New Delhi: Bilateral relationship between the UK and India has been on a roller-coaster ride in the recent past. While controversy surrounding the Indian government’s decision to amend a tax clause retrospectively to make firms including Vodafone Group Plc. pay a substantial amount of tax was opposed by the British government, racial attacks against Indians and stringent visa rules in Britain have created a dent in the relationship. Sir James Bevan KCMG , the British high commissioner to India, in an interview, tries to unravel what he calls “myths” about Britain and explains what lies ahead for both countries. Edited excerpts:
With the visit of the UK Prime Minister David Cameron to India in 2010, the expectation was that bilateral relationship between the two countries will go to the next level. Things seem to have not moved as expected. Is the colonial hangover proving too heavy a liability for both sides?
I don’t think there is a colonial hangover. We regard India as an equal partner at the world stage and I believe India feels the same about the UK. My experience is that Indian and British people are both proud of their respective histories but they understand that what we should be focusing on is the future not the past. We have actually made a lot of progress since 2010. Every year in the last two to three years, Indian companies have invested more in the UK than they have invested in the whole of the European Union. Trade numbers are growing significantly in double digits. Investment into India is a big success story. Last year, a UK company, British Petroleum, made the largest investment ever in the BP-Reliance gas deal. Across the board, whether it is trade and investment, science and technology, people-to-people contacts, foreign policy, security cooperation, I do see progress. Is it the kind of progress that we would like to see? Of course not. Is it going in the right direction? Absolutely.
There have been increasing reports of racial attacks on Indians in the UK. What could be the reason?
Indians form the largest diaspora in the UK. It is the richest and the most successful. I don’t actually think Britain is becoming a more dangerous place to be in. We did have the tragic murder of an Indian student a few months ago. That was an extremely unusual and isolated incident. The evidence of that is we are still seeing 30,000-35,000 Indian students come every year and almost all of whom have a wonderful experience.
Though Indian students show great interest in studying in the UK, the visa rules are considered very stringent.
One of the myths that I hear in India is that Britain has closed its doors. Britain’s economy and future depend on keeping our doors open to the brightest and the best. Britain is a small island with a high population and there are social pressures that we have to take into account. It is true the British government has a policy of reducing the overall number of net migrants to the UK. On the other hand, we have a policy of keeping our doors open to every legitimate student coming to the UK, including from India. We have not set a limit for the number of students that can come to the UK every year deliberately because we want students to come in. We have a good record, 75% Indian students who apply for a visa get one. We allow Indian students to work in the UK after finishing studies. In April, we tightened the rule. Under the new rule, Indian students can remain in the UK and continue to work after their university education for at least three years, provided they get a graduate-level job.
One of the contentious issues is the Vodafone tax issue. Now that the government has said it will not take a rash action, has it come as a relief to investors in the UK?
Let’s wait and see what happens. It is a very important issue. Vodafone is one of the biggest investors in India. It, over the last several years, has paid about £5 billion tax to India. So the idea that Vodafone is a tax dodger is wrong. Two sides are talking to each other, that is a good thing. We are closely following the current discussions very closely. We hope the Indian government and Vodafone can come to a mutually acceptable solution. I don’t want to comment on what the outcome might be.
Is Vodafone willing to settle the matter with a fractional tax payment?
That is a matter for Vodafone to decide, what works for them and their shareholders.
There was some controversy about the British aid to India with one Indian minister saying it is “peanuts” and India does not want it. What is the current status?
There are millions of people whose lives have been made better by British development programmes. We have an agreement with the Indian government about the level of aid that we will give to India between now and 2015. At present, between 2011-2015, Britain is giving £280 million every year. After 2015, there will still be a development relationship between the UK and India. But this will be a very different relationship. I don’t expect it to be based on the current arrangement that is primarily about traditional grant or aid. We are also talking to the Indian government about what would happen after 2015.
How has the London Olympics helped Britain beyond the goodwill it created?
Firstly, there is a physical legacy. There are some tremendous facilities in London which will be used by generations of people. Then I think there is a psychological legacy. I think the Olympics and Paralympics would have encouraged millions of people around the world to take up sports. Thirdly, there is a repetitional legacy. By delivering a successful Olympics, Britain said something about itself to the world. It said we are proud about our past and confident about our future. We can really do big and exciting things well and in style. That message will hopefully resonate in India and elsewhere in the world.