Easygoing, transparent UK-India relationship has room for expansion

Starmer's India visit strengthens economic and security ties, with £1.3 billion Indian investments in the UK and deeper collaboration in fintech, biotech, and naval operations

The recent visit of the Prime Minister of the United Kingdom (UK), Keir Starmer, to India was meant to emphasise recent developments in bilateral relations, culminating in the signing of the Comprehensive Economic and Trade Agreement (Ceta) in July this year. Mr Starmer was accompanied by the largest ever delegation of businesspeople from the UK to visit this country, and Whitehall has emphasised that during the visit Indian companies have promised investments of about 1.3 billion pounds in the UK economy. Those include an expansion of manufacturing facilities in the north of England by TVS Motor, which acquired British company Norton Motorcycles in 2020. India, meanwhile, hopes to gain access to advanced innovation through new joint projects. The trade deal itself may open up markets for Indian companies, including smaller ones. For example, the gems & jewellery sector, which is likely to be hit hard by the United States’ new trade policies, hopes to double its exports to the UK in the coming years. 

Mr Starmer delivered an address to a fintech conference in Mumbai, an indication that closer ties between both the financial and tech sectors in the two countries are on the horizon. The UK, although struggling with problematic fiscal numbers and a high-cost domestic economy, nevertheless remains a major financial centre and location for technological innovation, especially in biotech and fintech. These strengths are reflected in the nature of the collaboration planned, which is meant to upgrade facilities at the institutions run by the Biotechnology Research and Innovation Council in India and the Indian Institute of Science. Some Indian priorities in the past, however, have been taken off the table. For example, it is unlikely that questions about work visas for Indians will come up in negotiations again, given the domestic political situation in the UK. There has already been a surge of Indian arrivals in the UK, with about 850,000 migrating just between 2021 and 2024. Instead, the Indian and UK governments have agreed to cooperate more closely to ensure the return of illegal migrants. 

A great deal of work, however, remains to be done in order to ensure the implementation of Ceta in such a way that all companies, including micro, small, and medium enterprises in India, benefit from it. Mutual-recognition agreements for professionals need to be hammered out, and these may not be easy since both nations have services-heavy economies. Commitments on e-governance in trade as well as regulatory cooperation will need to be followed up if the full benefits of the trade agreement are to be harnessed. Further work will also have to be done in the security domain. The Indian and the Royal British Navies have exercised together in the past, but there is potential for greater cooperation in the Indian Ocean region, including in triangular format with the French. 

The UK has invested further in its naval base in Bahrain and there is hope that it will be able to step up anti-piracy surveillance and operations, in support of and in cooperation with, the Indian Navy. The India-UK partnership remains one of the most tension-free and transparent from New Delhi’s perspective, and there is considerable room for it to expand further in both the economic and security spheres.