India: General Election 2014

Lord Dholakia Excerpts

Thursday 23rd October 2014 Grand Committee

Asked by

[Lord Dholakia]

To ask Her Majesty’s Government what assessment they have made of the outcome of the 2014 general election in India.

[Lord Dholakia (LD)]

My Lords, I take this opportunity to wish all colleagues in this House a happy Diwali. This is probably the most festive season for us, and the right day on which to open a debate on this subject.

This debate is timely. The election of Narendra Modi and the BJP majority Government is a unique opportunity for the United Kingdom to reinvigorate momentum in its relationship with India. We were right to re-engage with Narendra Modi in 2012 after the 10 years of diplomatic isolation of the Gujarat Government where he was the Chief Minister.

Let me first declare my interest. I was honoured to be appointed as Deputy Prime Minister Nick Clegg’s business adviser. We led the first UK trade delegation to India since its landmark election in May. This gave me a first-hand opportunity to see why India matters to the United Kingdom.

Britain is in a unique position to work more closely with India because we have educational, historic, cultural and people-to-people ties between our two nations. The Prime Minister, David Cameron, has visited the country three times since 2010, and many Ministers have followed. As I said, the Deputy Prime Minister, Nick Clegg, led the first UK trade delegation in September. Only last week we had the visit of India’s Foreign Minister, Sushma Swaraj, to the United Kingdom.

We also have the distinction of having here one of the largest populations of the Indian diaspora, estimated at 1.5 million. However, let us not underestimate India’s position worldwide. Narendra Modi has already visited Japan and the United States. There is a positive dialogue with China and a renewed relationship with neighbouring countries and the Middle East. We cannot continue to plead our special relationship with India. We have to work hard to build renewed confidence in our bilateral relationship.

Evidence of this is that our diplomatic network in India has become the largest in the world, and credit must go to High Commissioner James Bevan for this. There is now increased co-operation on foreign policy and a genuine understanding on matters of defence and security. There are still irritants in the field of education, where there is a drop in the number of students coming to the United Kingdom for further education. Bilateral trade is likely to double by next year, and there is a renewed co-operation on matters of research and innovation.

Prior to the BJP’s victory, India had gone through a period of stagnation with a declining economy. A decade of Congress rule had failed to combat corruption or enact major policy measures. The economic reform had not materialised. The BJP’s election win was the logical outcome. The country was crying out for a strong Government and the BJP provided that. It is to Mr Modi’s credit that it is the first time in 30 years that any single party has secured an absolute majority. I well remember that the Conservative Party’s election slogan during the Macmillan Government was, “You have never had it so good”. The BJP’s slogan had a similarity: “Good days are coming”. We now have the most powerful Prime Minister that India has had for many years.

People’s expectations are great and we have to wait to see how these are delivered. So far we have seen clarity in Mr Modi’s vision of domestic matters. His Independence Day speech on 15 August set out his vision on governance, which included a plea for a unified, selfless, skilled and peaceful India. He was not afraid to identify issues that have featured prominently in the past years. These included concerns about rape, equality, and the safety of women and girls. There was emphasis on reform, which involved more devolution of power and control which would result in more economic liberalisation and less central control. Mr Modi launched his flagship programme aimed at tackling poverty by ending financial untouchability. Under his project, bank accounts would be provided to millions without access to formal banking facilities.

There are, of course, challenging times ahead. It is estimated that at least 60% of India’s population is below the age of 35. It is further estimated that 10 million to 15 million young people enter the labour market each year. A high percentage of this number is employed in informal sectors. The emphasis has to shift towards the organised sectors. This gives the BJP Government a unique opportunity to reform labour laws and rebuild the industrial sector. The problem is massive but the BJP Government in Gujarat can point to its economic growth, which has continually exceeded that of other states in India. Then there are areas such as the agricultural sector, where securing income for farmers and improving the outdated infrastructure are essential. This will also require the co-operation of state government, which has not been easy in the past.

So what has Britain to offer India? It was obvious during our delegation’s visit that the new Government have placed economic development high on their agenda. India needs investment, and the UK is already its biggest G20 investor—and we can do more. The EU is India’s largest trading partner and India is a strategic partner of the EU. However, India wants more trade. Our bilateral trade is over £16 billion and we can certainly improve on this. In addition, India is looking for capital, and the City of London is the world’s biggest financial centre and well placed to provide expertise and advice. We have the investment, expertise and experience to make that happen.

In the field of education, some of our leading universities and colleges already have offices in India, attracting thousands of Indian students to the UK every year. The Minister is well aware that despite 85% of applications to the British high commission being approved within two weeks, there is a drop of nearly 20% in students coming to the United Kingdom. We need to examine our immigration policies to ensure that there are no detriments here. In addition, we should promote more student exchanges, joint research projects and learning partnerships both here and in India. I would welcome the Minister’s action in this matter.

There are issues of regional priorities, and the international community is looking to see how India intends to continue strengthening regional ties. Prime Minister Modi’s first act on his inauguration was to invite SAARC countries, including Pakistan’s Prime Minister Nawaz Sharif. This good start was halted in its tracks with the cancellation of the India-Pakistan talks. India did not take kindly to the Pakistan high commissioner meeting Kashmir separatist leaders. India’s position on Kashmir is well established, and the state is an integral part of India. Evidence of that fact is that successive Indian Governments have made efforts to ensure that a free and fair democratic process is followed in this state. Prime Minister Modi’s election campaign talked about Hindu-Muslim unity and invited both countries to join the fight against poverty. Evidence from a recent poll found that more than 68% of Indian Muslims felt safer under the Modi Government than under previous Governments. Over the years, the plight of the Kashmir Pandits cannot be ignored. There has been systematic cleansing of Kashmiri Hindus and terrorist activities from across the border have continued. India’s position on Kashmir has been consistent. It expects Pakistan to tackle extremism and cross-border terrorism. It demands justice against the Mumbai suspects. The prize for co-operation is high. Full trade normalisation will benefit both countries.

I welcome the UK’s position. India is a mature democracy. There are political upheavals in Pakistan. It is not for Britain to mediate between India and Pakistan. Nawaz Sharif has to take steps to demonstrate to India that he is sincere in wanting to improve relations. Terrorism from across the border is unacceptable. We need to exercise care that in debates and discussions, particularly in this country, we should not support those who are determined to undermine the world’s largest democracy’s process of economic development.