2021 has been a watershed year for the UK, with Brexit over and the UK’s world-leading vaccination programme proceeding at pace, our economy is set to fully reopen this summer. Prime Minister Boris Johnson and Prime Minister Narendra Modi agreeing to an enhanced trade partnership with a 10-year road map between the UK and India could not have come at a better time, our bilateral trade relationship will help lock in our promising economic trajectories.
The IMF’s recent report “A Proposal to End the Covid-19 Pandemic” recommended, what is required is a £42 billion investment to rapidly manufacture and distribute 11 billion doses of covid vaccines, to meet the global demand. India, as the largest vaccine manufacturer in the world, is playing and will continue to play a key role in this. And as a home to the finest universities in the world, a collaboration between UK-India institutions is instrumental as witnessed by the success of the Oxford University/Astra-Zeneca vaccine in partnership with Serum Institute in India, the largest vaccine manufacturers in the world.
Today India and the UK are the fifth and the sixth-largest economies in the world, for the past few decades India has been emerging as a global economic superpower. The centuries-old UK-India relationship took a quantum leap earlier this year with the signing of the enhanced trade partnership - with a 10-year roadmap, which included an ambition to double bilateral trade to £50 billion by 2030.
The enhanced trade partnership will lay the foundations for an ambitious free trade agreement between the two countries. It is hoped that progress will be made over the coming months, especially in regard to further liberalisation of the Indian market. India has an enormous and growing consumer market, and in areas such as EdTech and FinTech, of which UK firms will be looking to participate in.
It is also encouraging that India is about to announce the allowing of foreign universities to operate in India, details will be announced soon and this will be a huge opportunity for British universities, including the University of Birmingham, where I am proud to be Chancellor.
On the UK side, the new points-based immigration system should allow more Indian professionals and skilled workers to come to the UK. 1st July was a landmark, where the new two-year post-graduation work visa programme has been reintroduced in the UK, now called the Graduate Visa. I personally spearheaded the introduction of this in Parliament in 2007 and it was introduced in 2008, it was removed in 2012 and thankfully it is back again. I am proud to be President of UKISA (UK Council for International Student Affairs) and the Co-Chair of the APPG (All-Party Parliamentary Group) for International Students, covering all 550,000 international students, with Indian students as the second-highest—the re-introduction of this fantastic initiative will see Indian student numbers rocket over the coming years.
Aside from improving international mobility, a closer alignment between UK and India at the multilateral and national level will help tackle the climate crisis and achieve more sustainable economies of the future.
UK goods and services are perfectly placed to support India’s ambitions to establish a low-carbon economy. India has growing global expertise in renewable energy, especially solar as the world transitions towards a greener economy. The UK’s world-leading expertise in areas such as wind power, heat and hydrogen offer enormous potential for the UK and India to collaborate on projects such as green hydrogen, electric vehicles and battery technologies. I recently made the suggestion that the UK and Indian governments should fund research into climate change and biodiversity, focusing on joint projects between UK and Indian academics and universities over the coming years using the highly successful UKIERI (UK-India Education and Research Initiative) model.
India faced an awful and tragic second wave of the Covid pandemic in May and I was proud as President to lead the CBI (Confederation of British Industry) in its efforts to help India—the response was phenomenal, immediate and inspirational.
The true test of leadership is in times of adversity and the UK and India have stood side by side and we will stand side by side as we build forward better together. I am hugely optimistic about the potential; it is well beyond business. The UK has recently released an Integrated Review of Security, Defence, Development and Foreign Policy and it said right up front that now there will be a tilt towards the Indo-Pacific with India playing a key role as an ally, particularly as the UK looks to join the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) worth £110 billion of trade to the UK.
Bilateral trade between the UK and India is continuing to grow, data from Grant Thornton shows there are 850 Indian companies in the UK with combined revenues of £50.8 billion and growth rates of 40%. Together, these companies employed 116,046 people and paid £459.2 million in corporation tax. They also show 572 UK companies in India, directly employing 416,121 people. These companies had growth rates of 26% a combined turnover of around INR 3,390 billion that yielded tax payments of around INR 173 billion. The potential is huge both ways, including in India’s enormous and growing consumer market.
So, let us seize the opportunities emerging across trade, climate, innovation and health and work together collaboratively across government and business, to truly build partnerships that will deliver prosperity, security and sustainability across both our nations and economies. This is the moment to turn up the gear and propel this historic bilateral relationship to new heights and together create the economies we envisage for the future. 2021 is the start of a new era of the Indo-British partnership.
