Great Britain is home to about 1.5 – 1.7 million people of Indian origin. As of 2001, persons of Indian origin comprised the largest ethnic minority in Britain.1
Although the total size of the Indian diaspora in the United Kingdom (UK) is smaller than that in the United States (US), it has a unique influence. Constituting about 1.8% of the population of Britain, this group accounted for roughly 6% of British GDP.2 For India, the diaspora is an important source of financing, competences and know-how, as well as a significant lobbying and soft-power instrument.
What Makes the Indian Diaspora in the UK Special?
The Indian diaspora in the UK has certain distinctive features that make it unique. Many of them relate to the long and complex process of formation, with four distinct waves of immigration.3
Starting from the middle of 19th century, the number of members of the Indian elite coming to Britain became significant. Many outstanding Indians studied in British educational institutions, including the leaders of the Indian Independence movement — Mahatma Gandhi, Jawaharlal Nehru, B.R. Ambedkar and others.
Between the UK, India and other colonies of the British Empire, there has always been considerable movement of Indians serving in the British army. After India and Pakistan were formed in 1947, there was confusion with documents and citizenship of many Indians who were outside India during the Partition. Many of them settled in England.
After the Second World War, the unemployment rate in the UK on average remained very low. When the British economy grew stronger and consumption increased by the early 1960s, Britain’s requirement for workers in sectors such as transportation, healthcare, consumer goods and manufacturing increased considerably. A second wave of migration originated mainly from Punjab. Historically, a majority of the Indian servicemen within the British army came from this region.
Between the UK, India and other colonies of the British Empire, there has always been considerable movement of Indians serving in the British army
Kerala and big cities like Kolkata, Mumbai and Delhi supplied the UK economy with junior and mid-level medical professionals and teachers. The process was becoming so large-scale and caused so much criticism in Britain that the term “reverse colonisation” came into use.4 In 1962, the Conservative government of Harold Macmillan adopted the Commonwealth Immigration Act, aimed at limiting the scale of immigration from India, Pakistan and countries of the Caribbean.
A third wave of immigration started in 1967 and peaked around 1972. At the time, Britain saw a mass migration of Indians from East African countries such as Kenya, Uganda and Tanzania, where the course towards “Africanisation” was proclaimed after obtaining independence from Britain. This led to the ousting of residents of non-native nationalities from business and social life. These countries were home to large Indian diasporas that took shape in the 19th and 20th centuries, mainly originating from Gujarat and Punjab.
Having realised the scale of the approaching wave of immigration from East Africa, the British Government hastily adopted the Second Commonwealth Immigration Act in March 1968, re-directing the flow of migrants towards Australia, Canada and the US. In emergency circumstances, however, the law was not enforced too strictly. The number of migrants from East Africa, mainly from Uganda and Kenya, at the end of the 1960s and early 1970s equalled up to 50,000.5 Although most of these families had to leave all their property and businesses back in Africa, they adapted successfully to their new place of residence. They soon became one of the most prosperous groups among the Indian diaspora in the UK and came to form its business and cultural elite.
Some of Britain’s most influential Indian families have their roots within the African Indian community and still maintain close connections not just with India, but with their African countries of origin too. The most prominent of these families are the Chandaria family (Uganda) and the Madhvani family (Kenya).
In the 1990s, the fourth wave of immigration consisted mainly of young professionals filling vacancies in the National Healthcare System, IT and Telecommunications. Approximately two-thirds of all software engineers who came to work in Britain at that time were from India. This well-educated and highly qualified professional immigration, in combination with the entrepreneurs among the second and third generation of migrants, define the face of the Indian diaspora in the UK today.
Some of Britain’s most influential Indian families have their roots within the African Indian community and still maintain close connections not just with India, but with their African countries of origin too
Second and third generations of Indian families adapted quickly to the changing environment and became the mainstays of professions such as architecture, design, journalism, law, banking and healthcare.
UK-India Political and Business Relations
Prior to the late 1990s, the Indian diaspora in the UK had not been considered by the Indian government as a true ally. Part of the reason was a perception of political extremism widespread among some of the communities within the diaspora. The gradual change in attitude towards the diaspora started in the late 1990s and continued through the early 2000s.
In 2000, the Ministry of External Affairs of India set up the High Committee on Indian Diaspora chaired by Dr L.M. Singhvi, Member of Parliament and former long-serving Indian High Commissioner to the UK. In 2002 a report on the Indian Diaspora was presented to the Indian cabinet.1 It was the first one of its kind and signified the changing relationship between the Indian government and the Indian diaspora worldwide.
Multiple bilateral agreements during the early 2000s strengthened the significance of the diaspora for relations between Britain and India. These agreements included the Joint Declaration on Strategic Partnership between Britain and India, signed by the British Prime Minister Tony Blair and his Indian counterpart Manmohan Singh on September 20, 2004.6
As a result of their demographic concentration in certain areas, notably London and the East Midlands, the votes of the British Indians can influence election results.7 British politicians gradually came to accept the importance of the Indian diaspora, both because of the high priority of their relations with India and for domestic electoral reasons.
The most well-to-do and influential representatives of prominent Indian business families, such as Lord Swraj Paul, Lord Karan Bilimoria and others, also played a significant role in intensifying the dialogue between Britain and India in the early 2000s. They were among the first ones in Britain to realise India’s growing potential and to bring the need for closer partnership to the attention of politicians on both sides.
British politicians gradually came to accept the importance of the Indian diaspora, both because of the high priority of their relations with India and for domestic electoral reasons
Once the diaspora established itself as an influential economic factor at the end of the 20th century, this influence made the Indian government officials look more attentively at developing a coherent policy with regards to the overseas Indian community. Today, currency transfers to India by the members of diaspora amount to about US $70 billion per year on average. This exceeds the volume of foreign direct investments attracted by India and adds 3.5% to India’s GDP annually.8
The most public validation of the significance of the Indian diaspora in the UK came in the form of a massive rally at Wembley stadium in London in November 2015, where Prime Minister Narendra Modi, accompanied by the UK Prime Minister David Cameron, addressed the gathering of over 60,000 British Indians.
British-Indian Family Business
Along with occupying significant posts in the government, academia, finance and politics, the Indian diaspora in the UK showed a natural affinity for family business. The family business trend appeared even among the Indian communities that earlier had no such traditions. This occurred partly due to racial discrimination and glass ceilings experienced even by the most successful professionals of Indian origin.
The first generation of migrants set up successful small and medium-scale businesses, often employing fellow community members and developing them into successful ventures during the years of fast economic growth in the UK between 2001 and 2007. The sectors where the UK Indian business is most active ranges from business process outsourcing, steel and pharma to textiles, apparel, hotels, retail, food processing, electronics, beverages and entertainment.
Along with occupying significant posts in the government, academia, finance and politics, the Indian diaspora in the UK showed a natural affinity for family business
Second-generation owners are now picking up the companies at less favourable times. Their main challenges include expanding the business globally, re-establishing links with India and considering other geographies such as the US to compensate for slow growth in the UK. The continuing uncertainty over Brexit and likely loss of the EU market looms large over family business within the Indian diaspora in the UK.
British-Indian Family Business Landscape
Many Indians feature in the highly publicised ratings of the richest entrepreneurs and most successful business owners in the UK. Some are at the top of these lists.9 Not all of their companies fit the generally accepted definition of a family business. These criteria include the ownership of the majority of shares by members of the same family and the transition of inter-generational ownership to second or later generations of family members to be drawn from the single dominant family that owns the business.10
Nevertheless, the list of businesses that do fit these criteria is impressive. The Gopichand and Srichand Hinduja family, whose positions strengthened further in recent years, are frontrunners in this category. It also includes the heavyweights such as the Lord Swraj Paul family as well as Matharu brothers.
The list of names left outside of this family-focused “circle” is equally strong. The cultural distinction of the Indian diasporic business is that extended family ties beyond a single last name play a significant role in the firms’ management. In this sense, one can hardly call these businesses non-family. The companies built by Lakshmi Mittal, Naresh Goyal, Ramesh Kansagra, Ranjit Boparan, Vijay Patel, Surinder Arora, Rajesh Satija Ram, Jasminder Singh, Cyrus Vandrevala, Anil Agarwal, Arora brothers, Robin Singh, Gulu Lalvani are such ‘extended family’ businesses.
Factors such as geography and citizenship make zooming in on Indian (family) businesses in the UK complex. For instance, the UK-based India-born and educated entrepreneur Sri Prakash Lokhia is, in fact, an Indonesian businessman. He lived in Indonesia for many years and started his business empire there, although it is now based in Singapore. Cambridge-educated Yusuf Hamied is the Indian businessman whose company remains headquartered in Mumbai, even as he spends considerable time in the UK and has business and philanthropic interests there.
It is important to mention the Tata Group in this context because it forms a league of its own. Though Ratan Tata is an Indian (and not a British Indian) businessman, it is owing to his company’s activities in the UK in early 2000s that the larger British public and decision makers woke up to the fact that India is changing fast and needs to be looked at with different eyes in the 21st century.
By 2007, India was the second largest investor in the UK after the US. Noticeable purchases by the Tata Group played a significant role. Tata bought Corus Group in 2007 and Jaguar Land Rover in 2008. The Tata Group became the largest private employer in the UK, which also meant considerable political influence.
The UK Indian Diaspora Today: Trade, Politics, Culture
Indian businessmen were probably thinking pragmatically at the time of their grandiose UK shopping of 2005-2008. However, there was a certain symbolism in British purchases by Tata Group and other Indian companies at the time. The UK media carried articles around the theme of “empire strikes back.”11 It is important to note, however, that Indian ownership was preferable to British decision makers relative to other nationalities. The Russian, Brazilian and Chinese contenders for Corus, for instance, gradually withdrew their bids, unwilling to compete with an Indian purchaser. The steel manufacturing giant headquartered in London was bought by the Tata Group in 2007.
Britain’s aim during this period, and in subsequent years, was to increase its exports to India. Today, UK-India trade is of top priority to Britain given the country’s forthcoming exit from the EU. Special emphasis has been made by the UK government on promoting free-trade agreements with the countries of the Commonwealth, including India.
While investment levels have been satisfactory from both sides, the large trade deficit of Britain with India has been the source of concern for many British politicians for many years. David Cameron actively pushed for more trade between Britain and India between 2010 and 2016, when the numbers fell dramatically. He appointed several British Indians on key positions relating to India. Priti Patel became the ‘UK Indian Diaspora Champion’ and Alok Sharma was appointed the Infrastructure Envoy for India. Both were new posts set up by the Prime Minister.
While investment levels have been satisfactory from both sides, the large trade deficit of Britain with India has been the source of concern for many British politicians for many years
Generally, UK Indians have been underrepresented in British politics. But the general parliamentary elections of 2015 saw 59 candidates of Indian origin running in the elections, making it the highest number so far. In total, over 15 representatives of the Indian diaspora have ever been elected to the House of Commons and over 20 British Indians received a place in the House of Lords of the British Parliament.
The most significant trends that characterise the UK Indian diaspora today, however, are not reflected in the lists and ratings. In their ways of life, many representatives of the UK Indian community today are, in fact, closer to the traditional image of a prospering British family than the majority of the English households. The five o-clock tea and family photos with a backdrop of a picture-perfect lawn in the most expensive addresses of London, Birmingham or in Lamington Spa– these are markers of influence that have carried over from feudal British culture to modern UK Indian families who have ‘made it’. The Indians, especially the elites and particularly the business families, are maintaining what is almost gone in the English society: hierarchy, clan culture, respect towards elders.
Against the background of growing anxiety over religious extremism and migration from Middle Eastern, Eastern European and North African countries that hit Britain just before Brexit, the Indian diaspora was perceived by British society as an inherent part of Britain’s own culture, an element of tradition, perseverance and stability in the fast-changing realities of the 21st century.