As the British Chancellor readies to visit India

Strolling through the Palace of Westminster, the mother of all Parliaments, reveals a fresco which British Prime Minister David Cameron will have many times noticed. It’s inscription describes the scene: “Sir Thomas Roe Envoy from King James the First of England to the Moghul Emperor succeeds by his courtesy and firmness at the Court of Ajmir in laying the foundation of British influence in India 1614.”

So starts the shared history leading to shared trade through the East India Company– the world’s first multi-national, to shared principals of political, civil and judicial administration, to shared conflict in two world wars which arguably could not have been won without Indian soldier support and to Indian Independence merely 63 year ago. As the Cold War took hold thereafter and India moved from non-aligned to decidedly courted by the USSR, in response to the US and Britain tilting to Pakistan as a buffer against Communist expansion, Britain and India appeared as distant as ever.

The end of the Cold War coinciding with essential economic liberalisation in India with a desperate need for foreign capital and a Britain with such resources reminded both nations how much more they had in common than competition.

In the past 13 years alone of the Labour administration numerous initiatives from both Governments have sought to materialise what they clearly felt had gone awry: a relationship which in all facets, not just trade, should be much closer given shared history and interests, but somehow isn’t.

From the bi-annual UK India Roundtable commenced in 2000 to the Delhi Declaration in 2002 in which both countries ‘reaffirm the deep partnership between India and U.K; and pledge to work together to identify and develop new areas of partnership between the two countries – to the benefit of our peoples, and to help create a better and safer world’ to the UK India Business Council (the de-facto Chamber of Commerce) to JETCO (Joint Economic Trade Committee) to a proliferation of Ministerial visits in both directions to the exhaustion of Foreign Office staff in India on both sides.

Yet the first ever UK-India Investment Summit was only held in London in October 2006, and addressed by the Prime Ministers of both countries. Little wonder a British Parliamentary Report as recently as 2008 put it, ‘despite the UK’s shared history and commercial ties with India, the UK was not as engaged with India’s markets as it could be’.

And all this despite the UKTI (UK Trade and Investment) presence in India being its second largest after its operations in the US. Little wonder the UK Parliamentary Trade and Industry Committee in 2006 nevertheless warned that an under-resourced UKTI team risked the UK missing the ‘last train’ in India.

And in a classic case of resource causing as much noise as result the same Parliamentary report noted ‘The Trade and Industry Committee highlighted the profusion of UK regional agencies’

representation in India, which caused confusion for Indian companies in particular. It said

that such direct representation was not necessary to promote trade or raise awareness.’

But there is many a slip between the lip and the cup goes the old English saying and so it seems with the incipient ‘special relationship’ between the UK and India.

As Leader of the Opposition, David Cameron expressed the importance to the UK of a ‘Special Relationship’ with India. In the Queen’s Speech that was changed to ‘Enhanced Relationship’. That is a change that will not go unnoticed in Indian Government circles. Indeed it sounds like a downgrade.

What does it take to have a special or enhanced relationship? Well, here are some things you don’t do. You don’t give the impression of a downgrade in the Queen’s Speech. Did no one at No.10 in drafting the PM’s speech read Cameron’s previous comments? Indeed why did the PM allow himself to be persuaded by the Foreign Office of the change?

The second thing you don’t do is announce an immigration cap that leaves one of the biggest investor countries into the UK wondering how and whether to invest. This is not conjecture and speculation on my part. At a meeting of the CII at Chatham House in June I was left in no doubt by the heavy weight industrialists as to their views. ‘Protectionism’ was how they saw the immigration cap.

Unfortunately to coincide with the CII visit, Jo Johnson MP wrote in the Financial Times a piece about how the UK needs to show ‘tough love’ to India and have a ‘game changer’ in relations. He is wrong. It’s the other way round.

India is showing tough love to the UK. It’s saying ‘if you want this relationship, given we’re in the ascendency, given we’re the ones with 8% GDP growth, given we’re the ones investing more in your country than vice versa, we’re the ones with the public spending growth, and being courted by the rest of the world, we have a defence budget larger than yours and are closer to Afghanistan and Iran, we’re the ones the world needs to export too to export its way to growth, we’re the ones the world looks to for competitive innovation and productivity, then it’s the UK that has to show it’s love and do the chasing and make the moves.’ That’s tough love – Indian style.

So the issue is – if Britain wants a special relationship – what does it need to do to show love and that it wants a game-changer? It needs for a start to remove irritants and then point out the opportunity to the Indians.

So how do you get back on track which appears already off the rails? The good news is I believe the UK government is not simply paying lip-service to the importance of India. It is not merely seeking to flatter. Indian CEOs are not Maharajas of old – they are resistant to flattery and seek action. New Governments take time to find their feet, staff are new and these minor errors should be seen as such.

Too often in Government, those from upon high proclaim a desire, and those below have to think how to enact it. Much is lost in translation, not least passion, imagination and energy. So turn it around to the Indians. I pointed out to the CII delegation – ‘you have a Government so determined to recognise your importance that they mentioned it in their very first Queen’s speech, so keen that they appoint an Indophile as Business Secretary, so energised that as Leader of the Opposition the now PM took his very first foreign trip to India. They are presenting you with an opportunity to help them build that relationship. This is a business opportunity, but like all opportunities if the door is open, you have walk through it. So what do you think the UK government should do? Help them to help you – that’s what brings about a special relationship. Not either side being aloof and standing back.’

One critical area is to have Indian international corporate help the UK Government to bring UK companies into India. Let’s set targets and specifics to make it happen– both countries and their companies benefit as a result. But set the targets and goals in education, scientific collaboration, military exercises – make India as important as the EU and US if you dare. That is a game-changer. Treat them like your anglo-saxon neighbours.

But energising Indian business to assist smaller British companies collaborate in India is just the business angle. In the bilateral relationship all the ‘irritant’s’ need addressing for a meaningful relationship. If the US-UK relationship is a special relationship, then as with that relationship, India expects consultation and co-ordination on Afghanistan, Pakistan and China. It expects more than words on Security Council seats. If you want a game-changer do you think more naval exercises with France in the Baltics are key, or with India off the coast of Pakistan for UK security?

If Britain is looking for its distinctive and determining role and relevance in the 21st Century, it can find it through a special, not merely enhanced, relationship with India; from joint security to trade. It has better claim to such a relationship than any other country. It needs the courage to consummate it by smothering India with joint collaborations. And India should be left in no doubt that Britain over any EU nation or indeed the US is better placed in aggregate allowing for history and understanding to deliver on mutual benefits. But that needs joint co-ordination. A coalition on a host of issues. Being on the same side of the table not the opposite. That’s a game-changer. A totally different way of thinking about the relationship.

And the UK needs to stop banging on about right of access for law firms, India got the message the first of the 1,000 times they were told. Time is short, another India will not come around for a generation.

Instead the relationship has to be ‘the UK is ready, willing and able’ but grab the opportunity for an embrace that the UK’s open arms entails and don’t sulk about past mis-steps India. That’s tough love on both sides.

If David Cameron is to expand and reinvigorate British influence in India, he too will have to be equally courteous yet firm.

Alpesh B Patel is founder Principal of Praefinium Partners – a UK asset manager investing in India. Formerly a columnist for the Financial Times with over 200 investment columns published in the newspaper and author of 13 books on investment. He is a Trustee of Chatham House, a board member of UK India Business Council and UKTI Dealmaker for India, a former member of the UK India Roundtable, he is a former Visiting Fellow in Business and Industry at Corpus Christi College, Oxford University. All opinions herein are his personal opinions.

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