Blog: A trade deal with India is the great Brexit prize that could determine the West’s fate – Telegraph.co.uk

Liz Truss was in India earlier this month, 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 surely the UK, home to 1.5 million people of Indian descent. Many of our most successful entrepreneurs are of Indian background, 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 many 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 of Indian descent, 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.

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