World Perspective Of The UK And India In 2025
The relationship between India and the United Kingdom has long been characterised by a sense of underachievement, as their connections have not flourished to the same extent as those with other Western allies, like France and the United States.
Since the momentous Brexit referendum in 2016, the United Kingdom has been engulfed in a protracted and intricate process that has dominated the national agenda, often overshadowing other pressing priorities. In recent years, the relationship with India has seen a remarkable upward trajectory. The Conservative Party has demonstrated a steadfast commitment to strengthening ties with India, highlighted by significant bilateral engagements. A notable moment was former Prime Minister Boris Johnson’s visit to India, where he served as the chief guest for Republic Day in 2021. The recent visit culminated in the unveiling of Roadmap 2030, a visionary blueprint aimed at enhancing cooperation and elevating relations to a Comprehensive Strategic Partnership. In a significant move, the UK unveiled its Integrated Review, a comprehensive guide outlining the nation’s approach to “national security and international policy.” The UK highlighted India around a dozen times, underscoring its growing importance as an international actor. The Labour Party continued to ride the wave of success after its remarkable landslide victory in the UK general elections held in July 2024.
While the Conservatives might have aligned more closely with India’s ruling nationalist Bharatiya Janata Party (BJP) ideologically, the prevailing domestic political instability in the UK has hindered the advancement of India-UK bilateral relations. In a remarkable turn of events, Labour has achieved a stunning landslide victory, clinching 411 out of 650 seats in the British Parliament. This significant win brings a sense of stability to a nation that has faced years of political upheaval, even as it grapples with domestic challenges, including violent riots sparked by Prime Minister Keir Starmer’s leadership. In the wake of strained relations during Jeremy Corbyn’s tenure as Labour leader, Keir Starmer made a commitment to mend the relationship with India upon his election. In a significant diplomatic move ahead of the UK elections in February 2024, prominent Labour figures including Shadow Secretary David Lammy, Shadow Business Secretary Johnathan Reynolds, and Shadow Deputy Prime Minister Angela Rayner embarked on a visit to India. This trip culminated in the signing of a landmark Technology Security Initiative, marking a pivotal moment in UK-India relations.
The UK’s aspirations for a ‘Global Britain’ and its post-Brexit foreign policy are firmly anchored in the pursuit of stronger ties with India. Britain stands firmly behind India’s ambition for a permanent seat on the United Nations Security Council, a commitment highlighted in the Integrated Review Refresh strategy unveiled in 2023. As the world changes, both countries are working hard to find their own identities in a geopolitical system that is always changing. They are doing this with the help of better cooperation in the economic and security areas.
The Conservative government has set its sights on the UK-India Free Trade Agreement (FTA), a pivotal initiative aimed at doubling the current bilateral trade figure of GBP 40 billion by the year 2030. Launched in January 2022 during the tenure of the Johnson-led Conservative government, the FTA encompasses 26 chapters that delve into goods, services, and investments. It addresses crucial aspects such as tariff reductions, market access, intellectual property rights, and rules of origin. India’s expansive market and its position as the fastest-growing economy within the G20 present a compelling opportunity for the UK, especially in light of the economic challenges exacerbated by the ongoing Russia-Ukraine conflict.
In the dynamic landscape of global trade, the UK emerged as India’s 11th largest trading partner during the four quarters leading up to the conclusion of Q2 2024. Meanwhile, India positioned itself as the 14th largest trading partner for the UK, highlighting the intricate web of economic relationships between these two nations. Bilateral trade has reached an impressive GBP 42 billion, showcasing a significant advantage for India. Britain’s trade deficit with India stands at GBP 8.3 billion in 2023, underscoring the dynamic economic relationship between the two nations. Despite the UK’s trade with India representing a mere 2.4% of its overall trade, this statistic underscores a significant opportunity for growth and expansion in this vital economic relationship.
The proposed Free Trade Agreement, initiated in January 2022 during the tenure of the Johnson-led Conservative government and enjoying bipartisan backing, promises to enhance India’s exports in textiles, apparel, and gems. These labour-intensive sectors currently face a 10% tariff rate in the UK, making this agreement a significant opportunity for growth and collabouration. Yet, the unresolved contentious demands from both parties linger, creating an atmosphere ripe for negotiation. India stands to gain significantly from enhanced mobility and a more liberal visa regime, particularly benefiting its skilled professionals in the IT and healthcare sectors. This also extends to Indian students aspiring to pursue their studies in the UK, opening up new avenues for education and career advancement.
In a contrasting stance, Britain is advocating for lower tariffs on its exports, specifically targeting automobiles and the beloved Scotch whiskies. The UK is aiming to significantly increase trade with India, with a target of doubling annual exports to reach GBP 28 billion by 2035. This ambitious plan is also anticipated to elevate wages across the UK by an impressive GBP 3 billion. The United Kingdom is keen on enhancing its foothold in the Indian market, particularly for its services sector, which constitutes a staggering 80 percent of its economy. India remains cautious about liberalising its services sector, which accounts for more than 50% of its GDP. This is driven by concerns over foreign competition.
In a move reminiscent of the EU’s Carbon Border Adjustment Mechanism, the UK is gearing up to introduce an emissions-based tax targeting carbon-intensive imports, including iron, steel, and fertiliser, set to launch in 2027. This development could spell trouble for Indian exports in these crucial sectors. The FTA faces yet another hurdle, particularly as Labour’s unwavering dedication to climate action stands in stark contrast to the Tories’ approach.
In a strategic move towards enhancing trade diversification and fortifying supply-chain resilience, both India and the UK are looking to reduce their dependencies on China. The proposed India-UK Free Trade Agreement (FTA) stands to significantly elevate the prospects for a more expansive EU-India FTA, simultaneously polishing India’s image as a committed and open trading partner on the global stage.
The United Kingdom and India are currently engaged in discussions to establish a Bilateral Investment Treaty (BIT), aimed at strengthening their financial relationship and facilitating smoother dispute resolution. India has long been a significant player in the investment landscape, showcasing a remarkable preference for the UK over the entire European Union. In 2021, Indian foreign direct investment (FDI) in the UK reached an impressive GBP 9.3 billion, while British investments in India were valued even higher at GBP 19.1 billion. India stands as the second largest contributor of foreign direct investment in the UK, showcasing its economic prowess through notable ventures such as the Tata Group’s acquisition of the prestigious Jaguar Land Rover brand.
A series of dynamic initiatives, beyond the proposed Free Trade Agreement, are shaping the world of trade and investment. These include the Economic and Financial Dialogue (EFD), the India-UK CEOs Forum, the Global India Forum, the India-UK Joint Economic and Trade Committee (JETCO), and the UK-India Business Council (UKIBC). Each of these platforms plays a pivotal role in fostering collaboration and enhancing economic ties between the two nations. The Roadmap 2030 unveils an insightful section dedicated to investment, urging British companies to seize the opportunity presented by India’s Productive Linked Incentives. This initiative invites them to delve into the rapidly expanding manufacturing sector of the country.
The United Kingdom’s heightened focus on the Indo-Pacific region has ushered in a more assertive stance regarding China, a viewpoint that finds a sympathetic echo in India. India’s foreign policy is increasingly focused on ensuring stability and a rules-based order in the Indo-Pacific. This region faces challenges due to China’s growing military and economic influence. To navigate these complexities, India is prioritising collaboration with global partners, especially in the Indian Ocean Region (IOR). India and the UK wield significant influence and possess strategic interests in the Indian Ocean Region. Notably, the UK maintains a diplomatic presence in every western IOR nation, with the exception of Comoros.
In a strategic move, both nations are enhancing their maritime presence in the Indo-Pacific. This involves a series of joint exercises and efforts to improve naval interoperability. Their collaboration extends to counter-terrorism initiatives and Humanitarian Assistance and Disaster Relief (HADR) activities, all while focusing on broader capacity building.
What is the ultimate goal?
The ultimate goal is to foster growth, connectivity, and security throughout the region. Exploring new avenues for collaboration is essential in the pursuit of safeguarding the region’s freedom of navigation. This initiative also aims to address pressing issues like piracy and illegal fishing, ensuring a secure and sustainable maritime environment. The United Kingdom’s strategic move to deploy its Littoral Response Group in the Indian Ocean marks a significant step forward in the evolving landscape of India-UK maritime collaboration.
Nevertheless, there are specific considerations to keep in mind. With an ambitious vision for the future, the IR Refresh sets its sights on establishing Britain as the leading European force in the Indo-Pacific by 2030. This strategic initiative underscores the nation’s commitment to expanding its influence and presence in this vital region. Amidst constraints in financial and military resources, coupled with a strong focus on the Euro-Atlantic, the UK’s ability to emerge as a security provider in two pivotal regions—the Euro-Atlantic and the Indo-Pacific—remains a topic of ongoing debate. This discussion continues even as the nation commits to boosting its defence budgets to 2.5 percent of GDP, along with the Integrated Review Refresh, which intriguingly connects these two theatres through its innovative “Atlantic-Pacific” network concept.
The future of Britain’s Indo-Pacific tilt, initially conceived by the Tories, remains uncertain under the new Labour government. As political landscapes shift, the commitment to this strategic direction is yet to be fully defined. In a strategic move, Labour has shifted Britain’s gaze back to Europe while simultaneously reaffirming the nation’s dedication to the AUKUS and GCAP agreements. The announcement of the Carrier Strike Group’s deployment for joint training in the Indian Ocean in 2025 marks a significant step in enhancing military collaboration and readiness. In a revealing admission, it has acknowledged Britain’s limited capabilities to effectively manage two distinct theatres, implying that the Indo-Pacific region may lose priority.
India and the UK are forging ahead with a dynamic partnership that emphasises collaboration across a multitude of sectors. From defence and technology to innovation and climate action, the two nations are aligning their efforts. The financial landscape, cybersecurity, and health initiatives also feature prominently in this evolving relationship, showcasing a commitment to mutual growth and progress. The UK’s strategic shift towards the Indo-Pacific region has emerged as a pivotal element in its broader engagement with India. Embracing a collaborative and focused strategy appears to be the path ahead. In the year 2023, a significant advancement occurred as ties were elevated to a 2+2 mechanism, aimed at fostering a deeper integration of the defence industries between the two nations. In the last ten years, only 3 percent of India’s defence acquisitions have originated in the United Kingdom. As India embarks on a journey to bolster its indigenous defence industry and broaden its network of defence partnerships beyond Russia, the British defence sector stands poised to play a pivotal role. With a focus on technology transfers and the development of advanced capabilities, this collaboration could significantly enhance the Make in India initiative.
The partnership between India and the UK in the tech arena is flourishing, encompassing a diverse array of sectors such as financial services, health, climate initiatives, renewable energy, and the vibrant startup ecosystem. As global leaders in innovation, science, technology, and research, both countries are sharpening their focus on these critical areas. This commitment is reflected not only in their domestic agendas but also in their international partnerships and strategic perspectives in the Indo-Pacific region. Their ongoing initiative, the Emerging Tech Exchange Programme, is designed to foster collaboration in the realm of cutting-edge technology. In a significant move for 2023, the UK has unveiled the role of a new tech envoy dedicated to the Indo-Pacific region, highlighting the growing importance of technology in the landscape of geostrategic competition.
The UK-India Technology Security Initiative (TSI) has emerged as a pivotal program designed to foster collaboration in the realms of technology and digital innovation. The initiative draws inspiration from the EU-India Trade and Technology Council (TTC) and the India-US Initiative on Critical and Emerging Technologies (iCET), focusing on collaboration across seven pivotal domains: critical minerals, semiconductors, artificial intelligence (AI), telecommunications, quantum computing, biotechnology, and advanced materials. The joint readout showcases a series of targeted sub-initiatives and frameworks designed to advance the partnership across these various domains.
In a bold move towards a sustainable future, India and the UK are setting the stage with their ambitious climate action goals. India aims to harness the power of renewable energy, targeting an impressive 65 percent of its electricity generation from these sources by 2030. Meanwhile, the UK has taken a significant step by legally committing to reach net-zero greenhouse gas emissions by 2050, showcasing a strong dedication to combating climate change. Existing bilateral cooperation takes shape through a variety of innovative formats, including the India-UK Green Hydrogen Hub and the Climate Finance Leadership Initiative.
In a significant development on the financial landscape, India’s Unified Payments Interface (UPI) and RuPay cards have officially launched in the UK, marking a new era of digital transactions across borders. During the tenure of former British Prime Minister Rishi Sunak, discussions emerged regarding the establishment of a new financial market in Gujarat. Additionally, plans were set in motion to create a FinTech Bridge connecting Mumbai and London, aimed at enhancing the synergy between the financial ecosystems of the two nations. The UK-India Sustainable Finance Forum is actively promoting private investments in the burgeoning green sectors.
Since 2021, India and the UK have been forging a robust alliance in the realm of cybersecurity, emphasising key areas such as governance, deterrence, resilience, and the vital aspect of capacity building. The health sector collaboration was transformative, resulting in the co-production of the AstraZeneca COVID-19 vaccine. This groundbreaking vaccine was developed at Oxford University and manufactured at the Serum Institute in India, showcasing the power of partnership in addressing global health challenges.
The British Indian community, an integral segment of the UK’s demographic and economic landscape, boasts a rich and enduring connection with India. The vibrant community boasts an impressive membership of over 1.6 million, establishing itself as the largest and most successful ethnic group in the country. This dynamic diaspora significantly contributes to the UK’s economy, accounting for more than 6% of the national GDP. With over half of its members holding degree-level qualifications and a remarkable 40% engaged in professional fields, this community is often celebrated as a “model minority.” Its influence spans a multitude of sectors, including politics, technology, academia, business, medicine, science, and research, showcasing the profound impact its members have on society.
The impact of the diaspora on British politics is unmistakable, highlighted by the emergence of Indian-origin politicians like Rishi Sunak and former Home Secretary Suella Braverman. In the current Parliament, there are 26 MPs of Indian origin, reflecting a significant presence that underscores the importance of the Indian diaspora. The Modi government’s proactive outreach to Indian-origin associations has amplified the community’s relevance in strengthening the ties between India and the UK.
Historically, the Indian community has shown a strong inclination towards the Labour Party, drawn by its longstanding commitment to anti-racist and social policies. The current landscape of political preferences reveals a complex and varied tableau. In the vibrant tapestry of the British Indian diaspora, Hindus represent a significant 44%, as indicated by census data prior to 2019. This community often aligns with the Conservative Party, showcasing a distinct political preference. In contrast, Sikhs, making up 22% of the diaspora, along with individuals from other religious backgrounds at 12%, tend to gravitate towards Labour, highlighting the diverse political landscape within the UK’s multicultural society.
In a notable trend, the UK has experienced a remarkable influx of Indian migrants under the Conservative government. In 2023 alone, a staggering 253,000 individuals from India made the journey to the UK, establishing themselves as the largest non-EU ethnic group to migrate to the country. The India-UK Migration and Mobility Partnership (MMPA) is currently being implemented to enhance skilled and legal migration between the two nations. In an exciting development, the partnership introduces the UK-India Young Professionals Scheme, a remarkable initiative that allows 3,000 Indian professionals annually to gain invaluable work experience in the UK for a two-year duration.
Indian students have emerged as the predominant group among international students in the UK, representing approximately 25% of all British study visas issued. Sunak emphasised the importance of fostering a dynamic partnership by advocating for greater opportunities for British nationals to seamlessly engage in studies and employment within Indian universities and start-ups.
In a bid to strengthen their relationship, the UK and India have embarked on a journey of collaboration. However, this path has not been without its challenges, as tensions and differing perspectives frequently impede their progress. The United Kingdom has shifted its perspective on India and Pakistan, moving towards a more unified approach. However, the shadows of Khalistani and Pakistani extremism still loom, posing challenges to the advancement of this partnership. In a notable incident that occurred in March 2023, the Indian High Commission in London faced vandalism, drawing attention to the ongoing tensions surrounding diplomatic missions. A recent BBC documentary from 2023 has sparked controversy by depicting Modi unfavourably, leading to accusations of it being “anti-India” propaganda. This backlash comes even though Sunak has made it clear that he does not “agree at all with the characterisation.”
The ongoing tensions between India and Canada, a member of the UK’s Five Eyes intelligence alliance, have escalated following allegations of Indian government involvement in the murder of Khalistani separatist Hardeep Singh Nijjar. This situation poses significant challenges to the advancement of security and intelligence collaboration between India and the UK, raising critical concerns about trust and cooperation in these sensitive areas. In a significant diplomatic move in October 2024, the UK called on India to engage with Canada’s ongoing investigation into serious allegations, expressing a strong belief in the integrity of Canada’s judicial system. In a notable development, several Indian fugitives and other individuals on the run have found sanctuary in Britain, as the country has turned down extradition requests from India.
During Jeremy Corbyn’s tenure at the helm, the Labour Party took a firm stance against India’s controversial move to revoke Article 370 in Kashmir, even going so far as to pass an emergency motion addressing the escalating situation. Under the leadership of Keir Starmer, the Labour Party has made headlines with its commitment to rejuvenating its relationship with India, aiming to address past missteps and forge a new path forward. India welcomed Britain’s initiative at the United Nations to label Masood Azhar, the leader of the extremist group Jaish-e-Mohammed, as a global terrorist. This move was seen as a significant step in the ongoing fight against terrorism.
Under Conservative leadership, the UK’s approach to China has been anything but consistent. It has evolved from what was once hailed as “the golden era of UK-China relations” during David Cameron’s time in office to a more assertive stance under Boris Johnson. This shift has seen an increased focus on scrutinising Chinese investments in key strategic sectors, reflecting a significant change in the diplomatic landscape. In a bold statement, Sunak labelled China as “the greatest threat” to the security of the British economy.
The UK’s election manifesto has unveiled a strategic three-pronged approach to its relationship with China, declaring, “We will cooperate where we can, compete where we need to, and challenge where we must.” However, the effectiveness of the UK’s China policy may be limited by its “special relationship” with the United States, particularly in light of the ongoing geopolitical rivalry between the US and China. The influence of Washington has effectively blocked the sale of British semiconductor company Nexperia to a Chinese buyer. As political dynamics shift, Britain may face increased pressure to align with American interests, especially if a Trump administration emerges on the horizon.
India is poised to closely monitor the evolving dynamics of UK-China relations. As seen with its other Western allies, where mutual concerns regarding China’s actions have fostered deeper collaboration, the partnership between India and the UK could play a crucial role in navigating the complexities and risks associated with China. The rationale behind enhancing cooperation in the Indo-Pacific region and the establishment of the new TSI is compelling and multifaceted.
