“We are the strongest supporters of civil nuclear energy for India”

In 2003, when Sir Michael Arthur was appointed as the British High Commissioner to Delhi, tension between India and Pakistan was quite palpable. A year ago, Western diplomats had left India fearing a conflict between the two nuclear warriors. Then things began to change. Sir Arthur was a witness to the thaw that swept South Asia and the growing warmth between India and United Kingdom.

Sir Michael told Hardnews about how UK was backing US efforts to help India access civilian nuclear technology. He categorically states that Pakistan is a proliferating country and does not merit similar preferential treatment. He was very happy with the way the strategic alliance between the two countries was playing out on the ground.

Sanjay Kapoor Delhi

This is your first posting to Asia. How has it been?

It has been fantastic. For a British High Commissioner, India is a great place to be in. The last two-three years in India has been particularly nice. And I keep saying to London, that it is a continent and not a country. India is changing dynamically.

How do you quantify these changes?

The buzz of change is affecting economy, education, science, IT etc. India is the eighth largest investor in Britain as 500 Indian companies have a base in Britain. It is an enormous change from the situation that prevailed fifteen years ago. The Indian Diaspora comprises 2 per cent of Britain’s population. NRIs are most successful of all minorities residing in Britain.

Even though it is about 60 years since India became independent from Great Britain, Indians have never nursed any hatred for its colonial rulers.  How do you explain this?

That is interesting. I think this has something to do with Gandhiji and the quality of his revolution, which was non-violent and peaceful. Our good relations are a legacy of that revolution. I think India’s first generation did a fantastic job in putting itself together after independence. It may also have some thing to do with the fact that Britain focused in India on areas of health and education.

Well, after the 1998 nuclear tests, people who watched the Indo-UK relationship thought it had deteriorated considerably.

We are in a much better position than we were in 1998. Since Pokhran, there is much better level of understanding. We did disapprove of the nuclear tests back in 1998 but we are working positively to give India civil nuclear energy and for it to join the world community. We recognise it now. There has been an ongoing debate on how to preserve the authority of the NPT regime.

Do close ties with United States and its offer to give India civilian nuclear energy upset United Kingdom?

On the contrary we worked quite privately with your government and the United States government. We are very much involved in that process because we now support it. We are the strongest supporters in giving India the technology for civil nuclear energy as we understand India’s need for it. And we support US president Bush in his recent interest in India regarding nuclear energy.

Pakistan has demanded a similar deal in nuclear energy.

That is a different situation. We do not approve of proliferation and it looks as if proliferation has happened from Pakistan to other countries. We are not interested.

Britain has contributed in providing a veneer of respectability and legitimacy to the US fight against terror, especially its attack against Saddam Hussain’s Iraq. A similar charade is being played out against Iran now. What are your views?

We went to war, not just because our American allies went but we genuinely believed in the problem of WMDs and we had ten years of Iraq not complying with the demands of the UN’s Security Council on its inspection. With hindsight, we did not know enough. We strongly believed we went for the good.

Concerning Iran, we strongly support Iran for developing civil nuclear technology. They are the members of the IAEA. We have no problems whatsoever. But we are apprehensive of the fact that they don’t misuse the technology to develop nuclear weapons. We don’t want them to become a nuclear weapon state.

India has a large population living below the poverty line. DFID has launched initiatives in different states to fight poverty. Although there has been criticism about the way the funds are being utilised in certain states?

Our biggest programme in the world is in India. I think the money has been well invested. We’ve got a whole new health programme going already. We are investing in the state governments, for example in the rural sector and the education sector concerning the Sarva Shikhsha Abhiyaan. Some goes in the form of aid through the central government to the poor states like Andhra Pradesh, Madhya Pradesh and Orissa. We are putting money in the villages to help people develop new farming, business and livelihood techniques.

Ten years ago, British telecom came to India to take advantage of the liberalisation in the telecom sector but it left shortly thereafter as it felt that there were manifest problems constraints. Does the British industry still experience similar problems?

We would like to go further. We have come a long way from those ten years.

Telecom is going places. Firms have invested greatly. Britain is the second biggest investor in India. But there are sectors where we would like faster liberalisation like insurance, banking, retail and accountancy. We would like things to speed up a bit.

High custom duties on scotch whiskey are a major irritant. This leads to smuggling of whiskey to India. What is the status of the scotch whiskey industry’s demands to bring down the duties?

We’ve been urging the Indian government to reform this area. There are huge proportions of people importing in the grey economy because the taxation is very high. There is accumulative tax in some states. It can be near to 500 per cent which is disproportionate. We’ve been urging that some tax be brought down because that way counterfeit will stop and revenues will go up.

Recent joint venture exercises in Goa between the two navies have interesting implications. How do you understand it and the question is that whether there is a scope of joint policing of the two navies of some sea lanes against sea piracy?

This is the biggest ever joint operation. In terms of navy to navy, it is a big change. India has more regional maritime capability and soon will be working with other naval powers. We would be genuinely delighted if India joins the proliferation security initiative (PSI). 

Nepal has been an area of concern for the UK as well. What are your views on the subject?

India has clearly more at stake. We have a lot of affection for Nepal as well as a huge amount of emotion. We want this crisis to come to end. We believe the right way forward is a political solution. The base ground is: the Maoists have to come out from violence and join the political process. They have to be part of a political solution and not a military solution. We want Nepal to keep a ceremonial monarchy. But it is very fragile, and all parties must play a game together. We cannot advise India on its role in Nepal. India is directly affected.

What about the economy?

One of the striking features of our links with India is the volume of people moving between the two countries. We issued 3 lakh visas all for the durations of 6 months to 10 years. We have over 20,000 students in Britain when we had only about 5,000 five years back. It is a step change in the quality of people to people interaction. The trade is faster and growing. It should grow to about 10 billion dollars soon. We just got to know recently that 60 per cent of all investments to Europe from India come to the UK. London is the place to go to rule the foreign markets.

What about the issue of outsourcing? Does it bother UK?

Concerning outsourcing, of course we don’t like losing jobs. But we recognise that you are competitive. We recognise globalisation. I think the area where India has great potential is agriculture. In 5-10 years India could be one of the major agricultural exporters. Britain has a lot of expertise in supply chain management, profit and loss and those special fields.