Raising expectations over an early conclusion of the much protracted India-UK free trade agreement, Minister for Commerce and Industry Piyush Goyal and UK Secretary of State for International Trade Kemi Badenoch expressed satisfaction on the state of negotiations in the ongoing 6th round of talks — for a deal — presently underway in New Delhi. “The Ministers urged the negotiating team to work together with an aim to iron out the differences in the spirit of mutual accommodation based on the principle of reciprocity and respect for each other’s sensitivities, for a balanced, mutually beneficial, fair and equitable outcome,” as per a Commerce Ministry statement on Tuesday.
This is the first face-face meeting between Goyal and Badenoch who took over as the UK’s Trade Secretary in September 2022 in the Liz Truss Cabinet and has retained her position under the Premiership of Rishi Sunak, bestowing a sense of continuity on the favourable approach of the British leadership towards an FTA with India which was also articulated by Sunak during his meeting with Prime Minister Narendra Modi at the G-20 summit in October this year. In an official statement on her visit to India, Badenoch had stated her intent to drive progress on an ambitious bilateral trade deal between the two nations.
The discussions also featured a wide range of bilateral trade and economic relations as the two nations look at unlocking the full potential of boosting jobs, investments and exports between the two countries through the FTA. As Goyal pointed out, India and UK investment and economic relations are already strong and have grown over the years with India adopting an export-led strategy to spin its growth story which is inclusive and sustainable
The sixth round of talks also come opportunely with India replacing the UK as the 5th largest economy in the world and taking over the G-20 presidency, a grouping which has UK as a key member. As Saket Dalmia, president of PHDCCI points out, India has signed 13 FTAs and 6 Preferential Trade Agreements (PTAs) with various countries of which only 3 FTAs are with the G 20 nations including Australia, Japan and Republic of Korea. Going ahead, signing FTAs with other potential markets such as the UK would enhance India’s expansion of exports with G20, according to Dalmia.
Strong growth in the Indian economy is expected to boost UK exports to India by over £9 billion by the middle of the next decade, and UK businesses are already taking advantage of the flourishing trading relationship as India unleashes a spate of policies and reforms including PLI scheme, National Infrastructure Pipeline, Development Finance Institution and privatization of non-strategic sectors PSU to attract investments.
The talks – the first formal round since July – will see India driving its top priority of securing more study and work visas as well as expanding the trading relationship. If the FTA goes through as per the terms, the Indian companies would be able to export to the UK at reduced tariffs. The negotiations are expected to target a deal to cut tariffs and open opportunities for UK services such as financial and legal. According to an international trade expert aware of the developments, the UK side is looking at reduction in tariffs in food and drink and healthcare, a greater alignment of standards and simplified customs procedures and alignment of data protection rules and IP practices. India’s interests lie in realising the full potential of the India-UK partnership, particularly in innovation and R&D-intensive sectors. However, the negotiations may go beyond the March 2023 target, say industry sources.
During her visit, the Trade Secretary will also meet with business leaders to better understand their needs for a modern UK – India trade relationship. This will include a meeting with envoPAP, a UK company investing over £10 million in India to construct a plant producing Fair trade paper and packaging products. British coffee and sandwich retailer Pret will open its first branch in India early in 2023.