A few months ago, Rishi Sunak, the first Indian-origin Chancellor of the Exchequer, was billed as the most popular candidate to replace Boris Johnson as Prime Minister of the UK. However, even after allegations of serious impropriety and Partygate, Johnson managed to stay on in Downing Street.
Sunak, too, emerged from his share of controversy after questions were raised about the tax status of his wife Akshata Murthy, daughter of Infosys founder NR Narayana Murthy and author Sudha Murthy.
In a chat with journalists before attending the India Global Forum’s UK-India awards, Sunak, 42, spoke on how people, trade and innovation will drive India-UK ties, the free trade agreement, the visa regime, financial services and working in his mother’s pharmacy.
“The UK is very supportive of India playing a leading role in the region and in the world,” he said, emphasising that the equation between both countries was a “partnership of equals.” Sitting in his office in the Treasury, Sunak sportingly took questions and admitted that the perception about India in the UK has not caught up with reality.
As finance minister, Sunak is closely involved in the FTA negotiations and is aware of India’s potential. India and the UK concluded the fourth round of talks for an FTA on June 24.
“India is a country that is looking forward and is looking to the future. Britain should not take for granted that India would always necessarily look up to Britain – we have to earn that place,” Sunak said.
Both countries expect the FTA will make it easier to buy and sell services from each other. Citing Covid-19 vaccine Covishield as a great example of India and the UK coming together, Sunak reiterated that greater defence and security cooperation would go a long way in strengthening the relationship between both countries.
Covishield was developed by Oxford University and Cambridge-based AstraZeneca and manufactured by the Serum Institute of India.
Sunak said that ultimately it is the consumers and businesses who drive trade between India and the UK. The UK’s exports to India amount to just over £8 billion and imports are worth £15 billion.
“The trade deal will reduce the barriers and we want both those numbers to go up,” he said.
“I had two economic and finance dialogues with my counterpart Ms (Nirmala) Sitharaman and those have been really productive,” said Sunak.
An MBA graduate from Stanford and former banker, Sunak said financial services offer enormous growth opportunities. He identified insurance and India’s aim to have sovereign green bonds as areas where Britain could help.
“India’s goal is to spread insurance across the entire economy because insurance is a great thing for enabling protection for individuals and growth. We can help with that because in the UK we have a fantastic insurance industry and bit by bit we have provided more of those products, services and expertise to Indian firms and citizens,” he said.
The UK has already embarked upon the path of sovereign green bonds and Sunak said London can be a centre to help India raise capital from around the world. Sovereign green bonds are issued to fund projects that have positive environmental or climate benefits.
“One of the defining movements of capital would be the flow of capital from the West into fast-growing India – that’s an incredibly exciting and significant event,” he said.
Perception versus reality
“The perception of India has not caught up with reality,” admitted Sunak.
Hinting that his visits to India have perhaps helped him to appreciate its growth story, Sunak said that “India has moved a long way from just being a place where low cost of labour was a major value add” to now, where “Indian companies are providing cutting-edge technology products and services.”
“India has the third-highest number of tech unicorns. It has the second-highest smartphone penetration,” he said.
India deserves to play a significant role in the region and the world, given its economic strength and cultural influence and there would be no greater champion of India taking that big role than the UK.
Pushing the narrative that India too is a land of opportunity, he pointed out that it is time that India opens up.
“The UK does not have the monopoly for opportunity; there is an enormous amount of opportunity in India,” Sunak said.
The chancellor said that Britons would also like to study and work in India and it should be easier for the people in Britain to get visas for India.
Global talent visa
Indian universities do not feature in the UK’s top 50 education institutes whose graduates can benefit from the Global Talent Visa. The scheme attracted criticism from Indian student bodies, which pointed out that none of the Indian Institutes of Technology or other premier institutes featured in the list.
“We had to use objective global rankings,” said Sunak. “It is not me or the UK government that did that. Three or four different international bodies that look at universities globally [who compiled that list].”
Besides, he said, Indian nationals who have graduated from the top 50 institutes can avail of the global talent visa to come to the UK.
Sunak said that of the three global talent hubs being set up by the UK, two are in the US and one will be in Bengaluru.
Much is known about Sunak’s chemist mother and physician father. But it is not widely known that his maternal grandfather was in the HM Revenue & Customs, whose working in some ways is guided by the Treasury, which he heads.
“I was part of a family that owned a small business. My mum was a chemist and we owned a small independent pharmacy and I grew up working in it. I did lots of things – I served in the shop, I worked in the dispensary, I did deliveries, I also did all the bookkeeping and the VAT returns,” Sunak remembered with some unalloyed joy and pride.
“My nanaji taught me how to [work on the books] because he worked at the HMRC so he taught us how to do the VAT returns so that we got it all right,” Sunak said.
Sunak missed out on visiting India with his family, but said he is looking forward to his trip later this year. He said he will use the opportunity to meet with Indian entrepreneurs and companies.
“My little daughter Anushka does kuchupudi dancing and as part of the Jubilee celebrations she was performing with her class in Westminster Avenue,” he said.
It’s not just Russia, but millionaires from around the world who use Britain’s business-friendly visa regime to settle down in the UK. Some engage in legitimate businesses and some seek to escape the law in their countries.
“We have taken very tough action to make sure that the UK is a place where we clamp down very hard on money-laundering and illicit finance,” he said.
He also referred to the economic crimes bill, which gives agencies more power and resources to fight ill-gotten wealth.
“We created registers where countries around the world share tax information and they publish registers of who owns what. We were one of the leaders in creating all of that and we are recognised as such by international bodies,” Sunak said.
First Indian-origin PM of UK?
Although Johnson is now firmly in the saddle and there are other aspirants to lead the Conservative party, it won’t be the last time that Sunak will be asked about becoming the first Indian-origin PM of the UK.
“My story was only possible because lots of people came before me – whether my parents or grandparents and others who broke down the barriers and endured things that I did not have to endure and paved the way for my generation to be able to do things. And it says an enormous amount about Britain’s openness and tolerance and warmth that someone like me is sitting here in the Treasury, not Downing Street, at the moment, and talking to all of you in this job. There’s lots more we can achieve,” he said.
Certainly, that includes moving to the PM’s office, which is next door to the Chancellor’s.
China and India
The Chancellor made it clear that the UK makes a distinction between China and India.
“The UK’s relationship with China will be clear-eyed and rooted in our values. With India, we are very supportive of India playing an influential role in the region and in the world. We want to help support India to do that particularly as both the prime ministers have announced greater defence and security cooperation,” Sunak said.