Bilateral ties between India and UK are expected to undergo a paradigm shift as Theresa May succeeds David Cameron as the new Prime Minister.
May, who was previously UK Home Secretary, emerged the sole contender for the Prime Minister’s post. She also becomes UK’s second woman Prime Minister after Margaret Thatcher.
Just as her name was announced as the successor to Cameron on Monday, May stated that her goal will be to create a “strong, new, positive vision for the future” of UK. However, what remains to be seen is how her vision with UK’s partner countries shapes up, especially India. Cameron was regarded to be closer to India.
“Everything depends on what the terms of negotiations will be between Britain and EU. We are closely watching the developments. I strongly believe that with Brexit happening, UK will look at India more than ever before. India-UK ties are much stronger and it does not depend on any individual,” Naushad Forbes, President, Confederation of Indian Industry (CII), told BusinessLine .
He believes May will equally look towards India for the growth of the UK economy just as Cameron did.
India invests more in the UK than in the whole of EU. The combined turnover of these businesses has increased by £4 billion in 2015 to £26 billion, said a report by Grant Thornton UK LLP in association with CII.
FTA and Masala Bonds
The UK has already made it official that it wants to expedite a Free Trade Agreement (FTA) with India that can be implemented when Britain officially leaves the EU.
Britain’s Business Minister Sajid Javid visited India last week, meeting the senior Ministers of the Narendra Modi government as well as officials of the Tata Group.
“I am confident that a deal can be done on this. India already has trade agreements with over a dozen countries. The efforts to make a deal with the EU have made little progress in nine years. India and the UK should now move quickly to come to bilateral arrangements,” said Conservative Party Leader Geoffrey Van Orden.
On the other hand, Masala bonds are expected to get a boost, with the UK showing signs of stabilisation, albeit slowly, experts believe.
“Business will be as usual; rather, it might grow with UK needing India more than ever before. India, China and the Commonwealth Territory at large will be crucial for the new PM to look at,” said Sanjaya Baru, a foreign policy expert, who was also advisor to former Prime Minister Manmohan Singh.