The year 2018 marks the 100-year anniversary of the end of World War I, and there’s a lot to be learned about inter-global dynamics. Here, we focus on the UK and India, and how a century has evolved the political and business relationships between two countries where one used to rule the other.
Some historians have argued that one of the lasting impacts of World War I is that it ignited India’s independence movement. What most people don’t know is that more than a million Indians fought on behalf of Britain during the war, and that India sent vast resources to assist the British in battle, including livestock and supplies.
But it didn’t seem that India received the validation it deserved for its contributions. In addition, while the UK appeared to have benefited from India’s efforts, the same cannot necessarily be said for India. In a 2014 international survey to UK respondents by the British Council, India wasn’t a top-of-mind association with World War I; however, when the survey was administered to India respondents, Indians felt that their country was still feeling the aftermath effects of World War I. The discrepancy, it appears, is that India did more of the giving and Britain more of the taking during the war.
The relationship between India and Britain goes back hundreds of years, before World War I and tracing back to the early days of the East India Company that was founded in 1600. Throughout history, their relationship has had its fair share of ups and downs. However, it seems as though a strong working relationship between the two will be critical for the future of the two governments.
Most notably, UK Prime Minister Theresa May made India her first overseas visit upon taking office. Post-Brexit, India could play a vital role in helping the UK make progress, particularly when it comes to trade. India is positioned as the fastest-growing economy by gross domestic product (GDP) through to 2020, according to the World Bank. The UK economy and its businesses can stand to benefit from India’s market, particularly as India Prime Minister Narendra Modi has made strides in transforming India into a digitally adept country. And vice versa.
Prime Minister Modi’s government has a pro-business agenda, and he is working to create healthy bilateral trade between India and Britain. Some Indian companies are embedded in the UK and are important to the UK economy. Indian companies in the UK paid a combined UK corporation tax bill of £650 ($914) million in 2016, up from £500 ($704) million the previous year, according to a recent Grant Thornton report. This number would be even higher if other taxes including payroll and value-added tax (VAT) were included, the report added. It showed that 12 Indian companies each employ more than 1,000 people in the UK.
What does all this mean? It’s clear that India’s emancipation from British rule hasn’t exactly left a lot of hard feelings, at least not when it comes to business and politics. Both have come a long way in the past 100 years. Time can be healing, after all. The UK has come to recognize India’s role, not only as a benefit to the UK, but also as a standalone economy and culture. India is coming to see how the UK can help them continue to grow as they play a bigger part in the global economy.
In perspective, India wasn’t the first or only country in history to break away from colonialism. Perhaps the lesson in all this is that each country has a set of strengths to offer that deserve to be seen. Not all countries are the same, and to prosper as a global economy, countries will need to leverage each other’s differences and see their value.
Today, many investors in developed markets remain reluctant to invest abroad because of a fear of the unknown. India is a nuanced market that is evolving daily, and we believe it has significant potential as a long-term investment. Its relations with Britain can certainly help develop that potential.
Foreign securities are more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standards, and political and economic risks. These risks are enhanced in emerging markets countries.
Image credit: Lebrecht Music and Arts Photo Library / Alamy Stock Photo