There are good economic and strategic reasons for the FTA which will create many opportunities for both the countries.
In May last year, Prime Minister Narendra Modi and Boris Johnson announced their shared vision for a transformative decade for the India-United Kingdom partnership. Their meeting in the midst of the second wave of COVID-19 in India reflects their determination to put their shared political will into action. As part of that change, the two leaders announced their ambition to more than double bilateral trade by 2030, which totaled more than £23 billion in 2019. He directed his governments to take swift steps to reduce barriers to trade and to lay the necessary groundwork. To start work on a Free Trade Agreement (FTA) by the end of 2021.
a beginning
These words have now been made real. Both governments have already taken action; For example, opening up the export of British apples to India and enabling large numbers of Indian fisheries to export shrimp to the UK are small but meaningful steps by which both countries have demonstrated that they are taking concrete measures to stimulate growth. can and do.
The next big step was the start of the FTA talks last month. On January 13, 2022 in New Delhi, India’s Commerce Minister Piyush Goyal and UK International Trade Secretary Anne-Marie Trevelyan announced their shared ambition to conclude talks on a comprehensive and balanced FTA by the end of 2022. It’s a big job; All trade negotiations are complex, and especially between two partners of such different sizes and at such different stages of their development. However, the opportunities that FTAs provide are huge for both the countries.
business in both countries
Before looking to the future, it is necessary to take stock of the present. There are around 600 UK companies in India that employ over 320,000 people. These include: Barclays which has its largest office in Pune outside London, while JCB’s products manufactured in India are exported to more than 110 countries worldwide, as does consumer goods giant Hindustan Unilever headquartered in Mumbai. Is; Just two of the many examples of British companies endorsing Prime Minister Modi’s vision for an self-reliant India.
Similarly, India is already a big investor in the UK – particularly in dynamic sectors such as fintech, electric vehicles and batteries. In 2020-21, India was the UK’s second largest source of investment in terms of number of projects. Just last week, Essar Group and Ola Electric both announced investments in the UK, but given the size of our two economies – fifth and sixth in the world – our trade ties in particular have fared poorly. An FTA would change that.
Britain thrives on free trade. After 47 years (in 2020) leaving the EU Common Trade Bloc, we are building a network of like-minded democracies committed to free trade. The Indian government is showing its determination to agree to a new set of trade deals; And it is not a coincidence that both governments are in talks with similar countries, for example, Australia. India has an extraordinary opportunity to transform its economy and society over the next 30 years, as it is at the heart of the Indo-Pacific region, where half of the world’s people live and produces 50% of global economic growth, from its demographically sweetened The location has been reached. Free trade with the UK will help through greater access to a highly open and competitive market, providing valuable opportunities for India’s emerging companies – for example by giving Bengaluru start-ups direct access to London’s capital markets.
good prospects
The UK-India trade agreement will boost growth and employment in both countries. A UK government analysis shows that, depending on the depth of the deal, an FTA would add around £14.8 billion to India and the UK’s GDP by 2035. A trade deal helps diversify supply chains by making it easier and cheaper for more businesses. To trade across the border. Fewer constraints coupled with greater regulatory certainty will encourage new small and medium-sized enterprises to export their goods and services. An agreement also means that Indian and British consumers see an improvement in the variety and affordability of products.
There are good economic reasons to agree to an FTA. There are good strategic reasons as well. The British Government’s Integrated Review of Our Foreign Policy, which I worked on before I came to India, describes the world we are in; Mess with more geo-strategic competition. This is one in which two dynamic democracies like India and the UK need to work together to promote open economies.
from past to future
Finally, an FTA would mark a new way of working between the UK and India. It gives a new framework within which the two countries can develop and flourish together, putting colonial economic ties in the history books. We must acknowledge that past, especially in this 75th year of India’s independence, and forge a future that is about opportunities for both countries.
This month is also marking one year of presenting his identity card to the President of India, Ram Nath Kovind. I am honored to be here at this pivotal moment – when the UK and India will shape the next 25 years of our destiny as equal, forward-looking partners.
Alex Ellis is the British High Commissioner to India
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