David Cameron’s second visit to India in two-and-half years symbolises a reordering of the old asymmetric model of bilateral relations. Britain is phasing out its development aid to India and courting it as a potential buyer and investor in the hope that it can make up for lost markets and sources of capital in a crisis-ridden western world.
The British prime minister is in India amid fears that Britain is drifting towards a ‘triple dip recession’. India’s growing security needs and import of high-tech weaponry, its enormous consumer base, and its potential to absorb FDI for infrastructure modernisation and financial services are the main points of attraction for recession-battered European nations, which are logging one visit after another to New Delhi. Cameron is in India right on the heels of French President Francois Hollande, who had a similar economics-heavy brief.
To an extent, the explosion of expectations about India has been dampened by the recent slowdown in our GDP growth and setbacks to foreign investors. Cameron is believed to be carrying concerns about two major tax liability cases involving British companies — Shell and Vodafone — which are disputing the Indian government’s levy of evasion charges. Britain must realise that India has relatively strong states that are vigilant against being short-changed by multinational corporations. While diplomatic intervention may help the parties arrive at a settlement, India is sending a clear message. Welcoming FDI is not an invitation to bypass regulation.
Though Britain has a massive financial services industry that wants a piece of India’s insurance, pensions and banking pie, it must first concede that India is not a deregulated paradise where speculative bubbles can be floated. The British government must also do more to curb corrupt practices by its defence companies seeking business in India. AgustaWestland-like scams won’t bode well for joint cooperation in the military sphere.
Like China, India is signalling that it will accept western financing, but on its own terms and in areas of priority. Cameron’s visit is likely to rev up talks about British corporate involvement in financing the proposed Mumbai-Bangalore and Bangalore-Chennai industrial corridors. By playing a pivotal role in infrastructure, Britain can help ease the discomfort India feels when its ports, power-grids and highways get built with Chinese cash.
Cameron is touring India at a time when there is a heated debate inside Britain over curbing immigration inflows. Cameron’s comments that there is “no limit” on student visas for Indians, and that there is “no limit” to Indians staying on and working in Britain if they get ‘graduate-level jobs’, are hot-button topics in Britain’s present political climate. Most Indians agree that visa streamlining will boost people-to-people relationships, but the stubborn unemployment battering European countries means that a fresh wave of immigration will perhaps not be a big factor motoring Indo-British relations.
While promoting business opportunities, Cameron must boost the softer facets of what he calls a “really special relationship”. Overall, a mature and egalitarian tone informs contemporary India’s ties with Britain. From a crown colony to joint leaders of the Commonwealth, London and New Delhi have come a long way.
Sreeram Chaulia is dean, Jindal School of International Affairs
The views expressed by the author are personal