Channel: Editor's View Point
Dear Mr. Cameron, what is the significance of an enhanced relationship with India?By Sanmit Ahuja On July 06, 2010
Dear Prime Minister,On 25th May 2010, Her Majesty the Queen mentioned in her speech to the coalition Government, “the UK Government looks forward to an enhanced partnership with India”.This statement is very welcome and signifies an all-encompassing aspiration to improve Britain’s engagement with India on social, geo-political and economic levels.I commend your Government for having identified the weak foundation upon which the current Indo-British economic relationship is actually based. Given the trading history of the two nations, Britain should have a far better relationship with India on all accounts. However, in the last few years, both countries have been behaving like bored and complacent partners. This relationship is in a serious need of a shot of adrenaline in its veins.The last decade has seen major Indian investment into the UK. More recently, the listing of a major Indian conglomerate on the London Stock Exchange would demonstrate that there is a great deal happening between the two nations. British companies, despite facing numerous regulatory hurdles, have also had modest successes in India.The wider media makes these developments to be very significant achievements. They are significant in the corporate finance world, but these isolated instances do not reflect the true nature of the economic undercurrents. The reality is that these transactions would have anyway happened in the normal course of international business. Indian companies have been on the prowl for the last decade, snapping up global assets, a trend that is only likely to grow in the coming decade. Britain may well have been a beneficiary of a part of this outbound investment but it is also guilty for merely settling for the easy pickings. It hasn’t dug in deep to find gold, which in this case is a much larger share of the massive Indian domestic market.Indian economy is growing at an enviable rate of over 8 per cent per annum. In its quest for greater and sustained growth it needs to build infrastructure for which it needs new technology, international expertise and significant investment capital. British companies can offer all this but so far have not been able to fully embrace emerging and high growth markets such as India.For the last three decades Britain has mostly concentrated on Europe and North America for its economic ties. However, now a much larger seismic shift is taking place. A new world order is in formation in which the G7 nations will no longer remain the sole economic powerhouses. The world has already recognised that the future lies in the G20 economies. British companies must do the same.In India, you have a golden opportunity to resuscitate the sluggish economic fortunes of British companies. There is no reason why bilateral trade between India and the UK cannot be four times of the current level. There is no reason why the two nations cannot come together in developing joint innovation models to tackle climate change, develop new drugs and create a bank of intellectual property that will benefit both nations in generating wealth and employment and create conditions for progress.As you prepare to travel to India later this month you and other senior members of your cabinet will no doubt be developing a strategic framework within which to engage with India. In trying to make amends to the lukewarm economic relationship, you must not settle for modest objectives. The resurgent India does and will not settle for modesty. The country has grand ambitions and needs partners who will help them achieve these stellar goals.
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