David Cameron has spent the last few weeks doing what many of his employers (the British public) have hoped: making blunt statements about Britain’s relationships with countries around the world, in contrast to the previous governments unintelligible spin.
The noticeable focus of recent diplomatic visits and statements has been the sub-continent. It seems the entirety of Britain’s government, the leaders of half the FTSE 100 and our entire back-catalogue of medal-winning athletes has decamped to India for the summer. It makes one think of the enormous logistical efforts when the entire Raj administration would move to the hill stations during the summers of their Imperial rule. The intent of this charm offensive is clear: Britain wants to make sure it has a piece of India’s phenomenal growth of over 7% growth per annum and future potential. India is one of Britain’s best natural allies in the world and an easy place for British business to flourish: There is a British legal, political and administrative system that is the legacy of the Raj; a large number of Indian emigrants live in the UK; English is very widely taught and spoken across India; and there is a high level of respect and admiration among Indians for Britain and its services.
India and Britain’s current links are impressive: India is the 2nd largest job creator in the UK and the UK is India’s largest trading partner in Europe. But there is the potential for so much more. Britain is aware of India’s growth and wants to make sure we’re first in the queue to make the most of it. One of Government’s responsibilities is to promote British companies abroad: make it easier for those companies to do business abroad and to encourage other nations to host British businesses ahead of those of our competitor nations.
Hence Cameron’s trip. He’s there to charm India and set up high-level contracts, such as the multi-billion BAE systems deal, as well as convincing India to use British companies. His minions will be working behind the scenes to get legislation changed and deals sewn up; his entourage will be sniffing out opportunities; others will be encouraging Indian companies to move some of their offices to Britain to stimulate growth and employment here in a wonderful reversal of call-centre outsourcing. It’s a return visit for the Indian President’s state visit to Britain last year, which was followed by the Indian PM’s visit to America. Those visits were an invitation to promote India to the West as an economic alternative to China and as a strategic alternative to Pakistan.
Cameron’s visit is evidence that India has convinced on both fronts. Promoting trade and relations with India now seems to be Priority Number 1 for the Coalition, who must be kicking themselves that Britain neglected the former jewel in the Imperial crown during the Commonwealth years after Independence. Cameron is now trying to leverage Britain’s historical relationship with India. His greatest asset in this is Britain’s resident Non-Resident Indian (NRI) population: the Daily Mail’s greatest terror: immigrants!
These NRIs are the ones really driving Britain’s trade with India. Through family contacts, leverage of labour cost differences and other forms of geo-arbitrage, they are pushing Britain and India’s trade links through family businesses and personal connections. But whereas businesses with Indian links were previously food and fabric, Indian business now includes such giants as Tata, which owns Jaguar and Land Rover; Corus, which owns British Steel; and Mittal, owned by Britain’s wealthiest man, who just so happens to be Indian. India is growing and Britain is trying to get a piece of the action. The question is whether India wants us to have any.