, and yet it is not a member of the G7, and has pressed for a greater voice at the World Bank and IMF.120 Sir James Bevan told us that India would be “increasingly unhappy about the inner councils of the G20”, and will “rightly want a greater say in the economic governance of the world. That is entirely fair for a country that is going to be third biggest economy by 2030.”121 Witnesses highlighted India’s turn towards alternative multilateral economic institutions as a response to the lack of effective reform to the existing bodies.122 These alternative institutions include the Asian Infrastructure Investment Bank (AIIB), founded by China in 2016, and the New Development Bank (NDB), founded by India along with Brazil, Russia, China, and South Africa in 2014. Dr Reuben Abraham told us that the creation of these bodies was a manifestation of the failure of the Bretton Woods system—i.e. the World Bank and the IMF:

“Unless these institutions begin to reform rapidly, a completely different architecture will start to emerge. That should be a cause for worry in the West. In a rules-based system, whose rules do you want to play by?”123

37.India is an important ally for the UK in defending the rules-based international order. At a time when the existing system is facing increasing challenges, India—as a fellow democracy that is explicitly committed to upholding the rules-based order—offers an important source of support. If China wants to change the rules of the game, India is seeking a seat at the table. The UK and India have differences over certain global governance issues, including around human rights. These divergences make it still more important for the UK to work closely with India in multilateral forums, to influence the path that it takes as it emerges as a leading power.

38.India is rightly anxious for its rise to be reflected through reform to international institutions. It is in the UK’s interest to support these reforms. Helping India to gain a permanent seat on the UN Security Council would bolster the democratic voices on the body, and contribute to building a stronger relationship between the UK and India. However, this is unlikely to be successful in the near term. Without progress, the UK’s commitment to Security Council reform risks ringing hollow to Indian policymakers. In its response to this report, the Government should set out its assessment of the likelihood and timescale of a permanent Security Council seat for India, and the steps it is taking to achieve this. In the meantime, the UK should seek alternative ways to support India’s efforts to gain status and recognition at the UN. The FCO should work with Indian government officials to identify and implement concrete actions to make the Council more transparent and accessible to India. In its response to this report, the Government should also set out what it is doing to ensure that India’s rise is better reflected in global economic governance bodies.

The Commonwealth

39.The Government has said that the Commonwealth provides a “huge opportunity for a Global Britain”.124 India now makes up more than half the population of the Commonwealth, and is a “key pillar” in the organisation’s success.125 New Delhi has signalled an interest in deepening its engagement with the Commonwealth.126 Prime Minister Modi’s attendance at the Commonwealth Heads of Government meeting in London in 2018 was the first time in nearly a decade that an Indian leader had taken part.127

40.Any deep re-engagement from India may require changes to the structure of the Commonwealth.128 Ranjan Mathai said that India was interested in how the organisation could be “revived as a new body” with a “very much bigger role” for India.129 This could include decentralisation and sharing of leadership.130 A greater Indian role may also mean changes in the Commonwealth’s priorities. The Indian government has spoken of its wish to move the organisation away from a focus on human rights, and towards a greater emphasis on economic development.131 The Commonwealth could be used to address areas where the countries’ interests align, for example the promotion of trade and investment; maritime issues; and joint development initiatives in Asia and Africa.132 India’s perception of the UK’s commitment to the Commonwealth may be a factor in its decisions around engaging with the institution.133

41.If the Commonwealth is to remain relevant India needs to be involved in setting its direction. Prime Minister Modi’s attendance at the 2018 summit signals India’s interest in engaging with the organisation. The UK should act fast to capitalise on this interest, opening a dialogue with India about its goals and what it wants from the Commonwealth. However, it is important to acknowledge that there may be challenges around diverging goals and ideas for the organisation’s future between the UK and India, particularly on the topic of human rights. The FCO should work to ensure that India is more engaged with the Commonwealth, and design measures to involve it more closely in the leadership of the organisation. This could involve decentralising Commonwealth bodies so that more of its operations are run from India. Supporting the candidacies of Indian nationals to senior positions within the Secretariat may also help to encourage Indian engagement. Proposals for India’s future role in the Commonwealth should be framed in terms of Indian priorities, including its deepening interest in infrastructure initiatives in Asia, development initiatives in Africa, and the ability to engage with a wide range of states. It will be essential for the UK to make a serious commitment to its role in a rejuvenated Commonwealth if it expects India to do the same. In its response to this report, the FCO should set out the tangible steps it will take—with timelines—to enhance India’s engagement with the Commonwealth. Specifically, it should give an update on the progress of reforms to the Secretariat, and its assessment of their implications for India’s role.

108 Indo-British APPG (GBI0016), para 20; Text of Prime Minister’s Keynote Address at Shangri La Dialogue, Government of India, Prime Minister’s Office, 1 June 2018

109 Q28 [Sir James Bevan]; Q76 [Dr Reuben Abraham]; Q180 [Professor Kate Sullivan de Estrada]

110 Ranjan Mathai (GBI0036), para 10

111 Q181 [Ranjan Mathai]As one witness put it, India has “a very Western value system”, “much more than the Chinese value system”.Q57 [Dr Reuben Abraham]According to analyst Alyssa Ayres: “India does not seek to overturn the global order; rather, it merely wants such institutions as the UN Security Council, the Asia-Pacific Economic Cooperation (APEC), the World Bank, the IMF, the Nuclear Suppliers Group, and others to expand to accommodate it.”
Will India Start Acting Like a Global Power?, Alyssa Ayres, Foreign Affairs, November/December 2017

112 Q27 [Rahul Roy-Chaudhury]; Q180 [Professor Kate Sullivan de Estrada]; Q181 [Ranjan Mathai]
Sir James Bevan told us that India’s approach to multilateral organisations was becoming “more interventionist and more activist”, and that this would be good for the UK.
Q28 [Sir James Bevan]

113 Dr Reuben Abraham told us that if the UK could enable India’s rise, it would “mean a lot to the political establishment in India”, while Professor Sullivan de Estrada said that this could offer a “unique space” for an India-UK partnership. In his 2015 address to the UK Parliament, Prime Minister Modi emphasised this point, telling parliamentarians that “your support has made it more possible for India to take her rightful place in global institutions”.
Q34 [Sir James Bevan]; Q78 [Dr Reuben Abraham]; Q145 [Dr Rudra Chaudhuri]; Professor Kate Sullivan de Estrada (GBI0033); Ranjan Mathai (GBI0036), para 3; Full text of PM Modi’s address to British parliament, Times of India, 12 November 2015

114 Statement by H.E. Narendra Modi, Prime Minister of India, General Debate of the 69th Session of the United Nations General Assembly New York, 27 September 2014

115 FCO (GBI0015), para 59

116 Oral evidence: The UK’s Influence in the UN, HC 675, 19 December 2017, Q48 [Lord Hannay]

117 Professor Kate Sullivan de Estrada (GBI0033), para 23; Professor Kate Sullivan de Estrada (GBI0044).See also: Oral evidence: The Foreign and Commonwealth Office’s human rights work, HC 874, 6 March 2018, Qq14–15 [Natalie Samarasinghe]
We also heard evidence suggesting that the UK’s support for India’s bid to join the Nuclear Suppliers Group was more likely to bear fruit that the push for Council reform.Q181 [Dr Rudra Chaudhuri]

118 2017 elections to the International Court of Justice, HC 860, 27 February 2018; Global Britain: Human rights and the rule of law, HC 874, Foreign Affairs Committee, 5 September 2018

119 Professor Kate Sullivan de Estrada (GBI0033); Why Britain lost to India in bid to elect judge to the ICJ, Hindustan Times, 22 November 2017; India’s changing approach to global governance, LiveMint, 24 November 2017

120 Q78 [Dr Reuben Abraham]; India Dialogue (UEA) (GBI0035)
Dr Rakesh Mohan, a former executive director on the IMF board, has written: “The centre of gravity of the global economy is shifting back towards Asia from the North Atlantic. This change however, is not reflected in the framework of global economic governance […] Regular quota reviews will also ensure that emerging powers get their rightful share in the IMF’s governance. […] The IMF governance structure needs to become more inclusive – the informal agreement that the IMF must be headed by a European national must to revisited to allow other nationalities to be given a fair chance.”Emerging Powers and Global Governance: Whither the IMF?, Dr Rakesh Mohan, Brookings India, 2016

121 Q35 [Sir James Bevan]

122 We received evidence citing economist Dr Arvind Virmani as stating that the IMF and World Bank “do not reflect the rising size and importance of India […] When countries are not given their due share you get things like the New Development Bank”.Q180 [Professor Kate Sullivan de Estrada]; India Dialogue (UEA) (GBI0035)

123 Q70 [Dr Reuben Abraham]

124 Memorandum from the Foreign and Commonwealth Office, March 2018 in Global Britain, HC 780, Foreign Affairs Committee, 12 March 2018; Commonwealth has key role to play in the bright future for Britain: article by Boris Johnson, FCO, 12 March 2018

125 FCO (GBI0015), para 61

126 Modi and CHOGM 2018: Reimagining the Commonwealth, Professor Harsh V Pant and Akshay Ranade, Observer Research Foundation, 18 April 2018

127 Modi’s visit was a “clear sign” that India wants to be engaged in addressing shared global challenges, according to the FCO. Ranjan Mathai said that the visit showed India’s willingness to take a “fresh look” at the institution.Qq184–185 [Ranjan Mathai]; We need to embrace the opportunities provided by being in the Commonwealth family, Lord Ahmad, India Inc, 15 January 2019
Our evidence highlighted several attractions of the Commonwealth for India: it does not include China, it allows India to interact with smaller states, and many of its members have substantial Indian diasporas.Q36 [Rahul Roy-Chaudhury]; Q184 [Ranjan Mathai]

128 Q36 [Sir James Bevan]

129 Q184 [Ranjan Mathai]

130 Q184 [Ranjan Mathai]; Q187 [Minister Field]; Royal Commonwealth Society (GBI0011); Ranjan Mathai (GBI0036); India Set to Take on More Commonwealth Responsibilities, The Wire, 16 April 2018; Modi and CHOGM 2018: Reimagining the Commonwealth, Professor Harsh V Pant and Akshay Ranade, Observer Research Foundation, 18 April 2018

131 Oral evidence: UK foreign policy in changed world conditions, House of Lords, Select Committee on International Relations, 9 May 2018, Q120 [Rahul Roy-Chaudhury]; Indian High Commissioner: My country ‘stands ready’ to re-energise the Commonwealth for the common good, The House, 13 April 2018
As one Indian analyst put it, the Commonwealth should “avoid pushing democracy and human rights down the throats of other states”. India’s Commonwealth, C. Raja Mohan, Carnegie India, 18 April 2018

132 Q184 [Ranjan Mathai]; Chatham House (GBI0017), para 14

133 Q185 [Ranjan Mathai]
In a 2018 report, we argued that it would be difficult for the UK to convince its Commonwealth partners that it is serious about the rejuvenation of the organisation, beyond simply increasing trade with its most attractive economies, without additional resources being dedicated to the institution and to UK relations with its members. The FCO told us that reform of the Commonwealth Secretariat was an essential part of rejuvenating the body.
Global Britain and the 2018 Commonwealth Summit, HC 831, Foreign Affairs Committee, 5 April 2018

Published: 24 June 2019