By Shriya Vora | Edited by Ruth D’Souza
Rishi Sunak’s appointment as Britain’s youngest and first non-white, Indian-origin Prime Minister has caused quite a stir in the whole world, especially in India. A country that was ruled for years by the British is now finally seeing history make a full circle.
Some have viewed this fortunate appointment as a Diwali gift to the country. Britain has come a long way from its colonization mindset to finally appreciating merit and the diverse cultural background of its own country.
- Sunak acquired a Tory seat of Richmond in Yorkshire in 2015. Succeeding Sajid Javid, Sunak became the chancellor of the exchequer in 2020 under Johnson.
- In 2022, Rishi Sunak received the support of 100 MPs and hence faced no competition in ascending to the position of Prime Minister.
Sunak and the India-UK ties:
Covering the recent headlines of major newspapers is the line “make India-UK relationship a two-way exchange”. Sunak has portrayed immense respect for his Indian heritage and roots and has out rightly said that he wants to revamp the UK-India relationship.
Recognizing the growing amount of opportunities that the country promises, he believes that there should be a two-way exchange between both countries as opposed to a one-way connection. He thinks that with the increasing number of start-ups in India, the country will be able to produce a lot of job opportunities for the people of Britain.
He pledges to improve the situation which would enable British students to easily acquire education from world-class Indian institutions, work in various astounding start-ups, and travel easily to India. Moreover, it becomes effortless for companies in both countries to work collaboratively and ensure economic progress and development.
The long-awaited FTA deal:
The most awaited economic decision between the two countries is the free trade agreement. This agreement would increase the bilateral trade by thrice the current amount, which means it is aimed at increasing trade from $31 billion to $100 billion by 2030.
The free trade agreement between the two countries will increase imports as well as exports, expand investment opportunities, and enhance the allocative efficiency of resources to improve productivity and open up international competition. Moreover, it will become easier for both countries to invest, and trade, and there will be an increase in the trade of services. The most important as well as a beneficial outcome of the trade will be the reduction in tariff charges on various products that are traded.
It has been revealed that the majority of the conditions have been agreed upon. There is a long discussion underway on the duties charged on financial, professional, and legal services as well as business visas and the duty on scotch.
Both countries have eyes set on various industries and are waiting to enter the market to sell their respective products. The UK wants a larger Indian market share for products like electrical equipment, transport equipment, medical devices, parts of automobiles, and alcoholic beverages including wines, scotch, spirits, and certain fruits and vegetables.
On the other hand, India wants to gain access to the British markets by exporting tobacco, leather, footwear, textiles, food and beverages, etc. Moreover, they aim to expand digital and other important services between the two countries. This deal will boost the manufacturing ecosystem and increase productivity due to increased competition.
The UK is already an important investor in India and has contributed a huge lump sum of 32 billion dollars in terms of foreign direct investment since the 2000s. This trade deal will increase the productivity, as well as the customer base of business for both countries. It will ensure an economic upswing for the UK by over 3 billion dollars by 2035. It is also said to increase the middle-class category in India by 250 million by 2050. The huge boom in business for both countries would entail numerous job opportunities and growth in the country.
Sunak’s consequential actions:
Sunak’s first response to choosing Suella Braverman as the home secretary in his cabinet came as a shock to many especially because a few days prior she quit the post due to a technical breach of government rules.
Braverman has pointed out the issue of immigrants living in the UK, the majority of whom are Indians and she fears that a trade deal would lead to an increase in migration. Her statements and her subsequent important position in the cabinet prove to be harmful to the FTA.
On the positive side, Sunak also appointed James cleverly as the foreign secretary who voiced out his full commitment towards the trade deal between the two countries and to strengthening the relationship. He even spoke about counter-terrorism, bilateral relations, and the Ukraine conflict with his Indian counterpart S. Jaishankar.
The road ahead:
Sunak’s actions portray that he remains loyal to his country and will always think about the country’s best interests. Consequently, he needs to face the challenges portrayed by the falling economy.
The most pressing concern for Sunak lies in re-uniting the Tory house. A divided government would only lead to less dominance in international trade as compared to a stronger, united, and undivided parliament. The Tory house is one with a lot of resentment due to the abrupt changes in leadership. Gaining people’s confidence in the conservative party is the first step.
Apart from that, Britain is also facing a state of slow growth combined with high inflation, a direct result of increasing energy prices due to the Ukraine war as well as a budget deficiency. The increase in inflation can be cured with tight monetary and fiscal policies which would lead to higher taxes and interest rates. This would then make the already cost of living crisis worse.
Moreover, Sunak needs to curb the growing problem of migration in the country. In 2020, more than 30000 people reached the UK illegally. He must seek a plan to reduce the number of refugees and control visa regulations. He must also focus on trade rules regarding the Netherlands, which borders Ireland, restricting trade movements, due to Brexit.
To boost the economic situation, he will have to make sound policy decisions. The road ahead seems strenuous, yet British citizens and certain members of the parliament have full faith in him.
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