Worsening outbreak a setback for India-UK Roadmap 2030

London

THE alarming Covid-19 outbreak in India is proving to be a setback to realising Roadmap 2030, the project that India and the United Kingdom hope will re-energise relations across trade and investment and other sectors.

Already, British Prime Minister Boris Johnson, who was hospitalised with Covid-19 just over a year ago, reluctantly cancelled his once-postponed visit to India, which was scheduled for next Monday.

Mr Johnson and Indian Prime Minister Narendra Modi now intend to meet virtually over Zoom later this month to discuss plans already put in place by their respective foreign and trade ministers.

The Indian leader has also been invited to be an observer at the next G7 summit in the UK in June.

India reported 314,835 new Covid-19 cases on Thursday, in what is the largest single-day surge by any country to date.

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The country has recorded over 16 million infections and 184,657 deaths so far, with hospitals strained to capacity and struggling with insufficient medical equipment to handle the overflow of patients.

British medical officers and scientists are concerned that a deadly "double mutant" variant of the virus, which is fast spreading across India, has already entered the UK.

The fear in the UK is that the current vaccines will be less effective against this mutation; 182 cases were already reported in the UK as at April 20.

So far, British health authorities have not decided if alarm bells should be pressed. But there has been widespread criticism of the government for allowing some 12 flights a day from India, with inadequate passenger landing restrictions in place.

The worry is that many of the thousands of travellers in recent weeks were infectious, without them even knowing it.

Belatedly, the UK's Health Minister Matt Hancock announced that India would be placed on the "red list" from Friday.

Except for unusual circumstances, only British or Irish citizens and Indians with residence in Britain will be allowed in from India, but they will be required to serve a 10-day quarantine.

In the past fortnight, shares of International Consolidated Airlines, which owns British Airways, plunged by 11 per cent.

The disruption by Covid-19 aside, both the UK and India say they remain keen to bolster economic, security, education and climate-change relations.

Now that it has exited the European Union, Britain needs Indian trade and investment to flourish and both sides also want to reduce their dependence on China.

India was the second-largest investor in the UK in 2019 and 2020, ahead of Germany, France, China and Hong Kong, going by data from the UK Department for International Trade.

There were 1,852 new inward investment projects from India in 2019-2020, representing a 4 per cent increase on the previous year. There are an estimated 900 Indian companies operating from a base in the UK.

In a paper for the Institute of Economic Affairs, Shanker Singham, the chief executive of law and trade consultancy Competere, estimated that bilateral trade flows are worth US$15.7 billion in goods and US$18.9 billion in services.

Published on Thursday, the paper states that India is already the UK's sixth-biggest trading partner, but goods trade flows have been stagnant for a long time and UK exports have declined.

"A substantial increase in bilateral trade flows has an even more significant role to play in terms of the geo-strategic dimension," said Mr Singham. "Major UK industries such as tech, food and drink, legal, educational and financial services could all benefit from a trade agreement where India opens up these sectors."

He said that, post-Brexit, the UK should "tap into the vast market of Indian students" who are dwarfed by the numbers from China.

Britain should also be "more accommodating" on business visas and provide improved access for India's agricultural exports, Mr Singham said. But he added that India must "reform" and open up the domestic economy and cut tariffs on certain foreign goods.

In February, UK International Trade Secretary Liz Truss mapped the path to a potential future free-trade deal with India.

"The UK-India trade relationship supports key industries such as technology and life sciences and around 500,000 jobs in each other's economies," she said at the time.