Keeping in view the predominance of Britain’s India ‘Pacific Foreign policy Tilt’ to enhance and cement the relationships with India, one of the region’s fastest growing economies, both nations currently having an trade of around 29 billion pound(35.3 billion US Dollars) are poised to take Free Trade Agreement (FTA) negotiations to the logical end which will benefit on reciprocal basis.
Amidst the reports of stalling of the FTA talks over the recent attacks by Pro Khalistan groups on Indian embassy London which led to summoning of senior most British official in Delhi i.e. deputy high commissioner, Christine Scott by India to lodge a strong protest, both countries have decided to adopt a flexible diplomatic approach to move ahead and start negotiations from April 24 to 28 in London. The policy of both nations veers around the commitment to conclude the remaining 13 policy chapters out of total 26 to achieve the target of giving a final shape to FTA by the end of 2023.
What is at stake for India and Britain?
The Russian invasion of Ukraine has dealt a body blow to major economies in western sphere including Britain which emanated from their stand on Moscow’s activities and imposition of sanctions .In this backdrop, FTA dialogue between India and Britain becomes immensely relevant and of utmost importance to neutralize the impact of the war which sans the optimism of any solution in near future. The 9th round of FTA talks between India and the United Kingdom will resume on Monday thereby negating the reports of suspension of such negotiations which have been highlighted in British media.
Expectations of India and Britain from FTA Negotiations
According to experts, India wants to enhance its exports of pharmaceuticals, textiles, food and beverages, tobacco, leather and footwear and agricultural items including rice to the UK. Digital services and ICT sectors will also benefit and drive the expansion of bilateral trade under the FTA.
On the same analogy, Britain is keen to gain Indian market access for chemicals, some fruits and vegetables, motor vehicles and parts, transport equipment, electrical equipment, medical devices, wines, Scotch, and spirits which could impact local industry players besides giving a big boost to the manufacturing ecosystem.
British stakeholders are hopeful that FTA will yield positive results like clearance of regulatory barriers to facilitate trade through digital services and digitally enabled services. Experts feel that other sticky issues including investors’ protections for British businesses will be resolved as they prefer early arbitration in case of disputes rather than get stuck in Indian courts. The UK has also stressed the demands for duty concessions on Scotch whisky and automobiles which are still hitting a wall with India.
Indian PM Modi and UK PM Sunak recently agreed to expedite FTA negotiations
United Kingdom, PM, Rishi Sunak recently spoke to PM Modi to express his resolve to give fillip to ongoing FTA talks to thrash out outstanding issues which will help in bringing clarity to conclude the deal in near future. Sunak’s call came against the backdrop of media reports that India had halted FTA negotiations till UK takes tougher action against pro-Khalistan groups behind the attack on the Indian high commission in London. Sunak reiterated his condemnation of the “unacceptable” violence outside the Indian High Commission in London last month and updated Modi on the steps being taken to ensure the security of Indian diplomatic staff which was appreciated by Modi.
Deal will cut tariffs an open opportunities
Economic experts opine that the deal will serve two purposes for UK Services and cut the tariffs which will make it easier for British businessmen to sell their products to India which is in the making of the world's third-largest economy by 2050. As per officials’ data, discussions have been closed for 13 out of 26 policy chapters of agreement by Indian and top-ranking officials which pertained to goods, services, investments and intellectual property rights. India was the 12th largest export market for Britain in four quarters at the end of Q2022 and accounts for 1,7 % of total UK exports.
Progress made by both nations in FTA so far
According to experts, on its part, India wants to increase exports of textiles, food and beverages, pharmaceuticals, tobacco, leather and footwear, and agricultural items like rice – to the UK. Digital services and ICT sectors will also benefit and drive the expansion of bilateral trade under the FTA.
A Bilateral trading between UK and India will get a boost after FTA execution
According to official statistics of the UK government, the bilateral trading was worth British Pound Sterling (GBP)34 billion in 2022 which grew to GBP 10 billion in one year. The confederation of British industry (CBI), a country’s leading industry body, has revealed that INDIA-UK FTA could boost Britain’s trade with India by GBP 28 billion per year by 2035 besides enhancement of the wages across UK by GBP 3 billion which will positively impact overall economic impetus.
Analysts opine that determination and compulsion of India and UK to take FTA to the logical end will ensure the success of FTA negotiations which will warrant flexible, rational and reasonable approach on the part of both nations to herald a new era in the field of trade to strengthen their respective economies to move ahead.
(Writer is political analyst and senior journalist based in Shimla)