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Will European Union follow UK's embrace of Modi for commerce?

Jyoti Malhotra  |  New Delhi 

This column has been modified; please read the clarification at the end

This has been a big week for Europe, even if the UK doesn’t really count itself as Europe; it is still somewhere on the other side of the Atlantic. First came the un-banning of Gujarat Chief Minister Narenda Modi by the UK, proving yet again that commerce usually up-ends human rights, followed by Sweden’s Nobel Prize committee awarding the peace prize to the European Union.

Let us put the UK decision on Modi in perspective, especially as it comes on the eve of the Gujarat elections in December. Everyone knows that Modi will win again hands down, his fourth victory since the Gujarat pogrom in 2002 in which 1,000 people are supposed to have been killed. If the margin of victory is large enough, it will give Modi the electoral push he needs to position himself as a prime ministerial candidate.

Perhaps the UK can then metaphorically clap themselves on the back and say that they thought of it first, this embrace of Modi, allowing him out of the Gujarat closet. But let’s also take a look at a note on UK-India trade statistics from 1855 to the present, prepared for the Private Members Debate in Westminster on January 25, 2012.

According to this note, the level of imports and exports to and from India in 1855, just before the first war of independence in 1857, was just under nine per cent of UK’s trade. By 1860, imports from India had fallen to seven per cent, while exports to India had gone up to about 11 per cent. The fascinating graph climbs up and down: UK exports to India are highest in 1920, about 12 per cent, and remember, this is just after the Morley-Minto reforms.

Then the graph determinedly falls (around 1950, soon after independence, both imports and exports are between 4 and 4.5 per cent) as we enter into the modern era, and by 2010, the graph almost meet again, with exports and imports touching around 1.5 per cent.

Meaning, in 2010, India was the 15th most important destination for UK goods at £4.1 billion and 22nd most important destination for services at £1.7 billion (between 2000 and 2010, imports into the UK from India grew by 250 per cent, while exports into India grew by 140 per cent).

But here is where the data becomes fascinating: In 2000, the US was India’s largest trading partner, accounting for 21 per cent of India’s exports and 6 per cent of its imports, while the UK was the fourth largest trading partner in terms of exports from India and third in terms of exports (5 per cent and 6 per cent respectively).

See what happens by the time you reach 2010: Trade with UAE in terms of exports from India is right on top with 13 per cent, while imports from China are highest at 12 per cent. The US is India’s second most important destination in terms of exports, at 11 per cent, while the UAE comes second with 8 per cent imports. The UK has fallen way behind, as India’s seventh largest trading destination in terms of exports, at 6 per cent, and 22nd in terms of imports, at a meagre 1 per cent.

In the UK for the last four years, the recession has meant that growth has remained at a mere 1.5 per cent. In India, despite the hundreds of scams, growth has persisted at a relatively healthy 6 per cent. The point is that the UK is desperate to export, make money and find jobs for its population.

The move towards normalising relations with Modi is guided by economic considerations, to be sure. That confirms the UK’s long-time reputation as a “nation of shopkeepers”, even though it has tried hard in recent decades to put human rights and principles above everything else. The pogrom in Gujarat, in which UK citizens of Indian origin were killed, has been given short shrift because the UK believes it has a right to engage with a chief minister who has taken his state to great economic heights.

Then there is the Gujarati NRI argument, as many as eight lakh in the UK, who want to see greater connections with back home. Lastly, when Indian industrialists and even India’s most high-profile citizens can fete Modi, then why should the UK be left behind?

Now the question is, will the European Union follow suit, by also making happy noises in favour of Modi? Remember that EU ambassadors in 2002 sought to demarche the Indian government and internationalise the pogrom, but then foreign secretary Kanwal Sibal would have none of it. Sibal refused to accept the demarche, arguing that the Gujarat riots were an internal matter of India.

Question is, with the European Union having won the Nobel peace prize because of its ability to move from war to peace and show itself as a model to the rest of the world, will it also ignore the recent indictment of Modi’s closest aides for their role in the Gujarat riots in favour of the economic argument?

The rest of the world waits, with bated breath, for an answer.

This column had mistakenly said that 10,000 were killed in the Gujarat riots of 2002. The actual number is 1,000, and the column has been corrected. The error is regretted.

First Published: Mon, October 15 2012. 00:28 IST