India, UK agree to bolster trade ties
nNEW DELHI: India and the UK agreed on Friday to deepen their economic ties by removing additional barriers and working on an enhanced trade partnership that could possibly pave the way for a free trade agreement.
During a virtual meeting of the Joint Economic and Trade Committee (JETCO), India’s commerce minister Piyush Goyal and UK’S international trade secretary Liz Truss also agreed to work on maximising the potential of the digital economies of the two countries, including on data regulation and interoperability.
The meeting was held against the backdrop of India’s efforts to boost economic activity to overcome the impact of the Covid-19 crisis and to forge cooperation aimed at shaping new supply chains and the economic order in the post-pandemic era.
The UK, which is in the process of exiting the European Union (EU), is keen to bolster economic ties with India, which is also being wooed by the 27 remaining countries in the bloc. India-uk trade was worth £24 billion last year, and India is now the second largest investor in the British economy. Truss and Goyal agreed to explore opportunities for expanding and deepening the trade relationship. “This will include an enhanced trade partnership as the first step on a wider roadmap for a deeper trade partnership, and subject to progress could lead to a future free trade agreement,” a statement from the British high commission said.
An Indian official familiar with developments said: “The UK is a very important ally of India and at this point in time, cooperation from the UK will be of immense importance. The UK has been supporting India’s cause at multilateral forums and we will further strengthen this relationship, which will span through trade, investment and cultural and strategic ties.”
Britain’s international trade minister Ranil Jayawardena, who also joined the meeting, raised the issue of removing barriers for businesses in a range of sectors, including food and drink, health care, IT and services.
The British side noted that the UK’S new Global Tariff, which comes into force on January 1, will benefit Indian exporters by reducing tariffs on their goods by up to £40 million a year, assuming all duties are levied. It was also pointed out that UK companies have secured registration for polyhalite, a multi-nutrient fertiliser mined in Britain that could help Indian farmers to increase yields while supporting a cleaner and sustainable environment.
“Increasing investment in each other’s markets is more important than ever as both economies seek to recover from the impact of Covid-19,” the British high commission’s statement said. The statement quoted Truss as saying that the meeting was an opportunity to “look at barriers preventing our trading relationship from reaching its full potential”. She described India as an “incredibly important partner” and said: “Today we agreed to look in detail at a framework for a deeper relationship. At this stage we want to keep all options on the table, including the possibility of a free trade agreement at some point in the future.”
Jayawardena also led a business plenary, organised by the UK India Business Council (UKIBC), where the ministers spoke with businesses from both sides about the shared ambition to deepen the economic partnership.
“We want to knock down existing trade barriers, create more good jobs and encourage innovation between two of the greatest democracies in the world,” he said.
Indian and British investments support more than half-amillion jobs in each other’s economies. There are 842 Indian companies based in the UK, employing more than 110,000 people and their revenues in the last fiscal were almost £41 billion.