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China TimesBritain and Europe count on India to contend with China

Britain and Europe count on India to contend with China

Profile photo: Container terminal at the Port of Mumbai, India (June 29, 2017)
Profile photo: Container terminal at the Port of Mumbai, India (June 29, 2017)

China has achieved a rapid economic recovery from the new crown epidemic, but the star of the major economy in 2021 is India, which has a faster economic development. Analysts predict that India will become the world’s fastest-growing major economy this year. They say this is the beginning of a long-term trend.

Investment bank Nomura Securities predicts that China’s economy will grow by 4.3% in 2022, but India will grow by 8.5%. The governments of the United Kingdom and other European countries are paying attention to this and redouble their lobbying efforts to enter the Indian economy and sign a trade agreement with New Delhi. The Indian government is protectionist, and some import tariffs are the highest in the world.

India’s gross national product is approximately US$2.8 trillion, and forecasts show that India will become the world’s third largest economy within 25 years.

In order to sign a free trade agreement with India, British Prime Minister Johnson is preparing to relax immigration regulations, making it easier for thousands of Indians to live and work in the UK. The British Secretary of State for International Trade Anne-Marie Trevelyan (Anne-Marie Trevelyan) will lead a delegation to New Delhi later this month to propose the prospect of loosening immigration regulations for Indian citizens and reducing the cost of work and student visas. A long-standing requirement of the Indian government.

Britain’s previous efforts to reach a grand trade agreement with India have failed. Former British Prime Minister Cameron and six cabinet ministers went to India to expand business in 2011. Downing Street said it was “the largest trading mission in history.”

Cameron said in the interview that he hopes to elevate the relationship between Britain and India to the “next level.” In just two years, it dropped from 13th to 16th in the ranking of trading partners of emerging economic superpowers.

After more than a year, no senior member of the Indian government paid a return visit to the UK. The leaders of Belgium, France, Germany and the United States have since visited India, and more countries hope to reach trade agreements and start new businesses.


Although India has been hit hard by the epidemic, the current rapid economic growth has knocked suitors on the door again. For Western leaders, the driving force for developing a closer relationship with India also comes from the determination to use India to counter China’s influence.

One option the British ministers are considering is to create a trade agreement similar to that between Britain and Australia, giving young Indians the opportunity to work in the UK for three years. Another option is to allow Indians who graduated from a British university to stay in the UK to work after completing their studies.

A government official told The Times, “India’s technology and digital space is still extremely protectionist. If we can even open up a little bit, it will let us lead.”

The UK and India agreed to deepen cooperation last year and signed an “Enhanced Trade Partnership” agreement. British officials said the agreement would create $1.4 billion in new trade between the two countries. But the UK hopes for bigger prizes to help compensate for the reduction in business with the EU after Brexit.

Neither the United States nor the European Union have reached a bilateral trade agreement with India, but they both hope to expand trade with India. The EU is India’s third largest trading partner, accounting for 11.1% of India’s total trade in 2020, reaching US$72 billion. According to the European Commission, the European Union is India’s second largest export market, accounting for 14% of India’s exports, second only to the United States.

The European Union was again interested in negotiating a free trade agreement with India in May last year. The EU has conducted intermittent negotiations with India for many years. The leaders of the 27 EU member states and Indian Prime Minister Modi also held a video summit. EU officials say that concerns about China have brought the EU and India closer together. Cleo Paskal, an associate researcher at the Royal Institute of International Affairs, believes that India is also alert to China’s expansion ambitions.

She said in an article recently, “Although the Himalayas have recently become more strategically active, a safe Indian Ocean is also important to India. About 90% of India’s trade and oil imports pass through this region.”

She also said, “Indian strategists are all upset about China’s increased marine activities in the region.”


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