Pressure is growing on Prime Minister Boris Johnson to take a harder line against India’s attack on private investors when he meets with Prime Minister Modi at the G7 reports the Financial Times.
Tory MPs, led by James Daly and Paul Britow have urged PM Johnson to address India’s “piratical” attitude towards foreign investors warning under Modi, India is moving closer to a country that’s “a halfway house between democracy and despotism.” They write further, “…every step forward in UK-India economic relations is dependent on respect for the rule of law & protection of investors. This is the foundation that supports increased investment, standards recognition, technological co-operation and so much more. It provides certainty and predictability, which in turn unlocks investment and encourages risk-taking.”
Former U.K. Minister and MP David Davis noted that the current Indian government had “not committed itself to the path that the west would prefer” and is intent on seizing“by force the property of at least three American and British companies operating in India.” He asked: “Does India’s future lie in committing to the western alliance of free democratic nations, or will he instead attempt some halfway house between democracy and despotism, between freedom and oppression, between the rule of law or the arbitrary whim of rulers, between the west and Chinese Communist party?”
British and American investors, led by Cairn and Devas, have seen their investments seized, leadership harassed and arbitration awards ignored by the Indian authorities. Cairn in recent days has taken steps to seize Air India assets in the U.S as a result of the recalcitrance of the Indian government.
What Other British Luminaries Are Saying
Former UK Conservative Member of the European Parliament and Director-General of the British Chambers of Commerce, John Longworth, wrote in the Daily Telegraph about the risks for the UK in pursuing a trade deal under Modi given “India’s brute force behaviour” towards Western investors and ongoing “unjustified expropriation” of private property such as Devas’s.
Tim Worstall, a senior fellow at the Adam Smith Institute in London, wrote City AM that, “India is not a natural partner in free trade. Its morass of regulations, barriers, and taxes make market access extremely difficult. The Modi Government’s watering-down of legal safeguards for foreign investors and disregard for legal judgments, adds to the concerns for British businesses.”
The London-based Institute for Economic Affairs recently explored the challenges of doing business in Modi’s India. This included the negative direction on property rights and investor protections: “The government is systematically breaking Bilateral Investment Treaties (BITs), ignoring court and arbitration rulings, cancelling contracts, expropriating private property and using state institutions such as the tax authorities and the courts to prosecute the very parties whose rights they should be protecting.”
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