What Rishi Sunak as the new PM means for the UK and India

How did Sunak get the top job?

After Prime Minister Liz Truss released a disastrous mini-budget that tanked the markets, it became clear that her days were numbered. He announced his resignation after just 45 days in office. To contest for leadership, candidates had to have the support of at least 100 MPs. Sunak was faster than the mark despite a late challenge by former Prime Minister Boris Johnson, who quit the race despite claiming the support of nearly 100 lawmakers. The only other contender, Penny Mordaunt, dropped out at the last minute, leaving the former finance minister alone in the fray.

What are Sunak’s challenges?

Britain is facing a serious economic crisis. The country has been battling low productivity and wage growth since the 2008 global financial crisis. These long-term economic problems are made worse by inflation. Inflation has been fueled by a surge in demand following the reopening of economies post-Covid-19 and the energy crisis caused by the war in Ukraine. The country has also pledged billions for defense spending due to the security threat from Russia. Balancing spending commitments with the need for sound economic management will be the defining challenge of Sunak’s premiership.

What are Sunak’s strengths and weaknesses?

He has a reputation for strong economic management. As finance minister during the Covid-19 crisis, Sunak led the British government’s economic crisis response, including measures to help small businesses. However, his major weaknesses will be political. He is trusted by Boris loyalists who hold him responsible for toppling Johnson’s government.

What can the global economy expect?

Markets welcomed Sunak’s election. The stock markets and the pound recovered some ground as news of their rise in 10 Downing Street came. Sunak will face the important task of building new trade ties for Britain after Brexit. The country is facing a series of talks with the European Union over the future of its economic ties. As the third largest economy in the West, Britain’s economic success is critical to the developed world’s economic prospects in a bear market.

What will this mean for India?

The possible return of a stable government is welcome news. The two countries were set to conclude a free trade agreement, which was initially to be signed by Diwali. It was derailed by anti-immigration comments made by Truss’s Home Secretary Suella Braverman, who has since resigned. Under Sunak’s leadership, India would expect some degree of political stability, leading to progress on a free trade agreement. Their great position on immigrants will be the key to the success of any free trade deal.