WHILE living in Delhi, in a former identity, Bagehot had a friend who threw the best parties in India’s relentless, cut-throat capital. An ebullient Punjabi, he had a genius for bringing together politicians and tycoons with artists, an occasional ascetic and just the right sprinkling of Bollywood eye candy to lift the spirits without lowering the tone. They were colourful, free-spirited affairs; save once, when George Osborne showed up.

The chancellor of the exchequer was accompanying David Cameron on one of his first foreign trips as prime minister. So were five of their cabinet colleagues, a caravan intended to express the Tory leader’s desire to forge a new “special relationship” with India. And the scene in that Delhi sitting room must have looked encouraging. Some of India’s biggest hitters were gathered in Mr Osborne’s honour, including Mukesh Ambani, India’s richest man, and three or four ministers. The atmosphere was restrained. The guests wore formal business suits, despite the summer heat. Curiously to this columnist, who had heard little praise for Britain during four years in India, there was a palpable tension and curiosity about the stripling chancellor who stood, lightly perspiring and chatting to anyone who approached. It was a demonstration of the Anglocentricity that resides—almost as a guilty secret—among India’s rich elite. No German or French finance minister would have drawn such a crowd.

Yet India’s affinity with Britain is not deep. Indian tycoons have houses in London, but send their children to study in America. Nor is it evident among most politicians, as Mr Cameron discovered. Neither Sonia Gandhi, the power behind India’s coalition government, nor her son and probable heir, Rahul, was available to meet him in Delhi. Their steward, India’s prime minister Manmohan Singh, was available, but unforthcoming. Mr Cameron is still no closer to realising his dream of a new special relationship—India does not, in fact, go in for such arrangements. Nor, despite the naive hopes expressed by some in the prime minister’s party, will it offer special breaks for British business.

Happily, Mr Cameron, who is due to return to Delhi next week, does not bruise easily. Improving British-Indian relations remains one of his most important foreign-policy objectives. This is well judged. They were long neglected by his terror-fighting Labour predecessors. And Britain badly needs to boost its business with fast-growing emerging markets, India especially. Britain is India’s seventh biggest export market—after the Netherlands—and its 21st biggest source of imports. This is despite the two countries sharing a common law and language and aspects of culture. Britain also has 1.5m subjects of Indian origin, representing its biggest ethnic-minority group. This shared inheritance should make Britain and India far closer, in trade and otherwise.

The main reason they are not is commercial. As India rapidly industrialises its most urgent need is for Western technology, such as German machine tools and French nuclear know-how. It would benefit from British services, too. By opening its financial sector to foreign investment, India could substantially boost its economic growth rate. Unfortunately, it is in no hurry to do so: the country’s financial, legal and retail sectors are all to varying degrees protected.

History also makes Indians resistant to British diplomatic charm. Resentment of the colonial period is one of the defining principles of modern Indian identity. Those who consider the historic ties between India and Britain to be special are therefore unlikely to view them positively. India’s foreign-policy gurus, for example, consider Britain biased towards Pakistan—just as, they argue, it was towards Indian Muslims in colonial times. Less well-educated or younger Indians (who learn little in school about Britain’s 200-year rule in India) have few feelings about Britain either way. On a rare visit to India, Tony Blair was asked in a television interview whether he acknowledged Britain’s responsibility for the seemingly inextinguishable conflict in Kashmir. The former prime minister, appearing momentarily nonplussed, stammered that the colonial era was now irrelevant. “Then why are you here?” many Indians would have wondered.

A passage to insurance reform

All the same, Mr Cameron’s efforts to update Britain’s relations with India have borne some fruit. Britain has opened a deputy high commission office in Hyderabad and plans another in Chandigarh, plus five trade offices in other Indian cities (albeit these plans have been held up by India’s reluctance to issue the necessary permits). This is part of a wider effort to improve British ties to state governments in India’s fastest-growing regions, including poor Bihar as well as industrialised Gujarat. An announcement that Britain will soon stop dispensing aid to India also promises, in the longer term, to put relations on a more even footing. And India, in response to an economic slowdown, has meanwhile eased protections on some services. Pavers, a Yorkshire shoe seller, recently became the first foreign firm to open single-brand shops in India.

There have been setbacks, too. Mr Cameron’s efforts to curb immigration to Britain has led to a slump in applications for student visas from India and offended its government. The Tory party’s rowdy Euroscepticism has also done damage. Shyam Saran, formerly India’s top diplomat, notes that many Indian businesses are chiefly interested in Britain as a potential conduit to Europe. Like Britons, they are no longer sure whether it will stay in the EU. “There is a lot of confusion in India,” he says. “Should we look at the British-Indian relationship as a bilateral?”

Britain had better hope not: it needs all the diplomatic ballast it can get in its dealings with India. The former jewel in its imperial crown considers, probably rightly, that Britain needs India a lot more than it needs Britain. To his credit, Mr Cameron is the first British prime minister to have registered that important truth.

Economist.com/blogs/bagehot