For a thoroughly modern politician, David Cameron appears to have some strangely antiquated ideas about how the modern global economy works. This week, the Prime Minister will board a plane to India in the company of scores of senior British businessmen. At the other end, much flesh will be pressed and the merits of British firms loudly trumpeted. A new defence contract for BAE Systems is expected to be brandished. This is the traditional way of conducting trade policy. It is also thoroughly outdated. If there is business to be done between Britain and India, the private sectors of each country are perfectly capable of getting on and doing it without politicians of either nation smoothing the way.
Of course, all the platitudes about the rising economic clout of India that we will hear this week are correct. At a time of global economic weakness, India continues to power ahead with estimated growth of 9 per cent this year. Because India has democratic institutions, its path to prosperity over the long term will probably be much smoother than that of authoritarian China. And because India, unlike China, is developing a domestic consumer economy, the foundations of its growth will be more robust. Britain certainly has a lot to gain by strengthening economic ties with its former colony.
But the best thing governments can do to facilitate such economic interaction is to scrap subsidies, dismantle protectionist controls and then, to put it bluntly, get out of the way. This idea that business deals should be brokered and sealed between national political leaders is dangerous. One only needs to look at the travails of BP to see the trouble that can arise when politicians start to regard themselves as champions of national firms.
The rhetoric that has preceded this trip is misguided in other ways. The idea being put around that there is a reservoir of goodwill towards Britain in India because of the legacy of Empire is wishful thinking. There is no British "special relationship" with India any more than there is between London and Washington. For an increasing number of young Indians, the Raj is history. They are just as likely to look to the US, China or Japan for business and economic opportunities. We delude ourselves if we imagine that a British accent confers any special privileges.
Where there can be said to be a strong connection between our two nations is in the estimated 1.5 million-strong Indian diaspora in Britain and the 34,000 Indian nationals studying in British universities. That is where our comparative advantage lies when it comes to trade: micro-level economic and personal contacts. And, ironically, it is here that Mr Cameron's Government has been unnecessarily destructive.
Ministers have pledged to impose a cap on non-EU migration and to restrict student visas. They are threatening to make it harder for spouses from the subcontinent to come to Britain. As Rajesh Suri points out in this newspaper today, it is increasingly difficult for restaurants such as his own to bring Indian chefs in to the country. Such frustrations might seem trivial set next to a multimillion-pound defence contract but, in the longer run, they might be more significant.
This prime ministerial trip is unlikely to do any harm. And if it improves bilateral relations between London and Delhi, enabling our two nations to work better together in international forums such as the climate change treaty negotiations, the Doha trade summits, or the United Nations, that is all for the good. But Mr Cameron would be well advised to spend the bulk of his time on this agenda and to leave the business deals to the professionals.Reuse content