Fortune Seekers: Does India have some answers for Brexit Britain?
Businesses, the diaspora and policy powerhouses will all need to work in tandem to build lasting UK-India ties, writes India Inc. Founder & CEO Manoj Ladwa.
This year, there is an important chance to reassess the strength of India’s bond with the UK and show the world that India is a bridge-building nation.
It is just over a year until the UK reaches its Article 50 deadline and leaves the European Union (EU). UK economic growth is beating all forecasts and UK manufacturing has never had a higher output than it did at the tail end of 2017. This will come as a relief to policy-makers, as Brexit’s biggest mountains are still to be tackled.
When UK Foreign Secretary Boris Johnson delivered the first of a number of Brexit speeches from senior Cabinet figures last month, he put forward his vision of Brexit liberating the UK to create its own trade rules and expand into new markets where the EU has previously “held it back”.
Boris’ ‘Liberal Brexit’ outline may not have raised the stakes since Theresa May’s Lancaster House speech in January 2017, where the British Prime Minister asserted the need to honour the referendum result by making a clear break from the EU, the Customs Union and the Single Market. But he has put pressure on the Prime Minister to make her position clearer, for the benefit of all of those around the world with business interests in the UK, who want to keep up to speed on the negotiations.
Averting a cliff-edge
The EU27 nations are, as a bloc, headed to be one of the top four major economies, joining China, the US and India, in a decade’s time. India’s ties with Europe are strong and will grow even more valuable. How will the UK figure in all of this?
The EU27 are concerned that the UK could aim to undercut the EU by drastically shedding environmental, labour, and trading regulations in order to trade more with other nations.
However, the likelihood is that there will be some regulatory alignment on goods. This will go some way to alleviating the problem of a hard land border at Northern Ireland, and will reduce the threat of trade tariffs being levied and non-tariff barriers being imposed at vital trade ports.
Whether the UK strikes such a deal or not, the uplift of global growth will provide the UK with a cushion on which to land as it steps off the Brexit cliff. And Brexit will allow the UK to set its own tariffs on trade in services, the area where the EU-India free trade agreement (FTA) failed. There is a long way to go before all barriers to UK-India free trade are overcome and we need to determine the parameters soon.
Those who trade and invest in the UK will need reassurance that the UK will remain open and welcoming to the labour force and talent that it needs. A rapid reversal of EU migration to the UK would bring a cloud over a number of fast-growing sectors. New entrants are needed in the tech sector, manufacturing and engineering, and across the board in cities like London.
Mobility of professionals
The UK still has a tiered visa system and the number of applicants still hits the cap, month after month, showing there is no shortage of applicants for skilled work. Nasscom estimates that there are about 30,000 Indians working under the Tier 2 visa regime – in every sector from technology to food – but there is clearly scope to increase the freedom of movement between the UK and India after Brexit.
What is clear is that such initiatives to create closer ties between the UK and India are just as important as the Brexit negotiations, which will reach a crunch point this Summer. The two discussions need to happen in parallel.
The fifth annual UK-India Leadership Conclave will take place during UK-India Week this year, a showcase of all that we stand to gain by making the best of the UK-India partnership.
After Brexit, the UK will have a new place on the world stage, but its old partners will be even more important. We will have a vital chance to radically renew the UK-India bond, but businesses, the diaspora and policy powerhouses will all need to be involved for us to build lasting ties.