With the UK set to exit the European Union in less than a year, the British government is exploring ways to intensify trade and investment ties with India on a bilateral basis. UK Minister for Investment Graham Stuart, who was recently in India to look for partnerships in the area of clean transport technology, believes that Brexit could augur well for trade ties between the two countries as a free trade pact would be easier to ink without the sensitivities of other EU members weighing it down. In an interview with BusinessLine , Stuart spoke on a wide range of issues including growing bilateral trade ties, scope of cooperation in the clean-tech area and the possibility of easing of post-study work visa rules. Excerpts:

Following the UK’s scheduled exit from the EU next year, how do you see the country’s trade ties with India?

The big picture is that there is a growing trading relationship between the UK and India. There is close political working as well. As we leave the EU we do so as the number one foreign direct investment (FDI) destination in Europe, the number one destination for Indian companies who invest in Europe and the largest European destination to invest in India since 2010.

We are mutually investing in each other’s economy and we have common goals such as sustainable transport and development of our technology industries. I hope that our friendship and economic ties will only grow from strength to strength.

India and the EU have made no headway in their FTA talks which began more than a decade ago. Do you see things changing after Brexit?

We had strongly supported a suitable FTA between India and the EU. It had its challenges and we haven’t completed it yet. I think when the UK is no longer a member of the EU there would be ways in which it is easier for the two sides to reach an agreement.

There is opportunity for us going forward to negotiate on a bilateral basis arrangements that are mutually beneficial. And when the other states are not part of it, there are many interests that you don’t have to protect. There were a number of things that were causing friction and challenges in the India-EU context that will not exist in the India-UK context.

How soon can the negotiations on a India-UK FTA start?

One of our challenges right now is bandwidth. We are rolling over all our existing agreements with our partners around the world. We are negotiating with the EU. We are involved in trade dialogue and other working groups of all sorts and technology partnerships. For the last 40 years we had no one working on trade policies. That was all carried out by the EU. All that I can do is plead for patience from our key and tremendously important partners such as India.

There is an increased demand from UK universities for re-introduction of post-study work visas which may have impacted the number of students coming from countries like India. Do you see that happening?

The universities minister in the UK, a few days back, gave a speech suggesting that we would like to see greater openness. One is pleased to say that last year there was a 32 per cent increase in the number of Indian students coming to the UK. So I think we are on a healthy path. What we are already seeing is a greater improvement in the behaviour of students, in terms of observing the rules and returning when they are supposed to.

Well I am not the one responsible for deciding on that policy (of re-introducing post-study work visas), as that would be within the realms of the Home Office. But a pre condition for a more generous system is that we have clear observance of the rules and its fulfilment. So I think we are in a good position going forward and hope that we will be able to make progress.

You are in India to talk about cooperation in the field of clean transport at India’s global mobility summit `Move’. What kind of partnership possibilities exist in this area?

We are a global leader in autonomous and electric vehicles. In fact, one in five electric vehicles sold in Europe is built in the UK. All vehicles sold in the UK have to be zero emissions by 2040. There is quite a correlation between Indian and UK ambition in the area. Both have got university bases, automotive company bases and engineering bases and we believe that collaboration is the key tackling the challenging issues.

Indian PM Narendra Modi and UK PM Theresa May signed a pact in April for tech partnership. This is another step in the road for that. Indian tech companies have massively invested in the UK and so it is a very significant relationship. I will be meeting Indian investors in UK and talk further about how we can cooperate and collaborate to meet the joint challenges. There are huge R&D capabilities in India that UK companies can tap into and vice-versa.

Could India’s insistence on re-negotiating Bilateral Investment Treaties with all its trading partners, based on a more stringent model BIT designed to prevent disputes between investors and the government, be a deterrent to investments flowing in from the UK?

Well, potentially. But, we think that by close cooperation (it could be sorted out). There is a UK-India Joint Economic Trade Committee (JETCO) meeting coming up later this year and Liam Fox, UK’s Secretary for trade, will be attending it. We got a trade dialogue going on. The Commonwealth summit earlier this year reinforced efforts from both sides to work together. A tripartite approach, including cooperation between governments, regulators and businesses could work to sort out issues. When you bring the three together, then you can have a common vision of where you want to get to and then you can move along that path more quickly. I can see willingness from Indian side to learn from international experience and part of the reason for my visit is to show UK’s intent to be a positive partner.

Related Topics
comment COMMENT NOW