The first round of UK-India free trade agreement (FTA) negotiations will start next week, which the British government said would make this the UK’s quickest start of formal talks between negotiating teams following a formal launch this week.
British Prime Minister Boris Johnson said an FTA would take the country’s historic partnership with India to the next level and highlighted Scotch whisky, financial services and cutting-edge renewable technology among some of the key sectors set to benefit.
Johnson said: “A trade deal with India’s booming economy offers huge benefits for British businesses, workers and consumers. As we take our historic partnership with India to the next level, the UK’s independent trade policy is creating jobs, increasing wages and driving innovation across the country.
“The UK has world-class businesses and expertise we can rightly be proud of, from Scotch whisky distillers to financial services and cutting-edge renewable technology. We are seizing the opportunities offered in growing economies of the Indo-Pacific to cement our place on the global stage and deliver jobs and growth at home.”
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UK Secretary of State for International Trade, Anne-Marie Trevelyan, who was in New Delhi on a two-day visit to official launch the negotiations, also met up with Commerce and Industry Minister Piyush Goyal in New Delhi for the 15th UK-India Joint Economic and Trade Committee (JETCO) to review progress within the UK-India Enhanced Trade Partnership agreed last May by Indian Prime Minister Narendra Modi and Boris Johnson.
She said: “A deal with India is a golden opportunity to put UK businesses at the front of the queue as the Indian economy continues to grow rapidly. By 2050 India will be the world’s third largest economy with a middle class of almost 250 million shoppers. We want to unlock this huge new market for our great British producers and manufacturers across numerous industries from food and drink to services and automotive.
“As an independent, deal-making nation the UK is broadening our economic horizons and forging stronger partnerships with the fastest-growing economies of the world. India marks the start of our ambitious 5-star year of UK trade and will show how the deals we negotiate will boost the economies across all nations and help level up all regions of the UK.”
An India-UK FTA is billed in the UK as creating huge benefits for both countries, with the potential to boost bilateral trade by up to £28 billion a year by 2035 and increase wages by up to £3 billion across the UK. A deal with India is also pegged as a “big step forward” in the UK’s post-Brexit strategy to refocus trade on the Indo-Pacific, home to half of the world’s population and 50 per cent of global economic growth.
The Department for International Trade (DIT) has said the UK wants an agreement that slashes barriers to doing business and trading with India’s £2 trillion economy and market of 1.4 billion consumers, including cutting tariffs on exports of British-made cars and Scotch whisky.
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Lord Karan Bilimoria, President of the Confederation of British Industry (CBI), said: “The CBI is delighted to see FTA negotiations launch between the UK and India. With India, a rapidly advancing global economic superpower, this trade deal can unlock a new era of partnership and pave the way for significant trade and investment opportunities for UK and Indian businesses.
“To fully realise the growth possibilities, the UK must focus on the areas which will drive our future economic success, such as collaborative innovation and stronger regulatory alignment. Above all trade is a key instrument for economic growth and prosperity across all regions and nations.”
According to DIT estimates, removing duties alone would increase UK exports to India by up to £6.8 billion, with Scotch whisky and cars currently facing enormous duties of 150 per cent and 125 per cent respectively.