British Prime Minister Liz Truss is not new to India-UK ties. Earlier as an International Trade Secretary, and later as a Secretary of State in the Boris Johnson government, she had many virtual interactions with Indian policy-makers. She also visited India a few times in the recent past.
India-UK ties have already been elevated to a ‘comprehensive strategic partnership’, and an ambitious ‘Roadmap 2030’ have been adopted. Fast track negotiations on bilateral Free Trade Agreement (FTA), and the British ‘Indo-Pacific tilt’ have provided new impetus to relations.
As trade minister, Truss saw India as a “big, major opportunity” and “UK and India in a sweet spot of the trade dynamics”. She launched the India-UK Enhanced Trade Partnership (ETP) in early 2021, and believed that “working with India will help enhance the UK’s position as a global hub for digital and services”. While interacting with the Conservative Friends of India during her campaign, Truss asserted that she is “very, very committed to the UK-India relationship”.
As the fourth British Prime Minister in six years, she is taking over at a time when the UK is facing serious economic, political, and foreign policy challenges. The Conservative Party is badly divided. The post-Brexit disruptions are still being felt. The post-pandemic recovery is rocked by the war in Ukraine, higher energy prices, and unprecedented inflation. So, managing different factions within the party, and announcing a new growth and energy strategy will be on top of her agenda.
During the campaign, she asserted that her plan for growth is to “built on Conservative ideas: tax cuts, supply-side reform and deregulation”. Now she wants to “transform Britain into an aspiration nation” with the priorities on economy, energy, and National Health Service (NHS). In the coming days, her government has to roll out specific details of these plans.
Apart from broader convergence of Britain’s post-Brexit ambitions, and India’s economic and strategic priorities, a major deliverable expected is a bilateral FTA. During Johnson’s India visit early this year, a deadline of an agreement by Diwali was fixed.
As 19 out of 26 chapters are already closed, Indian policy-makers are confident that an agreement by the deadline is within reach. Even if we are able to see an agreement by the end of 2022, it will be quite an achievement as negotiations started only in January. An India-UK FTA also has the potential to provide a broader template to India’s other trade negotiations including with the European Union. However, if negotiations are prolonged, it will impact momentum created by the newly-signed FTA’s with Australia and the United Arab Emirates.
Normally, countries sign trade agreements when economic conditions are more favourable. The conditions in the UK are clearly not encouraging when inflation is at a 40-year-high, and the economy is heading towards recession. Although Indian policy-makers are making positive statements, economic difficulties along with change in leadership in the UK may delay the conclusion of negotiations.
Although the UK's Indo-Pacific tilt has been discussed widely, at the moment, London is focused more on war in Ukraine. This is an area where Indian and British perceptions differ. In March when Truss visited India as part of Britain’s ‘wider diplomatic push’ on war in Ukraine, she hoped that Indian views in Russia would change. Her trip to India had also coincided with Russian Foreign Minister Sergei Lavrov’s visit to New Delhi at the same time. On sanctions against Russia, sharp exchanges were witnessed between Truss and Indian Foreign Minister S Jaishankar.
As she is quite hawkish on Russia at the moment, convergence on many foreign policy issues may not happen automatically. This may impact slowly developing India-UK defence and security cooperation.
Domestic economic priorities, and evolving geopolitical developments including the rise of assertive China have helped boost India-UK ties. Many of the new initiatives were facilitated by Johnson’s close bond with Prime Minister Narendra Modi. As Truss has been part of this process, it will be easy for her to continue with the same agenda. At the moment she may be occupied with domestic economic issues, and Russia. But the broad direction of India-UK ties has already been set. This will be further strengthened by the bilateral FTA whenever it is signed.