Last week was a very historic week in the history of the Commonwealth and indeed an important week for the leadership of Britain in the world as a force for progress and prosperity. The Labour Party has a proud history with the Commonwealth also – it was under a Labour Government headed by Clem Attlee soon after the 2nd World War that we saw the move from the colonial empire into a multi-racial Commonwealth that is now a unique group of 53 countries.
The visit of the Indian Prime Minster underlined the importance of the long standing relationship between Britain and India. There are hundreds of thousands of Indian immigrants living in the UK with diverse backgrounds, cultures and faiths, and Indian owned businesses are a vital part of the British economy. I am incredibly proud of the contribution and success of the Indian Diaspora to the British economy and public life, and our contribution to one nation where all communities are valued and have a stake in Britain. The India Diaspora in the UK is one of the largest ethnic minority communities in the UK at around 1.8 per cent of the population, contributing 6 per cent of the country's GDP. Our history as nations together, our cultural ties and our focus on a shared future have been an important part of CHOGM. For the potential of this to be realised, we need to keep that renewed focus – through our politics, our trade and our diplomatic relations. Narendra Modi has been Prime Minister of India for four years, elected on a platform of promising to end corruption and rejuvenate India's economy. In government, Prime Minister Modi’s economic policy has focused on liberalising foreign investment rules, reforming the system of state subsidies, simplification of the tax system and investment in infrastructure.
There are some positive approaches to a positive national agenda that encompasses India’s strength in its diversity including Make in India, Skill India, Start-up India. These are approaches that Britain can learn from as we seek to energise our manufacturing and entrepreneurial base. But keeping our economic links strong requires our relationship to be strong and to address issues such as post study work visas with a clear focus on the future. This is a matter on which I have written to Theresa May. Our UK-India trade relationships are challenges that go beyond individual Governments and are a joint responsibility with joint leadership to create a shared prosperous future.
The range of our trade gives real hope for expansion in the future. In 2016, the UK largest import from India was apparel and clothing accessories, valued at £1.1 billion, representing 19% of all UK goods imports from India. Other exports to the UK included medicinal and pharmaceutical products, valued at £393 million (6.4% of goods imports) and appliances, valued at £0.6 billion (8% of goods exports) and general industrial machinery, valued at £0.4 billion (6% of all goods exports).
India’s rapid economic growth, its accession to the WTO in 1995 and its lowering of tariffs on imported goods, have led to a dramatic rise in trade flows over the past twenty years. Trade with the UK has also risen over this period, through from a low base. However, India on a GDP per capita basis ranks 151st out of the 186 countries the IMF has data for. A challenge for the Modi government is that growth has been insufficient to absorb the growing labour market – around a third of 15 to 29 year-olds are not in employment, education or training. These challenges are common to many nations but more acute in India with its demographic changes. The challenge it presents is also an opportunity and an indication of how it is open nations confident in their people and their place in the world which must work together for shared opportunities and shared prosperity.
I am incredibly proud of the contribution and success of the Indian diaspora to the British economy and public life, and the role of the diaspora in helping build the link that keep our historic and cultural links strong and provide solutions to achieve our common goals. Engaging the diaspora in our future national trade strategy should a Government priority. A strong India - UK relationship has the potential to be a strong east-west axis for global peace and prosperity. We need to invest particularly in relationships between our businesses and the next generation with a compelling vision of our shared future, and deal with challenges we both face on ensuring equality between gender, race and religion. Prime Minister Modi’s visit has brought an opportunity to take that next step.
