Introduction

Good morning ladies and gentlemen.

It is always a genuine pleasure to be in India. I would like to thank Mr. Sisodia for giving me the honour of addressing India’s premier think tank. I follow in the footsteps of my colleague, Gerald Howarth, who had the honour of addressing you last month; he sends his warmest good wishes. When I say ‘Think Tank’ I mean the ancient ideals of sharing vision, sharing ideas, and squaring up to shared challenges, but in a modern context. The desire to meet shared challenges head-on has been a major factor in my commitment to strengthening British-Indian relations.

Our relationship is unique.

Britain and India are ideally placed to collaborate with one another across a whole range of sectors and issues. Part of that means seizing every opportunity to exchange ideas and experiences on the issues that face our two countries – which is why I wanted to visit the IDSA while I am in India.
So, today I would like to talk about three aspects of the relationship between Britain and India:

• First, the strategic relationship itself;
• Second, the role that Defence plays in our strategic relationship;
• Third, the role which British and Indian industry has in underpinning both these relationships.

A Personal Relationship

Before I do, let me say a little about my personal links with India. It is individuals, not countries, who have personal relationships. Like many before me, I’ve been mesmerised by all that India has to offer ever since I first visited in 1996. And I made it my personal mission to support this relationship.

Like so many Britons, though, my links go back much further. My second name, James, comes from a relative who lies buried in a military cemetery in Meerut.

That 1996 visit was an eye opener for me. It alerted me immediately to the scale of what was happening here economically, and the implications for India’s place on the world stage. Successive visits have reinforced these initial impressions, but there was a problem.Our ties of history and language, with large expatriate communities in both countries, made us natural partners, but something wasn’t working.

So I was determined to use my role on the Business and Enterprise Select Committee of the House of Commons to give British industry a wake-up call, and improve our trade relations with India. Because we were not always as engaged with India’s markets as we should be. Far from it. (I think India is now the largest manufacturer in the UK through Tata.)

We did not fully appreciate the rate at which the Indian market was liberalising, and we were losing out. And UK plc needed a more joined-up approach. Thanks, in part, to the timely work of the Select Committee I chaired, I think British industry has woken up. I’m particularly proud of my role in helping to set up the UK-India Business Council – I describe myself as its “godfather”. Bilateral trade between Britain and India is now worth almost £12 billion.

A Strong Strategic Relationship

However, our trade relationship, though vital, is just one part of a far greater whole. As strategic players on the world stage, Britain and India need strategic partners. I founded the Conservative Party Friends of India. I was one of those who impressed on David Cameron that he should visit India as soon as possible after becoming leader of the opposition, with a serious message of commitment.

This he did, making India his first major overseas visit after becoming Leader of my Party, and again last year leading the largest visiting British delegation of any Prime Minister in recent memory. As the Prime Minister said during his visit, “There are partnerships we want to create, friendships we want to elevate, dialogues we want to extend.”

We are determined to build a strong and enduring strategic partnership between Britain and India that recognises the enormous economic and political opportunities for both nations. Because the world has changed greatly in a short time, and we must all change with it. The Cold War is far behind us.

The nature and character of conflict itself are also changing. The strategic shock of 9/11 shattered many previous assumptions. And that has big and important consequences for the role of military force around the world. In Britain, we believe that this requires an adaptive Defence posture to make our Armed Forces among the most versatile in the world.

SDSR

The means to achieve these ends were set out in our long overdue Strategic Defence and Security Review. As many of you know, the SDSR is designed to ensure that we will retain our place among the very top rank of the world’s military powers, supported by the fourth largest Defence budget in the world. We have a military presence in many of the world’s most challenging places and we maintain a global military reach. So we will retain a full range of traditional capabilities – not least a powerful state-of-the-art carrier strike capability from early next decade. We will also invest in advanced programmes that will provide flexibility for the future – for example, in unmanned and cyberspace technology.

We have had to cut back in some areas: because the threat is no longer as great; because technology has moved on; or because, as we address our budget deficit, resources that by definition are limited were needed elsewhere. We have the largest structural deficit of any major western country in the world. Reaching these decisions was very, very difficult.

There are legitimate pulls and pushes from every part of Government; from industry; from academia; from the media; from friends and allies; and of course from those that the SDSR is designed to serve – the British people, and our Armed Forces. Not all of these pressures faced up to the financial and strategic realities of the post-Cold War world.

SDSR Implementation

Now that we have an agreed policy baseline for the UK, the biggest challenge is: how do you implement radical proposals? We need to take our time to work through the decisions required to implement the vision. They are not straightforward and they are not easy. We must ensure that the headline force structures agreed are now implemented, including all the detailed arrangements which this implies.

But we also need to make sure the growth of capability is coherent and compatible with current operations – to make sure that where we reduce we do so without creating undue pressure elsewhere, and where we strengthen capability we do so with new efficiency.

This is a political challenge as well as an organisational challenge. There are also some issues which will need specific review – our Reserves for example – which will impact on much cherished institutions with powerful and persuasive supporters. And we have launched a Defence Reform Review to re-evaluate fundamentally the way the Ministry of Defence itself is structured and managed, and how it delivers capability.

Three things helped us above all during the SDSR process. It was foreign policy-led which made it clear that our national interest requires our continued full and active engagement in world affairs. This in turn helped us to be clear about our priorities in Defence: current operations in Afghanistan, and developing a Future Force for 2020 and beyond that will remain one of the most sophisticated anywhere in the world. And it was a collaborative process across government, with full input from the military, civil servants, think tanks, industry, and of course the elected politicians themselves.

A Strong Defence & Security Relationship

What the SDSR also confirmed was that we must reinvigorate our unique – but frequently neglected in recent years – network of alliances and relationships, particularly where self-interests overlap. Britain and India have clear over-lapping self-interests which are a strong basis for our future relationship. Our interests are best served by a stable and prosperous South Asia. We’re both tackling the modern scourge of international piracy.

And we’re both determined to combat the threat from trans-national terrorism. I was in mid-air, en route to Mumbai, when the 2008 terrorist attacks took place there, including on the hotel I was intending to stay in – the Oberoi. The attacks of 26/11 – like the attacks of 9/11 in the US and 7/7 in Britain – are a stark reminder of the brutality and barbarism of trans-national terrorism. Co-operation on countering this threat should be a key part of our enhanced strategic partnership.

On top of this, the circle of international decision making has become wider and more multi-lateral. So we’re both committed to international institutional reform and improving their effectiveness. That’s why Britain has long supported India’s desire to become a permanent member of the UN Security Council – and we’re delighted that India has just taken up its non-permanent seat. Let’s hope we can make it permanent soon.

And that’s why the strength of our bilateral Defence and Security relationship is so important. The relationship between our Armed Forces is very close. There were successful exercises across the three Services last year – something we want to increase – and we look forward to the Indian Army’s participation in an Army exercise in Britain later this year.

Our intelligence and police services are working together closely – not least as we approach next year’s Olympics in London – and we wish to learn all that we can from you following the successful Commonwealth Games here. And across the British government we place such importance on building personal relationships.

This year promises to be an unusually intensive period of high level Defence and Security engagement between Britain and India. These visits real tangible evidence of our desire to increase the breadth and depth of our strategic relationship. Whatever the reason, when you deal with us you will always find a true friend – and I believe that word is the right one to use.

A Strong Industrial Relationship

However, while the political and military relationships are strengthening all the time, I believe we could be doing much more on an industrial basis. We are dealing with challenges of unrivalled and increasing complexity. Every country is.
The key lesson of the Cold War was that economic strength, power and influence, and national security go hand in hand. It was no surprise that the attacks I mentioned earlier all took place in global financial centres. Britain understands that; India understands that. Of course, we are not starting in the same place.

The Indian Government is using its Defence acquisition requirements to help build an indigenous Defence industry. We understand that technology transfer is a key component in developing India’s indigenous capability. That Research and Development plays a central part in this. And that offset is a key enabler for enriching India’s technology base.

In Britain, with an established Defence industrial base – and in the context of the multi-national nature of western Defence companies – our default position is to use open competition in the global market, and to buy off-the-shelf, or as close to it as possible, whenever we can. Our approach is not laissez-faire. Sometimes we will need to protect underpinning technologies and skills. But we will do so only where having a domestic capability gives us the ability to protect our operational advantage and freedom of action – and where these are essential for national security. We must also consider export related issues early in an acquisition programme’s life cycle. That thought lies at the heart of our approach to the new Global Combat Ship.

Yet we are not picking winners either. Therefore, the question facing us in Britain is: how do we foster a climate in which Defence and Security companies are resilient, and can flourish, without using the Defence budget to subsidise industry?

That’s why we’ve launched a consultation paper – we call it a Green Paper – that will ultimately define our approach to equipment, support, and technology for UK Defence and Security. And in this sprit we were delighted to see in the new DPP 2011 some liberalisation of the offset regulations here in India. This will give British companies scope to come up with more innovative proposals, and I hope this is a portent of things to come more broadly. It’s also worth considering that R&D collaboration allows partner nations to develop technology that they would not be able to have or develop solely on their own; it plays a key part in the understanding necessary to allow technology transfer.

Opportunities

All of this presents us with many opportunities. For instance, I attach great importance to Defence Science and Technology. That’s why I am firmly behind developing a collaborative relationship between our own research organisation – the Defence Science and Technology Laboratory – and the DRDO here in India. We look forward to formalising this shortly in a new Letter of Arrangement.

And of course the opportunity for our Defence and Security companies to collaborate – on both British and Indian Defence programmes – is one of the reasons I am here in India – and I’m going to Bangalore to make the case at Aero India. We’re delighted that the contract for the 57 additional Hawk aircraft was signed last year which makes Hindustan Aeronautics Limited the largest manufacturer and the Indian Air Force the largest operator of Hawk worldwide.

We want to explore the opportunity for India to become involved as a Partner nation in the design and development of our Global Combat Ship I mentioned earlier. There are a number of countries who have requirement similar to that of the Royal Navy we hope to build a partnership, in which India will play an important role. And later today, I shall be announcing that General Dynamics UK is delivering an innovative approach to sharing its Intellectual Property with its Indian partner – HAL.

These are outstanding examples of bilateral Defence and industrial partnership, and point the way forward to an even closer relationship. But of course, developing an even closer relationship will require trust and confidence. So the message must go out load and clear: if industry promises something to their customers, they must deliver it. Government must play its part too.

Take the Eurofighter/Typhoon which is a competitor in the project to meet the Indian Air Force’s Medium Multi-Role Combat Aircraft requirement. I don’t need to tell you that Typhoon is an excellent aircraft. But I do want to reassure you that the British Government is four square behind this German-led bid. Should the aircraft be selected, the British Government will do all in its power to ensure that the project is a success for the Indian Air Force.

Conclusion

I said at the beginning that Britain’s relationship with India is unique. Yet our relationship could – and should – be every bit as special as the extraordinary special relationship Britain has with the United States, based on democratic values, mutual respect, and the shared challenges which bind us today.

I understand that this will not happen overnight. I also understand the importance of patience with a purpose. The baseline we share is that our prosperity and security is bound up with those of others. And building a strong and enduring strategic partnership between Britain and India will rely heavily on exports, investment, shared R&D, opening markets, ensuring access to resources, and promoting sustainable global growth.

In a month when India welcomes the world of cricket to its shores, I liken this to building a partnership between two great batsmen in a Test match. There will be dot balls, bouncers, and, I dare say, the odd Chinaman.

But our vast shared experience gives us a unique opportunity to collaborate, and makes building a match-winning partnership just that little bit easier.