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India and the UK in 2025
Context:
India-UK relations, historically underwhelming, have gained momentum post-Brexit, with both nations aiming to align their global aspirations.
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- Labour’s 2024 victory has brought political stability in the UK, complementing India’s continued leadership under the Prime Minister.
- Both countries prioritise deeper cooperation in trade, security, technology, and global challenges, reinforcing their shared vision in an evolving geopolitical landscape.
Key Areas of Cooperation
Trade and Investment
- Economic Growth: India aims to increase exports to $2 trillion by 2030 under initiatives like Make in India.
- FTA Negotiations: India-UK Free Trade Agreement (FTA) aims to double bilateral trade (currently £42 billion) by 2030.
- India seeks: Reduced tariffs for textiles, gems, and liberalized skilled worker mobility.
- UK seeks: Lower tariffs on automobiles, alcohol, and greater services sector access.
- Challenges: Tariffs, migration policies, and climate action-linked taxes.
- FDI: UK is India’s top FDI destination (£9.3 billion in 2021), while British FDI in India was £19.1 billion.
- Bilateral Mechanisms: Roadmap 2030, EFD, JETCO, and CEOs Forum guide investments.
Security and Defence
- Indo-Pacific Collaboration: Shared concerns over China; UK and India focus on IOR stability, maritime security, and QUAD-AUKUS alignment.
- Maritime Cooperation: Joint naval exercises, interoperability, and participation in regional forums (IORA, IPOI).
- Defence Ties: 2+2 mechanism, British Open General Export License, and support for Make in India.
- Defence Trade: Opportunity for the UK to support India’s indigenization and reduce reliance on Russia.
- Opportunities and Caveats
- Opportunities: Scaling bilateral trade, diversifying supply chains, boosting defence partnerships.
- Caveats: Limited UK resources, Labour’s Europe focus, and overlapping challenges with Russia-Ukraine conflict.
Tech and Innovation
- Science & Innovation Council (since 2010) promotes joint research.
- UK-India Technology Security Initiative (TSI) launched in 2023 for collaboration in AI, quantum computing, semiconductors, biotechnology, etc.
- Emerging Tech Exchange Programme facilitates cooperation on cutting-edge tech.
- Focus on climate action and green tech with initiatives like India-UK Green Hydrogen Hub and Climate Finance Leadership Initiative.
- Financial tech collaboration through UPI and RuPay cards in the UK.
- Cybersecurity partnership since 2021.
- UK and India co-produced AstraZeneca COVID-19 vaccine.
Diaspora, Migration, and People-to-People Ties
- The Indian diaspora in the UK (1.6 million, 2.5% of UK population) contributes over 6% to the British economy.
- Indians are the largest homeowners in the UK, with 71% owning property.
- Over 65,000 Indian-owned businesses in the UK.
- Indian-origin professionals dominate the UK’s National Health Service (NHS).
- Indian diaspora acts as a “living bridge” influencing UK politics, culture, business, and more.
- Increasing Indian migration post-Brexit, especially skilled professionals.
- India-UK Migration and Mobility Partnership (MMPA) under implementation to ease migration for students and professionals.
- Young Professionals Scheme (2023) allows 3,000 Indian professionals to work in the UK for two years annually.
Tensions and Divergences
- Colonial legacies and issues like Khalistani and Pakistan extremism hinder progress; Indian High Commission vandalized in 2023.
- A BBC documentary in 2023 portraying Prime Minister Narendra Modi negatively was condemned by India, despite Sunak’s disapproval.
- Canada-UK tensions over India’s alleged involvement in Hardeep Singh Nijjar’s murder may impact security cooperation.
- Extradition issues: India’s requests for fugitives are often rejected by Britain.
- Labour Party critical of India’s Kashmir policy under Corbyn; new leadership seeks better ties with India.
- Russia-Ukraine war: India’s neutral stance is respected by the UK, with mutual understanding.
- China policy divergence: UK’s stance on China shifted from engagement to security concerns; differences with India on Chinese relations.
- Labour’s China policy is unclear, balancing cooperation, competition, and challenges.
Looking Ahead
- The Technology Security Initiative (TSI) will be crucial for the relationship, focusing on AI, semiconductors, and quantum computing.
- India-UK cooperation may grow through mutual interests and shared values, insulating ties from historical and diaspora issues.
- India and the UK, as global economic and technological powers, stand to benefit from deeper cooperation.
