Here is a look at India-UK ties as proud Hindu and leader of the Conservative Party of Indian origin, Rishi Sunak takes office as UK prime minister.
There is a new prime minister in the UK. Rishi Sunak, 42, created history with numerous firsts and got both praise and criticism. He was the first person of Indian origin, a person of colour, and the youngest British prime minister in 200 years. He serves as Britain’s 57th prime minister.
This was a proud moment for Pakistan and India. His forefathers originated in Gujarawala, a region of independent India that is now located in Pakistan. His extended family is located in Punjab, India, nevertheless. Sunak’s union with Akshata Murthy, the daughter of Indian billionaire and founder of Infosys Narayana Murthy, has significant Indian ties. Therefore, many people think Rishi Sunak could be beneficial for India. Will he consider Indian interests when making foreign policy?
Rishi Sunak would prioritise British interests above everything else, as it should. Liz Truss was really viewed as being more in favour of India than Sunak. Sunak recently declared his desire to improve the UK-India relationship in order to facilitate easier access for UK students and businesses in India.
“We are all well aware of the potential for the UK to conduct business and sell goods in India, but, he continued, “we need to view that relationship differently because there is a great deal that we in the UK can learn from India”.
It’s not just a one-way relationship, it’s a two-way relationship, and that’s the kind of change I want to bring to that relationship, he continued. “I want to make sure that it’s easy for our students to travel to India and learn, and that it’s also easy for our companies and Indian companies to work together,” he said.
While Liz Truss travelled to India more frequently than any of her other cabinet members while serving as foreign secretary under Boris Johnson’s administration, it was her trip there in February 2021 that gave the trade agenda—marked by the Free Trade Agreement (FTA) negotiations—a strong push that was anticipated to materialise by Diwali or the end of October this year.
Truss made a stand in favour of a fair, balanced agreement that had strategic and economic weight. She stated a wish to complete the trade agreement by Diwali, or at the the least, by the end of the year, and to ensure that it is as comprehensive as possible, including everything from life sciences to technology to agriculture.
Alex W. Ellis, the British High Commissioner to India, acknowledged that although these conversations are “never easy.” The trade agreement that India has been negotiating with the EU since 2007 lags behind, despite the fact that Brexit has made a separate trade agreement with the UK possible.
INDIA-UK TIES
With Rishi Sunak as prime minister, relations with India will continue to grow, but his selection of cabinet picks shows clearly that he would prioritise country’s interests before connections with India.
Suella Braverman, a member of the Conservative Party with Indian origin, has been named home secretary in Sunak’s Cabinet. The party’s decision was made just six days after she resigned from her position, apologising for a “technical violation of government norms on sending an email.”
But for India, it was her remarks in that capacity that infuriated New Delhi. Braverman expressed her worry that a trade agreement with India will lead to a rise in immigration to the UK, despite the fact that Indians already make up the largest group of visa overstayers. Indian immigrants make up the highest portion of overstayers in our country, according to Braverman.
She told The Spectator, “I don’t think that’s what people voted for with Brexit. I have reservations about having an open border migration policy with India.
In order to promote and enable improved cooperation in this area, we even negotiated a deal with the Indian government last year. It hasn’t always worked out nicely,” she continued.
Even though this may continue to irritate, the country and the world are aware of the Conservatives’ strict stance on immigration.
James Cleverly, who previously stated a wish to have an even better commercial connection with India following accusations that comments made by Braverman concerning Indian immigration cast doubt on the FTA deal’s viability, is the other re-appointment.
As the greatest economy and democracy in the world, I strongly believe that India should play a more significant role in the region and the rest of the globe. An FTA would be a better champion for this cause, Rishi Sunak told reporters in July.
“Our two countries have a tonne of possibilities in the financial services sector. Because insurance is a terrific tool for enabling safety for people and growth, India wants to promote it throughout the entire economy. Because of our excellent insurance industry, we can assist with that in the U.K., he said.
WHAT IS INDIA-UK FTA?
A free trade agreement between India and the UK is anticipated to boost economic growth and prosperity by expanding investment flows (both internal and outward), import and export flows, productivity through more effective resource allocation, and greater openness to global competition.
The fifth round of FTA negotiations was completed by both nations on July 29, 2022. Both parties were optimistic about the progress of their technical discussions over the course of two weeks, but that optimism now appears to be failing due to delays in reaching a deal.
For products like motor vehicles and parts, electrical equipment, medical devices, chemicals, wines, Scotch, and spirits, as well as some fruits and vegetables, the UK is eager to gain access to the Indian market. This could have an effect on regional business players and/or strengthen the manufacturing ecosystem.
Kemi Badenoch, UK trade secretary and Cabinet minister in charge of the FTA negotiations at the Department for International Trade (DIT), said the deal being lined up with India would bring great wins for the industry as the steep tariffs of up to 150 percent are set to be lowered on Thursday during a visit to a Scotch whisky distillery.
India seeks to enhance its exports to the UK of rice, as well as other agricultural products, pharmaceuticals, tobacco, leather, and footwear. Both parties intend to increase digital cooperation and services under the FTA.
TRADE IRRITANTS
On a number of crucial economic matters, the two parties have yet to come to an agreement. Even as the two parties worked to reach a deal, there was a small “tariff war” going on between India and the UK.
In response to restrictions the UK placed on 15 Indian steel products, India proposed on September 28, 2022, an additional 15 percent duty on 22 imports from the UK, including blended whiskey, Scotch, cheese, etc. This caused a drop in Indian exports and a loss of duty collection worth US $247.70 million.
How the UK Stock Market reacted to new Prime Minister
Reuters, October 24 – As a turbulent few weeks in British politics, investors found some relief as the major equity indices in Britain closed higher on Monday. Rishi Sunak appeared destined to become the country’s next prime minister after other contenders withdrew from the race.
The domestically focused FTSE 250 index (.FTMC) increased 0.8% while the blue-chip FTSE 100 (.FTSE) rose 0.6%.
After Sunak won the race to lead the Conservative Party on Monday, the British pound increased in volatile trading, while gilts surged. Sunak will be in charge of guiding a sharply divided nation through an economic crisis that is expected to make millions of people poorer.
According to Danni Hewson, financial analyst at AJ Bell, “the markets are sure that they know the kind of Prime Minister Rishi Sunak is likely going to be because they know the sort of chancellor he was and it is evident that he realised how harmful those unfunded tax cuts were likely to be.”
After two months of falls, the FTSE 100 is on track to conclude October higher, up 1.6% so far.
FOREX: In volatile trading, the value of the pound fell by 0.1% to $1.1291 against the dollar, bouncing between the day’s high of $1.1402 and low of $1.1275.
BOND MARKET: Ten-year gilt yields are at their lowest level since the “mini budget” presented on September 23 by former finance minister Kwasi Kwarteng. They are down 28 basis points at 3.78%.
The markets currently anticipate the Bank of England to set rates at somewhat less than 5%, lower than the 6% projected in the weeks after Liz Truss’s mini budget, according to news reports that were released on Monday. Finacial Media House Acquainting You with Financial Market News (moneynotsleep.com)
