Trade between India and the UK is already worth more than $27 billion a year, and Indians are the largest ethnic minority in the country. Earlier this year the two nations also inked a pact to accelerate work visas for Indians, enabling 3000 professionals a year to emigrate to Britain. But the much awaited India-UK trade deal hit a roadblock over immigration, when former British Home Secretary Suella Braverman called Indians as the biggest group of overstayers in the UK.
Braverman spoiled the party
After her comments left Indian counterparts shocked and made sure that the deal missed its Diwali deadline, Braverman resigned from the cabinet of British PM Liz Truss. But in another twist that came hours later, Truss herself resigned as PM just 45 days after taking over, because of dissent against her U-turn on tax cuts. With the chaos and uncertainty in Downing Street, India has chosen to patiently watch political developments before moving forward with the deal.
India adopts a patient approach
India’s Commerce Minister Piyush Goyal said at a CII summit, that India’s strategy will depend on how quickly the leadership changes, and the mindset of the new British PM. But he also expressed hope that the deal will move ahead irrespective of who replaces Truss, since businesses and the administration in the UK are eager to sign the FTA. Goyal is hence confident that free trade deals with the UK, Canada and EU are still on track.
What are FTAs?
Free Trade Agreements (FTAs) are signed between countries to remove or reduce customs duries and non-tariff barriers that affect flow of goods. Apart from import and export of goods and services, intellectual property as well as competition policy can also come under FTAs. Recently India’s FTA with the UAE has come into effect, giving Indian exports duty-free access into the Emirates. That is just one of the free trade deals that India has signed with 54 countries.
Who gets what from India-UK deal?
As for the UK-India FTA, it covers research and innovation when it comes to industrial collaboration, inspired by the success of the Astrazeneca-Serum partnership on Covishield. The UK government seeks to cut down levies by up to 150 per cent, opening doors for a free flow of products such as scotch whisky and cars. The deal is more important for UK at the moment, since it is looking for ways to reduce dependence on EU after Brexit.
