‘Best time to negotiate India-UK FTA’

Our Bureau New Delhi | Updated on July 30, 2021

Both countries are favourably disposed and eager to work together: Officials

It is the best time to negotiate an India-UK Free Trade Agreement (FTA) because governments in both countries are favourably disposed and eager to work with each other, according to officials.

“India and the UK have announced their chief negotiators and internal consultations have started on the proposed FTA... In the political context, it is the best time for the negotiations because both Prime Ministers have a good personal rapport,” said E Vishnu Vardhan Reddy, Director (Europe West), MEA, at a discussion of the proposed India-UK FTA organised by the Trade Promotion Council of India on Friday.

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Both sides could gain from an FTA as untapped potential is huge, be it in goods and services, fintech, health tech, innovations, or other new emerging areas, he said.

‘Opportunity cost’

“As we look into nitty gritties and sectoral issues and concerns from both sides in trade, we should not overlook the opportunity cost of not having a pact,” Reddy said, pointing out that India is already missing out on big regional trade deals such as the Regional Comprehensive Economic Partnership (RCEP) agreement led by the ASEAN.

‘A good example’

Ishtiyaque Ahmed, Adviser (Industry), NITI Aayog, Vietnam also has an FTA with the EU which allows it to gain duty free access on 99 per cent of its products including textiles, where India once had an advantage.

Not only will an FTA with the UK help India in diversifying its market for goods, it will also help in two way flow of investments and solidify the country’s position in the global value chain, Ahmed said. The UK is interested as it seeks to consolidate its relationship with major trade partners after stepping out of the EU.

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At the India-UK Summit earlier this year, Prime Minister Narendra Modi and his British counterpart Boris Johnson, acknowledged that the two-way trade between India-UK in 2019-20 at $15.4 billion was not adequate and doubling trade in about a decade was feasible.

The UK is keen on reduction of import duties on cars in India, which ranges between 60 per cent and 100 per cent. It also wants reduced duties for wines and spirits including whisky. More access in services such as legal and financial including banking and insurance is also on the country’s wish list.

India, on the other hand, wants more visas for students and professionals and lower duties on items such as textiles, garments and leather.

Published on July 30, 2021

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