India-uk trade pact likely to get a fillip

INDIA’S CHANCES of entering into a Free Trade Agreement (FTA) with the United Kingdom will now brighten post Britain’s plan to exit from the European Union. Among the EU countries, UK is India’s third largest trading partner. Brexit is beneficial for India in the sense that the UK will now be looking to tie up trade agreements with other countries like India, a commerce ministry official said on Friday asking not to be named.

When asked on the FTA issue, commerce minister Nirmala Sitharaman on Thursday said, “I would think, they (EU) would need time now to assimilate this outcome. Once they assimilate the outcome, they will only then respond...i will talk to my counterparts.”

She said Brexit will affect currency volatility and have immediate impact of Indian exports as British pound and euro will be devalued. “The impact of volatility of the currency is something which might have an immediate impact on our exporters...(but) India’s fundamentals are strong so we can face eventuality of the situation. We will keep a close eye on currency volatility,” she said.

FTA with the UK is expected to be beneficial to India especially in the backdrop of recent trade formations among countries which exclude India, such as, the proposed Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU, and the Trans-pacific Partnership (TPP) trade pact among 12 countries including the US, Japan, Malaysia, Vietnam, Singapore, Canada, Mexico, Brunei, Australia, New Zealand, Chile and Peru. Signing an FTA with the UK may be somewhat easier than the proposed Broad-based Trade and Investment Agreement (BTIA) under negotiation since 2007 between India and EU. The BTIA has seen many hurdles with both sides having major differences on crucial issues like intellectual property rights, duty cut in automobile and spirits and liberal visa regime.