After Brexit, Indo-UK trade pact could run into hurdles
LONDON: Leading lights of the Theresa May government have shown much enthusiasm for a Free Trade Agreement (FTA) with India after Brexit, but there are indications that negotiations will not be easy, even if New Delhi seems to have moved beyond harping on the visa issue.
The United Kingdom began the procedure to exit the European Union on Wednesday, and the discourse has moved to the next stage of incorporating and repealing EU laws in British law. However, actual trade talks with India cannot begin till Brexit is formalised — by March 29, 2019, if all goes according to plan.
For some time, India’s main focus has been on visa hurdles for business and the ability to transfer employees from India to offices in the UK. The thinking is that for other categories such as student visa, Indians have other choices and it is the UK’s loss if they go elsewhere.
The current understanding in New Delhi was articulated by commerce minister Nirmala Sitharaman in a recent BBC interview, where she said the visa issue “sounds like non-tariff barriers in the services sector”, and noted that “we are not being treated as old friends any longer”.
“It’s a tight professional engagement, while we are also looking at India’s strengths and demanding our due place in the trade deal… Hope there will be necessary course correction during formal talks on a trade deal after Britain leaves the EU.”
London believes that unlike the yet-to-be-reached FTA between India and the EU, it will be easier to forge such a deal with the UK when it is free from the bureaucracy of Brussels.
However, Vince Cable, who was the business secretary in the David Cameron government, is not so sure, even though May hinted at new visa facilities for frequent Indian business travellers during her November visit to New Delhi.
Cable told HT: “Britain’s current crop of ministers seem not to have taken on board that the attempted EU-India agreement foundered not because of the rest of the EU but, in substantial part, because Britain rejected it.”
“There is no sign of rethinking on the visa issue. I don’t think it (UK-India free trade pact) will happen. There was quite a serious obstacle on the mobility issue in the trade talks,” he said.
“The present mood in the British establishment is that UK and India would be in a better position to increase its trade by direct relations as it would not be hindered by European Union’s bureaucratic rules. One hopes this will come true,” senior solicitor Sarosh Zaiwalla said.
FICCI’s UK director, Pratik Dattani, said: “Now that Article 50 has been formally triggered, we expect to see the pace of discussion within government in terms of engagement with countries like India increase.