Building Bridges: Reawakening UK-India ties Contents

Conclusions and recommendations

A special relationship?

1.The Government is failing to make the most of this country’s extensive ties with India: the bilateral relationship is strong, but falls short of its huge potential. The Government cannot afford to be complacent or rely on historical connections to deliver a modern partnership. The UK needs to adjust its strategy to India’s enhanced influence and power: we should do more to respond to India’s priorities, and should communicate our own objectives more clearly. As the UK leaves the EU, our foreign policy priorities will change. One change should be enhancing our relationship with India: as a practical and symbolic start to resetting that relationship, we encourage the Foreign Secretary to visit India as soon as possible, and certainly before the end of 2019. (Paragraph 8)

Trade, investment and movement of people

2.As India has boomed over the last two decades, the UK has fallen behind other countries in its share of India’s fast-growing trade with the world. This is an expensive missed opportunity. The Government has said that Brexit will allow for a closer relationship with India, and that the country is central to its aspirations for a more outward-facing Global Britain. However, a full UK-India trade deal is unlikely to be signed in the near term and Indian policy and business communities do not have a clear sense of the UK’s plan to be more open to the world. The challenges of concluding a full trade deal should not mean that the Government places economic ties with India on the back burner. The Government should prioritise trade talks with India and do more to lay the groundwork for an eventual deal. The FCO should lead a bold, well-resourced cross-government initiative to communicate clearly the approach and goals of Global Britain to Indian decision-makers, including the appointment of a champion for UK-India ties. (Paragraph 11)

3.Recent improvements in India’s business environment are impressive, and we hope that they will drive stronger bilateral economic ties. However, there is much still to be done, and UK businesses face a challenging operating environment in India. The Government must improve access to targeted support for UK businesses in India, particularly start-ups and smaller businesses. In its response to this report, the Government should set out what it will do to respond to the criticism that UK businesses were not aware of the support offered by the Government and that accessing such support was a struggle for some. The Government should appoint a high-level and long-term dedicated trade envoy to India, with experience of the country’s business environment. (Paragraph 13)

4.There is a tension between the FCO’s promotion of a “Global Britain”, and some wider Government efforts to reduce net migration. While the Global Britain strategy is barely being communicated in India, the “hostile environment” message is being heard loud and clear. It is short-sighted for the Government not to do more to open doors for Indian entrepreneurs, tech workers, tourists and students, who offer clear benefits to the UK and often plan only a short-term stay. Facilitating the movement of these groups is inseparable from the goal of increasing trade with India. We are concerned that Government policy has been driven by the single-minded objective of reducing net migration, championed by the Home Office, and that the FCO has not been able to play enough of a role in formulating Government policy towards India. The Home Secretary has resolutely stuck to the stated Government policy of reducing net migration “to the tens of thousands”. This is completely incompatible with a post-Brexit immigration policy that will allow unlimited numbers of students, workers within certain sectors, seasonal workers, and key workers. This incompatibility must be addressed as a matter of urgency. The Government cannot achieve both goals, and—given that most post-Brexit trade deals will require a relaxation of current immigration policy—the Government must be honest about which it will prioritise, especially in relation to India. This has led to a lack of coherence, with policies on movement of people undercutting the UK’s broader strategic objectives for the relationship. Certain decisions risk needlessly offending our partners: something has gone wrong if it is more difficult for citizens of a strategically important democracy that shares our values, language, and history to visit or study in the UK than those of an autocracy. The Government told us that it was not “picking winners” in Asia, but its policies on movement of people sometimes suggest otherwise. (Paragraph 19)

5.Foreign policy goals must be balanced against the need for migration controls, but there is no excuse for the policies that have led the UK to lose ground in attracting Indian students and tourists. These groups are vitally important, not just as consumers of a profitable UK export, but as a means of cementing lasting ties between the countries, and generating invaluable goodwill with India’s future leaders. Failure to reverse this trend would squander cultural capital built up over many decades of familiarity, and the international reputation of the UK’s universities and cultural sites. The Government’s recent steps to offer a six-month post-study work visa, and to set a target for increasing international student numbers, are welcome but do not go far enough. (Paragraph 20)

6.The FCO should ensure that the goal of improving the overall relationship with India is woven into the broader Government migration policy. It should push for reforms to make it easier for India’s skilled workers, students, and tourists to enter the UK. This should include offering Indian nationals a bespoke multiple-entry visa on at least equivalent terms to those available to Chinese nationals, and steps to facilitate the movement of skilled Indian professionals for short-term projects. In its response to this report, the FCO should set out its assessment of how far proposals in the Immigration White Paper would meet this goal, and the actions it is taking to feed the outcomes of the recent UK-India Migration Dialogue into the policymaking process. The Government should urgently review its policies towards Indian students, particularly the decision to exclude them from the “low risk” list. It should commit to increasing the post-study visa available to international students to cover at least two years, and should review the possibility of involving universities in visa application processes. Having the UK’s leading universities able to issue a limited number of visas directly to the best Indian students would increase competition at home and decrease bureaucratic hurdles for those looking to develop their skills in the UK. (Paragraph 21)

Security and defence

7.The UK and India’s convergence of interests in the Indian Ocean region offers an important opportunity to increase engagement on defence and security. Though there are tensions over the British Indian Ocean Territory, the two countries share vital interests in the stability of the Ocean and broader Indo-Pacific. As set out in our report on China and the Rules-Based International System, we support the Government’s efforts to increase the UK’s presence in the Indo-Pacific, in line with its capacity and other commitments. The UK and India’s shared interest in promoting rules-based order in the region makes India an important partner in this initiative. The UK cannot have a successful Indo-Pacific strategy without a flourishing strategic relationship with India. Such a relationship has not yet been built. The Government should make greater efforts to engage with Indian ministers, officials and non-governmental opinion leaders on defence, around UK interests in the Indian Ocean. These efforts may be boosted by greater engagement with third partners such as France and Japan, which have established joint initiatives with India in the region. (Paragraph 27)

8.The UK’s efforts to build ties with China, and engage with Belt and Road, should not be pursued at the expense of its relationship with India. India has been clear about its commitment to the rules-based order, while China’s position is mixed, particularly around the promotion of free societies. While the relationship with Beijing is undoubtedly important, the depth of shared values between the UK and India make New Delhi a vital strategic partner for the future. As we noted in our report on China and the Rules-Based International System, economic considerations around Belt and Road’s benefits for the UK should not crowd out questions of our wider strategic interests, values and national security. There is a risk that Chinese investment under Belt and Road could undermine international standards and stability in some recipient countries. India can be a partner in the UK’s efforts to uphold these standards. This does not present a binary choice, as the UK can take part in infrastructure projects led by both China and India. The FCO should take the lead in ensuring that stronger economic ties with China do not harm the political relationship with India. While continuing to engage with Belt and Road projects on a case-by-case basis, the UK should consider supporting connectivity projects in the region backed by India and others, upholding standards of transparency, sustainability and good governance. (Paragraph 28)

9.India’s defence modernisation programme presents an opportunity for the UK to build a closer strategic relationship, and to boost trade and investment. So far, this opportunity has been largely missed and others are doing more to work with India. As a result, the UK has fallen behind countries such as the US and France in its share of India’s large and growing defence imports. France’s development of mutual trust with India on defence and security issues over many years, and the US’s efforts to sign military cooperation agreements, may present lessons for UK diplomacy. The FCO should ensure that the overarching objective of building a closer relationship with India is front-and-centre in Government efforts to enhance bilateral defence ties. As with other areas of UK-India relations, this will require an effort to address India’s priorities, such as developing Indian domestic defence production, rather than simply presenting UK objectives. In defence industry cooperation with India, the Government should aim to build a partnership, rather than merely pursuing a transactional, buyer-seller relationship. This is likely to include efforts to increase joint manufacturing and technology transfers, within the restrictions set by the UK’s international obligations, and closer cooperation on cyber security. In its response to this report, the FCO should set out the steps the Government is taking to achieve this. (Paragraph 31)

10.The recent flare-up in tensions between India and Pakistan is deeply regrettable and dangerous. Given limited official lines of communication between the two countries, it is vital that there are countries that are on friendly terms with both, and can work to reduce tensions. The UK’s ability to maintain good relations with both New Delhi and Islamabad, and be perceived as a credible interlocutor, is particularly important following these clashes. (Paragraph 33)

Global governance

11.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. (Paragraph 37)

12.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. (Paragraph 38)

13.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. (Paragraph 41)

Delivering on UK-India ties

14.The Government should do everything it can to ensure that the past does not act unduly as a constraint on the present-day relationship. We welcome recent efforts to acknowledge publicly and commemorate Indians’ role in the First World War and hope that this will inspire further similar initiatives. There is little excuse for failing to issue an apology for atrocities such as the Jallianwala Bagh massacre. The lack of clarity around the decision is particularly unhelpful. There is little excuse for failing to issue an apology for atrocities such as the Jallianwala Bagh massacre. The lack of clarity around the decision is particularly unhelpful. The Government missed an important symbolic opportunity by failing to issue a full apology on the 100th anniversary of the crime, and should rectify this without delay. The FCO should work with other departments—and with the Indian authorities—to find further ways to explore and commemorate UK-Indian history. (Paragraph 43)

15.The diaspora is a hugely important resource in developing the UK’s relationship with India. Movement of people plays a crucial part in these ties—without easy movement between the UK and India, there can be no living bridge. Improvements to the UK’s visa processes, as set out above, would help build and make best use of diaspora links. There is a limit to how far the UK Government can intervene in organic people-to-people ties, but symbolic gestures can be important in building trust and signalling the UK’s commitment to building a closer relationship. The FCO should do more to work with the diaspora, promoting talent from the community into bespoke roles aimed at engaging with the Indian business and policy communities. This could include reprising the role of Indian diaspora champion, and appointing an advisory council made up of members of the diaspora and others with relevant expertise. The FCO should set out the steps it will take in its response to this report. (Paragraph 45)

16.India’s vast size, diversity, and federal structure, with powerful state governments and regional divergences in the business environment, makes the spread of the UK’s diplomatic network especially important. We welcome the UK Government’s expansion of its presence in India over the last decade. However, it will not be sufficient in isolation. Miscommunications play a part in undermining the relationship, pointing to the need for a more strategic use of UK diplomatic resources in India. The Government has said that it plans to invest greater resources in the relationship after Brexit. In its response to this report, the FCO should set out its plans for these resources, in terms of priorities, personnel, location, and funding. As part of this, the FCO should consider ways to enhance UK presence in India’s smaller cities. (Paragraph 47)

17.The story of the UK’s recent relationship with India is primarily one of missed opportunities. In all fundamental respects, the UK is well placed to capitalise on a mutually beneficial relationship with India—so it is a disappointing reflection on recent UK governments that we have been losing out in term of influence and trade. There are certain practical steps the Government must take to reset its relationship with India, in particular making it easier for Indians to visit the UK and to work or study here. But it is also vital that the Government sets the right tone and sends strong messages. The UK is ready to do business with India, and to work together bilaterally and in multilateral forums as a partnership of equals. In an increasingly unstable world threatened by autocratic states with contempt for the rules-based international system, it is more important than ever before that the UK and India support each other—and our mutual allies. These messages are not complex but they are essential. The Government now needs to communicate them clearly and make sure that their words are backed by actions. (Paragraph 48)

Published: 24 June 2019