On the eve of Indian independence on 15 August, 1947 (whose anniversary was celebrated yesterday), the country’s first Prime Minister Jawaharlal Nehru said that “the achievement we celebrate today is but a step, an opening of opportunity, to the greater triumphs and achievements that await us.”
India’s independence was not even 70 years ago, yet the country is now the world’s fastest-growing economy, expanding at a rate of 7.6 per cent. The country’s liberalisation started in 1991, but it has been the great reforms introduced in the past two years that have really seen its economy take off. Prime Minister Narendra Modi has a clear vision for India, with policies such as Make in India paving the way towards his target of increasing manufacturing from 16 to 25 per cent of the Indian economy.
With industrial strategy now at the heart of our own government’s policy, British manufacturing has an unprecedented opportunity to partner with Indian business. But the potential goes much further than that – if we can get policy right.
Our previous government placed China ahead of India, as indicated earlier this year by the announcement of a pilot scheme offering Chinese visitors a two-year visitor visa for just £87. Currently, Indian visitors have to pay £330 for the same arrangement.
Meanwhile, the number of Indians travelling abroad is increasing 10 per cent year-on-year and, in spite of the cultural ties between the UK and India, France has overtaken us as the number one European destination for Indian tourists. The government should introduce a £87 two-year visitors visa for India immediately.
In education, while the number of Indian students planning overseas education is rocketing upwards, the UK is failing to ensure they are made welcome here. Britain risks missing out entirely to the US, Australia, Canada and, increasingly, other European countries. We need well-evidenced immigration policies, beginning with the reinstatement of a simple route into post-study work for foreign graduates whose skills our economy desperately needs.
The gains from closer cooperation could be even more significant in the future, as India works to move many more people from poverty into the middle classes. The Indian economic reform agenda is driving ahead, with one of the greatest developments, legislation introducing a nationwide Goods and Services Tax (GST), being passed just this month. This will transform India’s economy by simplifying taxation across the 29 states and seven union territories, bringing the country’s 1.25bn consumers into a single market and creating a level playing field.
This latest bill will create wealth by reducing bureaucracy and costs, while also tackling corruption. It holds enormous potential to help move the Indian economy forward, with estimates that the introduction of GST will increase India’s GDP by 2 per cent per year.
Quite understandably, there is apprehension among Indian business leaders surrounding the effect of the EU referendum vote in Britain. The terms of our relationship with Europe will have significant implications for the possibility of a free trade agreement between India and the UK, and for the vast majority of those Indian companies whose European headquarters are in London, which they also consider by far the number one financial centre in the world.
In my view, UK-India trade relations will only continue to grow, and Cobra Beer along with our joint venture partner, Molson Coors, is continuing with expansion plans of our existing manufacturing in India. Now is the time for UK businesses, including our SMEs, to partner in India’s phenomenal growth story.