Andrew Hammond: Post-Brexit UK needs India's cash '“ but issues with Modi still remain

Indian Prime Minister Narendra Modi starts a visit to the United Kingdom today in a landmark trip that will strengthen bilateral political and economic ties.

Once banned from Britain, Narendra Modi was accused of involvement in a massacre of Muslims. Picture: Getty
Once banned from Britain, Narendra Modi was accused of involvement in a massacre of Muslims. Picture: Getty

The visit, only the second UK tour by an Indian premier for over a ­decade, highlights the uptick in bilateral bonds, and follows up on his 2015 visit which took place before the Brexit referendum.

Modi has a number of high-level meetings including with Prime Minister Theresa May, the Queen, and Prince Charles. While the ­visit will therefore see top-level UK access, and a separate Q&A style ­televised session with 1,500 ­members of the Indian diaspora in the United Kingdom, it will not be as high profile overall as his 2015 visit. Then he gave an “Olympics-style” address at Wembley stadium at one of the largest receptions for a foreign head of state ever in Britain, and also the largest event outside India ever attended by one of the country’s premiers.

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Both May and Modi attach high importance to the bilateral relationship, not least given Indian’s long historical ties with the United Kingdom and the estimated million and a half Indian diaspora population in England, Scotland, Wales and Northern Ireland. May has already visited India during her premiership and wants UK firms, post-Brexit, to gain stronger access to the Indian market of around 1.3 billion consumers through a new UK-India trade deal.

The strength of the contemporary economic relationship is underlined by the fact that, according to the Confederation of British Industry, the United Kingdom has already invested well over 22 billion US dollars in India since 2000, making it one of the biggest G20 employers and investors in the country. India, meanwhile, is one of largest sources of foreign investment in the United Kingdom.

During the trip, several large new business deals will be announced, building on Modi’s first visit when bilateral cooperation in defence manufacturing was a prime focus of the visit.

That formed part of what was a wider security and defence dialogue with then-UK prime minister David Cameron. For the Indian premier, encouraging international investment, via the City of London, to finance Indian infrastructure is another key priority. This will build on the announcement made during Modi’s last trip over the sale on the London Stock Exchange of rupee-denominated offshore “masala-bonds” to finance infrastructure investment, including in Indian housing and railways.

In addition, Modi will reportedly launch the India-UK Tech Alliance comprising young CEOs from the two countries, and also ­continue to promote support for the ­Digital India initiative, which aims to ensure that government ­services are made available to citizens ­electronically by improving online infrastructure and by increasing internet connectivity. To this end, he will seek further telecoms and ­technology investments in India by UK-headquartered firms.

One of the other key ­economic issues Modi will press for is UK immigration reform to enable more Indian business people and ­students to travel to the United Kingdom. This may be made easier by the agreement between London and New Delhi on swifter return of illegal Indian immigrants which had been a vexed issue repeatedly raised by the UK Government.

A related opportunity that will be discussed by Modi and May is the possibility of formal Indian recognition of one-year UK-based ­masters degrees that are secured by an ­estimated 14,000 Indians students each year. Currently, however, New Delhi does not fully recognise these programmes given such masters programmes are double the length (two years) in India.

Despite the overall positive ­diplomatic mood music of the trip, a number of political irritants remain in bilateral relations. For instance, there was a debate in Westminster earlier this year in which MPs asked that May raise with Modi the treatment of Sikh and Christian minority groups in India, and various groups – including the Sikh Federation UK – will protest during the trip.

The recent Westminster debate follows up on a 2015 motion signed by around 40 MPs calling on then-premier Cameron to raise human rights issues with Modi. In 2013, there was also a UK parliamentary motion calling on the Home Office, which is responsible for immigration policy, to reintroduce a UK ­travel ban on Modi citing “his [alleged] role in the communal ­violence in 2002” in Gujarat.

Under this ban, which was rescinded in 2012, the now-prime minister was not allowed to enter the United Kingdom due to his alleged involvement in the massacre of Muslims in Gujarat in 2002 when he was the state’s chief minister. Modi has also been accused of failing to stop anti-Muslim rioting in 2002 which led to the deaths of at least 1,000 people in Gujarat.

Despite these continuing controversies, however, Modi’s visit will probably warm bilateral ties with numerous key business deals and wider initiatives announced. Irritants in UK-Indian relations will continue to be overridden by the depth of bilateral economic collaboration, and strength of historical political connections.

Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.