India-uk summit paves way for free trade talks
Decide to work together to maximise potential of digital economies
India and the UK on Friday committed to deepen their trade relations, paving the way for expedited talks on a proposed Free Trade Agreement (FTA).
During the 14th Joint Economic and Trade Committee (JETCO) between Commerce and Industry Minister Piyush Goyal and the UK’S International Trade Minister Ranil Jayawardena and International Trade Secretary Liz Truss, both nations decide to adopt an enhanced trade partnership as the first step on a wider road map for more bilateral trade ties. Work is underway to reduce barriers to trade since both countries completed a Joint Trade Review in 2018.
“The UK’S new Global Tariff Schedule (UKGT) will bring benefits of up to £40m per year for Indian exporters, assuming all duties are levied,” the British High Commission said after the meeting, adding that India was now the second largest investor in the UK economy.
The UK has heavily batted for the new UKGT, which serves as a ‘building block’ towards increasingly open trade. Alongside this, UK companies have secured recognition and registration of polyhalite, a multi-nutrient fertiliser promising higher crop yields that is mined in the UK, enabling them to export it to Indian farmers.
Both the countries have decided to work together to ensure maximising the potential of their digital economies, including on data regulation and interoperability.
The UK raised the issue of trade barriers for British businesses across a range of sectors, including food and drink, health care and life sciences, information technology and data, chemicals, and services.
Goyal recently stressed that the government had offered to begin trade talks with both the UK and the European Union after the Brexit exercise was over. New Delhi remains committed to secure early harvest trade packages with both before work on a full preferential trade agreement can happen, he said.
However, an FTA may not be a priority for British businesses. According to Uk-india Business Council Group Chief Executive Richard Heald, much of the UK industry is already invested in India with research facilities, developmental & logistical capabilities, manufacturing & assembly plants and extensive sourcing supply chains.
With over 5 per cent of the organised sector in India being British owned, along with some 800,000 workers, Heald believes companies would prefer smaller, incremental, internal reforms that improve ease of doing business and continues to remove non-tariff barriers.