India is a priority country for the UK and formal steps to enter into a bilateral trade and investment agreement between the two nations can be taken after December 31 this year when the country's exit process from the EU is complete, said UK High Commissioner to India Dominic Asquith.

“India and the UK have been working on ways to improve trade for the last two years...We agreed to put in place building blocks that will in time aggregate into a trade agreement,” Asquith said at a press briefing on Thursday.

The UK will formally exit the EU on January 31, 2020, and enter into a 11-month transition period.

In this period, a UK-EU trade deal will be negotiated that will set the terms of exchange of goods and services and investments between the two when the transition ends, and will also form the basis of UK’s trade and investment pacts with other countries, including India.

“After December 31, the UK will be free to negotiate trade agreements with third countries,” he said, adding that formal measures with India on a trade and investment agreement could be taken then.

Broad-based trade pact

India had earlier been negotiating a broad-based trade and investment agreement (BTIA) with the UK as part of the EU. Although talks on India-EU BTIA started in 2007, it has been stuck in issues including market access for automobiles and alcohol and inclusion of labour and environment matters in the pact.

The UK is the top trading partner for India within the EU with total trade in 2018-19 at $ 9.3 billion.

When asked about UK Prime Minister Boris Johnson's plans to visit India, the High Commissioner said that he believed that the visit might happen this year.

“I will be very surprised if you don't see him (the British PM) in India this year,” he said, adding that Prime Minister Modi is also be welcome to visit UK.

On the work done so far on a possible trade and investment agreement, Asquith said that the two countries were working in areas such as market access and regulatory norms that were permissible while the UK was still a part of the EU.

Working groups

The High Commissioner, who will soon end his term in India, said that his country was eager to intensify bilateral investment relations especially in the area of financial services.

India and the UK decided to set up three new bilateral working groups to tackle barriers to trade in food and drink, healthcare and data services last July when Commerce and Industry Minister Piyush Goyal visited London to participate in the Joint Economic and Trade Committee (JETCO) meeting.

The three new business-led working groups are run by the UK India Business Council together with the Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry.