Economy

‘Reducing import tariffs on inputs under India-UK FTA can help attract more UK investments’

Amiti Sen | | Updated on: Jan 26, 2022
Kevin McCole, Managing Director of UK India Business Council (UKIBC)

Kevin McCole, Managing Director of UK India Business Council (UKIBC)

Mutual recognition agreements can facilitate movement of professionals, says UKIBC MD Kevin McCole

Slashing of import duties on inputs such as auto parts and bulk alcohol by India, under its proposed Free Trade Agreement with the UK, can help it attract more investments from British companies which have alternative destinations to chose from such as Vietnam and Thailand, according to Kevin McCole, Managing Director, UK India Business Council.

 “UK companies are already major investors in India but there is an appetite to invest much more. Investment decisions are a major call taken by a board and companies are looking at many options such as Thailand, Vietnam or China...Tariff reduction on inputs as part of the FTA can facilitate those investments into India,” McCole said in an interview to BusinessLine. There are more than 500 UK companies operating in India employing over 4 lakh people directly.

Boosting bilateral trade

Commerce & Industry Minister Piyush Goyal and UK International Trade Secretary Anne-Marie Trevelyan, formally launched the negotiations for an India-UK FTA earlier this month following which the first round of talks took place. The free trade pact seeks to double bilateral trade in goods and services from existing $50 billion annually to $100 billion by 2030.

Lowering of import duties on inputs would not only bring down costs of doing business in India and increase its attractiveness, it will also help India export more, McCole said. For instance, Scotch whisky, which attracts import duty of 150 per cent, is imported into India mostly in the bulk form which is then bottled or blended in the country. “What is under appreciated is the fact that the imported Scotch is also exported from India (after blending). A decrease in import tariffs will also bring down costs for Indian exporters and make their products more competitive,” McCole explained.

While both sides want reduction in import duties on goods, the UK industry also wants a greater alignment of standards and reduction in non-tariff barriers such as ease in movement of goods through ports and an alignment of data protection. “We made the recommendation on data protection as it is of primary interest to our industry. Transfer of data should be straight and simple,” McCole said, adding that the UKIBC would make further submissions in the area. India is in the process of firming up its own data protection rules and is likely to move cautiously in the area.

India’s stress on visa liberalisation for its professionals and workers is unlikely to be a deal breaker as the UK, on its own, has extended several relaxations for all countries over the last few months, McCole said. Increased opportunities for professionals and workers in both countries would emerge from the mutual recognition agreements (MRAs) that are likely to be worked out for various professions, he added.

Under MRAs, partner countries agree to recognise each other’s certifications and degrees. For instance, if there is an MRA for Chartered Accountants, then one who has earned the qualification in India can work in the UK and vice versa.

Published on January 26, 2022
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