Will Truss be good for India?
The UK PM-designate’s stand on Free Trade Agreement finalisation and the Indo-Pacific will shape bilateral relations
Conservative Party leader Liz Truss is set to become the third woman prime minister (PM) of the United Kingdom (UK) after her convincing but narrower than expected victory over Rishi Sunak in the race for leadership of the party. She defeated Mr Sunak by a margin of 21,000 votes after a campaign that Ms Truss herself described as hard fought. The party election was necessitated by the decision of scandal-ridden PM Boris Johnson to resign in July, ending months of political chaos triggered by an investigation into parties held at the Prime Minister’s Office during the Covid-19 lockdown. The position that Ms Truss assumes will require her to respond speedily to a wide and daunting range of challenges, not the least of which are surging inflation and a massive squeeze on living standards brought on by soaring energy prices due to the Ukraine crisis. The Bank of England has predicted that the UK will enter almost two years of contraction or zero growth the month after Ms Truss assumes office, with inflation topping 13% by the end of the year. Ms Truss will also have to take a call on the Northern Ireland Protocol Bill, a deal finalised by Mr Johnson in 2019 that allows checks on goods coming into Britain from Northern Ireland.
The full contours of Ms Truss’s plan of action will become clear when she forms her cabinet on Tuesday, but in her victory speech, she promised “bold action” to get the UK through tough times and grow the country’s economy. There is already talk that she plans to freeze energy bills and cut a wide variety of taxes, which could cost her government some 80 billion pounds over the next year — something that is hardly expected to inspire confidence at a time when the markets have been flashing red. On the foreign policy front, Ms Truss will be expected to continue with Mr Johnson’s policy of steadfast support for Ukraine, including the training of troops and supply of advanced weaponry, while clearing the air on her recent remarks that “the jury’s out” when she was asked whether French President Emmanuel Macron was a “friend or foe”. On the trade front with India, Ms Truss’s victory is expected to give a fillip to efforts to stitch up a free-trade agreement by the target date of Diwali. However, policymakers in New Delhi will keep a close eye on whether Ms Truss will continue with Mr Johnson’s policy of a tilt towards the Indo-Pacific, including military deployments and closer maritime cooperation with India. That may be the key driver of strategic bilateral ties.