India and the United Kingdom are doubling down on their talks to remove the non-tariff barriers that will allow the two countries a greater deal of market access. This will mark the formation of the first major free trade pact in the past 10 years. The two countries have been working towards zeroing in on a list of achievable items. The formation of such a trade deal was initiated by British Prime Minister Boris Johnson as a post-Brexit target that would help showcase the benefits of leaving the European Union. Simultaneously, the UK-India trade deal will also facilitate the forging of bilateral ties. This is significant given that Prime Minister Narendra Modi’s government pulled out of a multilateral Asia trade pact in 2019, according to a report by Bloomberg.
Broaching the subject of the trade deal, the British High Commissioner to India, Alex Ellis took to his official Twitter account to talk about it. He said that Britain wants a deal that removes any such barriers that might hinder business with India. He went on to add that this move will also create jobs and drive economic recovery.
The tweet read, “What would you like to see in a United Kingdom – India trade deal? The UK wants a deal that removes barriers to doing business with India – creating jobs & driving economic recovery.” He then added to the tweet saying that UK businesses could share their inputs on the government website. To his tweet, Indian Journalist, Barkha Dutt replied, calling it ‘A friendlier visa regime’.
An interim agreement is likely to be finalised by the end of the year. This would give medical devices and agricultural products access to the Indian market according to sources at Bloomberg, who were unnamed. The finalization would bring about more job opportunities for Indian seafarers and nurses in the UK said the report.
These talks have been underway for quite some time as India faces pressure from exporters. So far out of all the negotiations with global trade partners, only the UK has shown an interest. The British government will do a 14-week consultation on the potential trade deal with India according to a statement by the Department of International Trade. The goal of this deal is to double the trade between the two countries by 2030, which is an increase from the $33 billion in 2019.
As much as the UK government wants to showcase its independence and growth after the EU divorce, so does the Indian government. India started pushing more focus on the free trade agreements (FTAs) with other countries after its exit from the China-led Regional Comprehensive Economic Partnership (RCEP) deal. Since then, the Modi-led government has been doubling down on its efforts to revive bilateral trade relations with countries like the US, Australia and the EU, in an attempt to offset the repercussions and losses of exiting the RCEP deal.
Having said that, India was also in talks with the US and European Union for FTAs. There is a possibility that early harvest deals would be explored before either country jumps straight into a full-fledged FTA. When the UK was still a member of the EU, it was one of India’s major trading partners, but since Brexit, the dynamics have changed between India and the EU.
The initial deal would be the first step as it would form the basis for a broader FTA. The move would also help slash tariffs on a range of items, facilitate better investments and give both nations better access to markets as well as goods and services from the respective countries.
