As the fastest growing economy of the 53 nations, India has the chance to be one of Commonwealth’s largest powers.

 

LONDON: Prime Minister Narendra Modi’s visit to the UK in April, the first Indian head of government to attend CHOGM in almost ten years, reflects a significant resurgence of Indian interest in the Commonwealth. The visit is symbolic of India’s growing activity in the organisation—an organisation which can assist India not just in furthering Prime Minister Modi’s commitment to advancing India’s international engagement, but as a platform through which India can acquire lucrative new trade partnerships.

The Commonwealth was not originally conceived to be a formal trade bloc, and the truth is that the Commonwealth’s trade potential has gone largely unexplored until very recent years. Whilst the Commonwealth is a great bastion of democracy, shared values and language, the trade benefits for members have long been overlooked. This is not to say that trade between members has not occurred—rather, that it has not been acknowledged that the latent commonalities which exist between nations are underpinned by the Commonwealth. Intra-Commonwealth trade costs are 19% lower when both trading partners are members, yet this “Commonwealth Advantage” is still not being fully capitalised on.

For India and the UK over the last 30 years, although still two of the largest contributors to Commonwealth trade, the Commonwealth opportunity has yet to play a key role in their respective trade policies. But with rapid growth having now accelerated India onto the world stage at an unprecedented rate, it is looking to consolidate its international position, and look outwardly to new trade prospects. For the United Kingdom, despite its history as one of the Commonwealth’s founding members, its trade engagement over recent decades has been engrossed by its European neighbours. Although the UK has developed profitable relationships with some Commonwealth countries such as Nigeria, with whom it is the second largest trading partner, there is still a wealth of opportunity to explore. India and the United Kingdom therefore find themselves in similar positions, albeit through different circumstances, with the Commonwealth emerging as a mutual network of huge trading potential for both nations.

In the last 10 years, the Commonwealth has undergone a significant renaissance, and is rapidly gaining attention as a lucrative platform for business and trade. Whilst the network may previously have been vulnerable to accusations of being an imperial relic, thanks to the commitment of many Commonwealth nations, including India, it is evolving into something far beyond its origin. The next chapter in the Commonwealth’s story is beginning, and India has the opportunity to play a leading role.

The Commonwealth itself offers an inimitable collection of potential trading partners, alongside the even greater possibility of a Commonwealth-wide trading area. These factors are no doubt attributable to the Commonwealth’s resurgence in appeal, however action is now required to turn this potential into a reality.

Prince Charles’ personal invitation to Prime Minister Modi to attend CHOGM was a very clear indication that the UK is keen for India to reengage with the Commonwealth. Yet whilst stronger ties with India are of course beneficial for the United Kingdom, this was not the principal motive behind this invitation. In very simple terms, India is home to 60% of all Commonwealth citizens, and one quarter of intra-Commonwealth trade involves India. India is therefore an obvious and natural leader for a re-imagined Commonwealth.

It is no secret that as the fastest growing economy of the 53 nations, India has the chance to be one of the Commonwealth’s largest powers and loudest voices. This extends further than just powerful status however, as the Commonwealth also offers India coveted access to emerging African markets.

India’s exposure to these markets should not go understated, as the Commonwealth offers something quite unique for India; a multilateral group, without any one member exerting an overwhelming dominance. Where China dominates the BRICS alignment, and the US many other multilateral international bodies, the Commonwealth offers the chance for India to have an extremely influential voice in a huge international grouping. Considering factors such as India’s long-standing desire for a permanent seat in the UN Security Council, opportunities such as that presented by Commonwealth leadership will have a marked and positive influence on its new global image.

Moreover, India has the opportunity to engage some of its trillion-dollar economic weight in Commonwealth markets, with a notable lack of Chinese opposition. India has been very public about its desire to enhance India-African trade, which currently totals USD $52bn, and the Commonwealth may well emerge as a direct route to achieving this goal. The Indian government has found itself in direct trading competition with China on certain fronts, but this will not be such a problem in the Commonwealth.

Whilst the UK can help to facilitate the development of a Commonwealth trade agenda, given their size, key demanders of trade growth will no doubt be India and Africa. With a burgeoning middle class, and a growing desire to strengthen its international ties, India is certainly poised to make a dramatic impact on Commonwealth trade figures; an impact that will be mutually beneficial for both India itself, and the wider Commonwealth.

Considering the sheer magnitude of India’s economy, influence and its population, if India wants to play a central role in the development of the Commonwealth, other countries will absolutely follow suit. India has a key role to play in cementing the establishment of the new Commonwealth, which is truly on the cusp of something great.

Lord Marland of Odstock is Chairman of the Commonwealth Enterprise and Investment Council.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*

*