India and the UK are considering the possibility of a free trade agreement, commerce and industry minister Nirmala Sitharaman here on Friday after a late evening meeting with UK's business minister Sajid Javid, as both the countries start to re-calibrate positions following Britain’s decision to exit the EU.
India and the UK are considering the possibility of a free trade agreement, commerce and industry minister Nirmala Sitharaman here on Friday after a late evening meeting with UK’s business minister Sajid Javid, as both the countries start to re-calibrate positions following Britain’s decision to exit the EU.
“Once the process of informal discussion starts, then we will get into discussions in detail. They (discussions) will all fall into a formal framework….whether it will be a preferential or a free trade arrangement, that will be a mutually-discussed matter,” Sitharaman said. Following Brexit, the FTA talks with the EU are going to be re-calibrated, Sitharaman said.
FE was the first to report on Tuesday that India was open to a trade pact with the UK and the country is also considering re-calibrating its strategy, including re-negotiating tweaking its tariff offers, for the proposed FTA with the EU in view of Brexit. However, with both the EU and the UK busy grappling with the Brexit, serious trade negotiations with India are unlikely to start anytime soon, sources had said earlier.
Describing his meeting with Sitharaman “very positive and constructive”, visiting minister Javid said:”India and UK already have a very strong trade and investment relations and we are looking at how we can go further and look forward to working with her.” The UK has started exploring trade opportunities outside the EU following its decision to exit the bloc. Earlier in the day, Javid met senior Tata Group officials amid media reports that Tata Steel may “pause” its plans to sell off most of the troubled UK units.
The UK accounts for over a half of India’s software services exports to the EU, 23% of its textile and garment exports, 23% of key engineering and electrical goods exports and 16% of jewellery, precious metal and stones exports. So senior industry executives from these sectors have endorsed an FTA or PTA with the UK. Britain alone accounted for 3.4% of India’s goods exports in 2015-16, while the EU–including the UK–made up for 17%.
The UK was also the third-largest investor in India between April 2000 and March 2016, with foreign direct investments of $23.1 billion. Indian companies, especially the Tata Group, have invested massively in the UK as well.