UK-India 2020 Priorities: Part 3 – Two opportunities for political, economic and diplomatic collaboration
2020 offers two important opportunities for UK-India political, economic and diplomatic collaboration.
The first is the bi-annual Commonwealth Heads of Government Meeting (CHOGM), which will take place in Rwanda in late June. The theme will be: ‘Delivering A Common Future: Connecting, Innovating, Transforming’. Five sub-themes have been identified for discussion: Governance and Rule of Law; ICT and Innovation; Youth; Environment; and Trade – all topics in which the UK and India can and should play pivotal roles.
India, under Prime Minister Modi, should look to build upon its position as a leader of the Commonwealth alongside the UK. India and the UK are the two largest economies in the 53-member group, and they are, arguably, the two most significant Commonwealth members in terms of global geopolitics.
If the UK and India work together to drive the Commonwealth agenda – through exerting the group’s influence across the world and supporting small Commonwealth nations’ development – their efforts can support the Commonwealth multilateral relationship and the UK and India’s own bilateral relationship.
A guide for future Commonwealth trade reviews launched after the 2018 CHOGM in London is based on the UK and India’s Joint Trade Review, which works to identify barriers to trade and stimulate greater trade. This indicates that the UK-India bilateral relationship is already setting an example to Commonwealth and, indeed, other nations. It is crucial that the UK and India advance their influence in 2020 to further exhibit global leadership in the areas of free trade.
The economic benefits of intra-Commonwealth interaction are evident. The group’s combined GDP totals over $10 trillion and trade and investment between Commonwealth nations is expected to exceed $1.5 trillion this year. As India aims to grow its economy beyond $5 trillion, this is an opportunity for greater trade and investment that India should take. Furthermore, growth in Africa (comprising of 19 of the Commonwealth members) presents several opportunities in the short and long-term for trade, investment and geopolitical influence.
Ease of doing business is one area that both countries can lead. The UK has consistently ranked among the top countries in the World Bank’s ease of doing business rankings, currently ranked 8th in 2019. India has been the most improved country in recent years, jumping from 142nd in 2014 to 63rd in 2019. The UK’s consistently high performance and India’s recent success show that they have expertise that can help other Commonwealth countries reach similar heights.
In Glasgow in November, the UK will Chair the United Nations Climate Change Conference (COP) – the second important opportunity in 2020 for UK-India political, economic and diplomatic collaboration as it brings together world leaders to discuss how to overcome climate change.
The global nature of climate change means that collaboration is key. With the UK taking a leading role as COP hosts, India should seize the opportunity to continue to drive forward the environmental agenda, particularly owed to the widespread perception that the 2019 COP25 was not as successful as hoped.
Given its huge population and influence, India has the capability to make a real difference. In 2015, Prime Minister Modi initiated the International Solar Alliance to demonstrate India’s commitment to both cut carbon emissions and improve energy access to those unconnected and ignite global cooperation towards those goals.
The UK was the first major economy to put into legislation its ambition to be carbon neutral by 2050. India has committed to producing 40 percent of its installed capacity to be non-fossil fuel sourced by 2030 and to reduce its CO2 emissions by 35 percent relative to 2005 levels by the same date.
So, what else can the UK and India do?
The UK and India can support each other and third countries with expertise, knowledge and technology. In particular, the COP summit offers further opportunity for diplomatic and commercial engagement in areas such as research and development, green finance, and technology transfer.
Investors are becoming more conscious of environmental and sustainability issues. Therefore, promoting green investment opportunities can lead to greater economic benefits, in addition to the positive social impact that green and sustainable action is more commonly linked to.
A series of green bonds are listed on the London Stock Exchange to raise finance for Indian infrastructure. Not only have the bonds been successful in raising funds and thereby working towards achieving India’s climate, energy and development goals, but have also helped India to increase its investor base across Europe.
The UK and India must set the example for lower income nations and support each other through technology and knowledge-sharing. For instance, UK R&D in battery technology can support India as well as smaller commonwealth nations transitions to renewable energy sources. India should set the example for other middle and low-income countries to transition to lower-emission, more efficient energy use whilst also meeting demands of a growing economy and population.
In the run up to COP26, we at the UKIBC will produce our own report on the opportunities and challenges that UK and Indian companies are working on in this space. This forms part of our recently launched Socio-Economic Impact campaign, showcasing the positive social impact that UK companies are having in India in addition to the economic benefits. The launch includes the creation of a mini-site providing a comprehensive source of information, news, case-studies and events on UK businesses and higher education institution’s social impact in India.