Jo Johnson

Britain needs a new ‘special relationship’ with India. We should start by ending overseas aid

Britain needs a new 'special relationship' with India. We should start by ending overseas aid
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For too long, Britain has been complacent about the progress made by its former colony. Now we risk missing out on the important part India will play in the new economic world order. Jo Johnson on the Prime Minister’s attempt to woo New Delhi

David Cameron is, by instinct, sceptical of the Heseltinian tradition of herding businessmen onto aeroplanes bound for faraway countries. Yet when he heads to India next week, he will be accompanied not only by perhaps the largest trade delegation the country has ever seen, but by his Chancellor, Foreign Secretary, Business Secretary and other assorted ministers. They will scatter themselves across the subcontinent before converging on New Delhi on Wednesday, in an unprecedented attempt to woo this rising world power. By dispatching himself and so many of his most senior colleagues to India, and so early on, Cameron is making a clear signal of his intent to revitalise a critical bilateral relationship — and repair what he regards as a decade of neglect.

Any way you slice them, the Labour years saw a waning of British influence in India. The UK has been losing share of trade and foreign direct investment, as well as share of mind among opinion-formers in a country that will be one of the main pillars of a new multipolar world order. Over the last decade, the UK has plunged from being India’s fourth most important source of imports to its 18th. With the next generation of Indian leaders more culturally attuned to America, Britishness is a currency of depreciating value.

Britain has found that it cannot rely on the ties of a vanishing past to sustain its relevance to a country where the average age is now below 25. True, there are today a record 34,000 Indians studying at British universities. But Ivy League colleges in the US are now the destination of choice for India’s best students: there are ten times more Chinese students than Indian ones attending Britain’s elite Russell Group universities. Even the older generation of the Indian elite, more steeped in British tradition, is less fascinated by the UK than it once was. When I asked one senior policymaker with an M.Phil from Oxford what he thought of the new coalition government, for example, he said, ‘it didn’t matter much either way’.

It is this directionless drift in Anglo-Indian relations — born of complacency and lack of focus — which Cameron seeks to reverse. He will arrive in New Delhi with powerful cards to play. Britain is the preferred launchpad for Indian firms hoping to conquer European markets. London has an unrivalled place in the hearts of the Indian wealth-generating class. Le tout Delhi is here in June and it remains the preferred place for the affluent to buy their first home outside India. There is an affection which will not change — even if it is to America that Indians turn for entrepreneurial opportunities. So New Delhi is certainly open to the prospect of a revitalised relationship with Britain, the question is how effectively Cameron exploits the goodwill.

Efforts made by Labour ministers to woo India are case studies in what not to do. Gordon Brown’s first official visit, in 2007, so lacked pizzazz that it was overshadowed by a confected diplomatic row over the racism of Celebrity Big Brother contestants towards Indian actress Shilpa Shetty. His foreign secretary, David Miliband, left the country roundly detested two years later, after unwisely lecturing India on Kashmir in a manner reminiscent of Robin Cook more than a decade earlier. This error was compounded by bumptiousness in meetings with veteran politicians. Mr Miliband tried to appear down-to-earth, staying overnight in a dalit village to highlight the marginalisation of low-caste groups once known as ‘untouchables’. Instead he came across as patronising. Visiting foreign dignitaries are expected to marvel at first world India, not wring hands over immiserated third world India.

Cameron himself knows how quickly such visits can go wrong. The last time he was there, in September 2006, a van in his fast-moving convoy struck a slum-dweller crossing a flooded Mumbai highway. Prema Naik, a 55-year-old domestic servant earning £34 a month, suffered serious head injuries. As often happens, a crowd emerged from nowhere to demand justice. As the liveried UK High Commission driver took a beating, Kate Fall, Cameron’s deputy chief of staff, was left to make frantic mobile phone calls for help. Cameron said he was ‘shocked and saddened’ by the tragic accident, which could have cast a shadow over his first high-profile foreign visit as party leader.

Yet somehow, it didn’t. The Indian media was largely indifferent to the visit of an opposition party leader from a mid-sized European nation. Cameron impressed those he met, even if his big speech calling for a ‘new special relationship’ — a phrase rebarbative to an elite weaned on Nehruvian non-alignment — failed to strike quite the right note. India, understandably, has no intention of being dragooned by Britain into Washington-led policies of containment or confrontation with countries such as China and Iran. It will be an independent player in a multipolar world, even if China’s desire for unipolar Sinocentric Asia pushes it towards the US orbit.

With the British delegation arriving in such a spirit of hope, expectations are in danger of racing ahead of what is deliverable. Both the Conservative manifesto and coalition programme reiterated Cameron’s nearly four-year-old call for a ‘new special relationship’ with India. But this formulation was toned down to ‘enhanced partnership’ in the Queen’s Speech. The thrust of his foreign policy is clear: he has said that Britain is ‘obsessed with Europe and America’ and that he wants to engineer a ‘more meaningful and energetic involvement with the parts of the world where our strategic interests will increasingly lie’. This is why engaging India — a country recently regarded as a large, exotic basket case — has suddenly risen to the top of the hierarchy of diplomatic priorities.

But if Cameron’s intention is clear, so too is his problem. For all the historical ties, Britain is struggling to differentiate herself from dozens of other middling countries trying to ride the elephant. Flip the dynamic of the relationship around and it is hard to imagine the Indian elite waking up worried about missing the British bandwagon. London is in a qualitatively different position to Washington, for example, which in 2008 delivered a game-changer for its bilateral relations with the groundbreaking nuclear deal. This ended India’s pariah status after decades of isolation. The deal allows New Delhi to re-enter the market for the nuclear material and equipment that it will need to fuel the country’s double-digit economic growth and boosts the world’s largest democracy as a counterweight to an authoritarian China.

Britain has no similar card to play, no single transformational deal to offer. In many ways, Cameron’s hands are tied. Repetition of UK support for permanent Indian membership of the UN Security Council leaves New Delhi cold, as does willingness to overhaul the International Monetary Fund. Intentions are good and well, but Britain cannot act alone. Similarly, it is Brussels that holds the cards over the long-awaited EU-India Free Trade Agreement, a key objective for New Delhi in the absence of a deal on Doha. Cameron could, in theory, grab good headlines in India by throwing open the doors to its entrepreneurial class, as America has done by creating a ‘start-up visa’ that links residency rights to job creation and capital formation. But this would sit ill alongside his pledge for sharp cuts on immigration, and would require him to face down the prevailing phobia.

Transatlantic ‘special relationships’ have often been underpin

ned by personal chemistry: Prime Minster Manmohan Singh, who turns 78 soon, will probably not provide that spark. Cameron and Osborne will need a rapport with a new generation of Congress leaders. The pre-eminent figure is, of course, Rahul Gandhi, 40, son of party leader Sonia Gandhi and the late (assassinated) prime minister Rajiv Gandhi. As the direct descendant of three PMs, Rahul is the odds-on successor to Singh, even though he has never held ministerial office. But given the volatile nature of the subcontinent’s politics, the Conservatives also need to look beyond the first family, to rising stars such as Jitin Prasada, Sachin Pilot and Jyoti Scindia, respectively junior petroleum, telecoms and commerce ministers, all three still in their thirties.

But even if there is no single game-changer during this visit, Cameron could start by bringing the relationship into focus in three ways. He could appoint a high-profile business figure as a special envoy: Richard Lambert, the outgoing director-general of the Confederation of British Industry, would be ideal. At present, Britain’s attempts at leverage have been undermined by the fragmentation of its diplomatic and commercial representation. UK Trade and Investment, which represents British exporters, duplicates the work of the UK-India Business Council and soon-to-be abolished regional development agencies. Bodies representing the Mayor of London get confused with one linked to the City of London Corporation. Rival parliamentary groups also subdivide the limited bandwidth of the Indian establishment. Someone needs to co-ordinate the chaos.

Next, Britain must show that it understands India’s concerns about a rushed retreat from Afghanistan. New Delhi fears that Washington and London, with the support of Islamabad, may eventually allow some elements of the Taleban to be incorporated into the Afghan state. There are fears that an emboldened Pakistan could fill a power vacuum, re-emerging as a check on Indian ambitions. And, worse, that militants would return from Afghanistan and head straight for Indian-administered Kashmir. The tinderbox Muslim-majority valley is seeing the biggest anti-India demonstrations in years, for which New Delhi blames Pakistan-based militant groups. If western forces scuttle out of Afghanistan, in a manner that leaves Kabul gravitating towards Islamabad’s sphere of influence, this will heighten the risk of conflict between South Asia’s nuclear-armed rivals.

The third way that Cameron can quickly bring the relationship up to date is to overhaul the aid. It is, to put it mildly, unusual that India — a country with its own nuclear and space programmes — is the largest single recipient of British overseas aid. Such aid should be immediately diverted into our Afghan programmes. It is true that there are 450 million living in poverty in India and that its economic wealth, per head, is less than half that of China. But New Delhi can now fund India’s development needs. It is, after all, rich enough to have a substantial foreign aid programme of its own.

The moral arguments are finely balanced, but pragmatism suggests that the British government should aid countries that cannot afford to fund their development rather than those that take the cash because it is going free. Moreover, New Delhi would prefer Britain to keep its money: it kicked out most small country donors in 2003. The US some time ago stated that it was ‘walking the last mile’ in India, leaving the UK accounting for almost a third of all foreign aid to the country. That is an anachronism, which bears the traces of a former imperial power clinging on for old times’ sake, unaware just what progress its most cherished colony has made.

There are still occasional glimpses of that older India, one riddled with post-colonial insecurities needing affirmation from London. When the Queen last month pulled out of the forthcoming Commonwealth Games in New Delhi, citing a ‘heavy workload’, there followed a spasm of self-doubt. Indian newspapers accused the monarch of ‘snubbing the Commonwealth Games’, noting that these were the first that she would be missing since her coronation. But such traces are fast disappearing. The new India is one whose companies are snapping up British rivals, whose economic growth rivals anything in Europe and which is looking forward to helping shape this young century. It is an India which needs neither British aid, nor validation of its progress. As the British delegation will next week discover, we now need India more than India needs us.

Jo Johnson is MP for Orpington. He was the Financial Times bureau chief in New Delhi between 2005 and 2008.