The UK is also a major investor in India. New Delhi attracted foreign direct investment of $1.64 billion in 2021-22.
The UK is also a major investor in India. New Delhi attracted foreign direct investment of $1.64 billion in 2021-22.
Trade experts say Rishi Sunak’s appointment as the UK’s prime minister is likely to give much-needed momentum to the ongoing talks for a proposed free trade agreement between India and the UK.
Countries have already missed the Diwali deadline for the conclusion of talks due to political developments in Britain
According to experts, political stability in Britain will now help speed up negotiations for the agreement, which will boost bilateral trade and investment between the countries.
Mr Sunak, 42, on Monday won the race to lead the Conservative Party and is set to become Britain’s first prime minister of Indian origin.
“This is a very positive news for India. The development will certainly help in giving the much needed impetus to the talks,” said Khalid Khan, Vice President, Federation of Indian Export Organizations (FIEO).
However, Vishwajit Dhar, a professor at Jawaharlal Nehru University, said the new UK prime minister wants to focus on domestic issues first and settle the economy.
“Trade deals don’t happen when there is a crisis. They happen when the economy is performing well,” MR. Dhar said.
Another trade expert said the two sides should not be in a hurry to end talks.
“Let things stabilize in the UK, then the two countries should resume talks,” the expert said.
Last week, British Prime Minister Liz Truss resigned as leader of the Conservative Party, saying she could no longer fulfill the mandate she was elected in September.
Commerce Secretary Sunil Barthwal said on October 20 that negotiations for a proposed trade deal between India and the UK are progressing in the right direction and the two sides are expected to reach an agreement soon.
The countries are negotiating the agreement to boost bilateral trade and investment. Both were aiming to conclude the talks by Diwali (October 24), but the negotiators missed the deadline.
In January, the two countries formally began negotiations for a free trade agreement. In such agreements, two countries eliminate or significantly reduce customs duties on the maximum number of trades between them, in addition to easing norms to promote investment and services trade.
The UK is also a major investor in India. New Delhi attracted foreign direct investment of $1.64 billion in 2021-22. India’s main exports to the UK include ready-made garments and textiles, gems and jewellery, engineering goods, petroleum and petrochemical products, transport equipment and parts, spices, metal products, machinery and equipment, pharma and marine goods.
Major imports include precious and semi-precious stones, ores and metal scrap, engineering goods, professional equipment, non-ferrous metals, chemicals and machinery.
In the services sector, the UK is one of the largest markets in Europe for Indian IT services. Bilateral trade increased to $17.5 billion in 2021-22 as compared to $13.2 billion in 2020-21. India’s exports stood at $10.5 billion in 2021-22, while imports stood at $7 billion.