By Lord Hannan
The UK trade secretary, Liz Truss, has just been in India preparing the ground for a visit by
Boris Johnson. The unstoppable Yorkshirewoman has concluded trade agreements with 64
states over the past two years – not counting the deal with the EU itself – and is currently
negotiating with Australia and New Zealand, exploring talks with the Gulf states and
Mercosur, and applying to join the Pacific trade nexus, the CPTPP. But India is in a special
category – economically, geopolitically and, yes, sentimentally.
Let’s start with the economics. For the first half century after independence, India was a
largely closed economy. That stylised blue wheel in the middle of its flag, the chakra? It
evolved from the spinning wheel in the Congress Party banner. For Gandhi, independence
was bound up with the idea of making cloth from traditional handlooms rather than
importing textiles from Lancashire. For decades afterwards, partly because of Gandhi’s
status, self-rule and self-sufficiency were treated as inextricable.
Only at the end of the twentieth century did India begin to open up – starting with countries
in its immediate vicinity. It has since signed trade deals with Japan and ASEAN, but not with
any Western state. Britain, consequently, was barely affected by the growth that followed
from India’s liberalisation. Since the year 2000, our share of India’s imported goods has
fallen from 6 to 1.3 per cent, and of services from 11 to 2.1 per cent.
Yet if any Western country is positioned to have a mutually beneficial trade deal with India,
it is the UK, home to 1.5 million people of Indian descent. Many of our most successful
entrepreneurs are Indian, and British brands from Jaguar cars to Tetley tea have attracted
Indian buyers. We might think of JCB as the quintessential British firm – dependable,
patriotic, the first company that many little boys put a name to. But Indians think of it rather
in the way that they think of cricket – as an Indian institution that happens, almost
accidentally, to have originated in Britain.
Removing tariffs will bring benefits both ways. Gandhi would be astonished to learn that it is
now Indian textiles that are hit by tariffs as they enter the UK – 9.6 per cent on men’s shirts,
for example. Whisky, meanwhile, attracts an almost unbelievable 150 per cent tariff when
sold to India. But, though tariff reduction is always and everywhere desirable, the bigger
gains will be in the liberalisation of legal and financial services, facilitated investment and
the mutual recognition of qualifications. Tech, coding and engineering are among the many
instances of where our economies are naturally complementary.
That complementarity derives, ultimately, from the fact that India, like Britain, is an
Anglophone, common law, parliamentary nation – which might just prove the single most
important geopolitical fact of the twenty-first century.
The pandemic has accelerated the shift in power from the West to China – the only major
economy that is significantly larger than it was a year ago. Whether that shift also means a
more authoritarian world depends largely on whether India self-defines primarily as an
English-speaking democracy or as an Asian superpower.
Boris Johnson, whose children are partly Indian, understands the subtleties better than any
other leader, and wisely wants to turn the G7 bloc into a D10 (D for democracies) by adding
India, Australia and South Korea.
It is true that Britain’s relationship with India was not always easy, and the intellectual
currents that have led to statue-smashing here are felt, too, on the subcontinent. Yet there
is also an unmistakeable affinity and affection between the two countries – an affection that
the free world may yet have cause to appreciate.
The easiest mistake to make is to see the Commonwealth in essentially historical or
sentimental terms, as a force that played a role in defeating the Nazis, but has since lost its
relevance. Quite apart from the natural market formed by countries that share a language, a
legal system, interoperable regulatory norms and common accounting methods, it forms a
natural political alliance, exerting a pull towards freedom and democracy.
