“Between 2019 and 2050, more than half of global growth is expected to come from the Indo-Pacific. Within that, South Asia will grow particularly quickly. And India is projected to be the world's third largest economy by 2050,” the minister said.
Formal negotiations for an India-UK free trade agreement (FTA) are set to begin imminently and will be as comprehensive as possible to cover all aspects of the bilateral relationship, the president of the Confederation of British Industry (CBI) said on Wednesday.
India-born Lord Karan Bilimoria was addressing the CBI’s annual conference with a focus on the UK as a “great trading nation”, keen to increase post-Brexit trade with the European Union (EU) and beyond. He highlighted the “enormous potential” of the UK-India partnership, from easing the movement of people to slashing duties and tariffs on some of Britain’s major exports.
“For nearly four decades, all our trade deals were negotiated by the European Union. And, over the last five years, the UK’s Department for International Trade did an incredible job; it signed trade agreements with 66 non-EU countries and one with the EU. A remarkable achievement, which many thought would be impossible,” said Bilimoria, the founder of Cobra Beer.
“On top of this, the CBI, I am proud to say, has played a major role with helping with new trade agreements, such as with the UK- Australia FTA. This was followed by our FTA with New Zealand, and an enhanced trade partnership with India – with a target to double bilateral trade by 2030. Formal negotiations with India-UK FTA are starting imminently,” he said.
Speaking ahead of his speech, the London-based entrepreneur and founding chair of the UK India Business Council (UKIBC) highlighted the areas of focus for the FTA, which the CBI – as the industry representative body for over 190,000 UK businesses – will be involved with.
“We are just scratching the surface with a country like India. India is the fifth largest economy in the world, emerging global economic superpower, we should be doing way more than GBP 24 billion bilateral trade,” he said.
“That FTA I hope will be a huge benefit in enhancing bilateral trade and very comprehensive… as comprehensive as possible. Movement of people; reduction of duties and tariffs – the tariff on Scotch whisky is 150 per cent, that’s got to be reduced drastically; academic collaborations and cross-border research is going to be huge between our countries; partnering on a Green industrial revolution. There is a vast array to really ramp up business and trade between our two countries,” he added.
Bilimoria also pointed to the significant discrepancy in visitor visa fees paid by Indians, in comparison with Chinese visitors who pay far less, as an example of some immediate steps to be taken to ease the movement of people between the two countries.
His speech comes as the UK International Trade Secretary, Anne-Marie Trevelyan, told the Centre for Policy Studies think tank earlier this week that she is all set to launch FTA talks.
“Between 2019 and 2050, more than half of global growth is expected to come from the Indo-Pacific. Within that, South Asia will grow particularly quickly. And India is projected to be the world’s third largest economy by 2050,” the minister said.
“India is, of course, one of our most significant export markets, and I look forward to launching our trade talks soon with them,” she said.
In May, India and the UK clinched an Enhanced Trade Partnership during a virtual summit between Prime Minister Narendra Modi and his UK counterpart, Boris Johnson, with the goal to double bilateral trade to GBP 50 billion by 2030.
According to the Department for International Trade (DIT), preparations for the launch of negotiations for the UK-India FTA “remain underway” since the conclusion of bilateral working groups in October. Trevelyan and Indian Commerce and Industry Minister Piyush Goyal also held talks last month during the G20 trade ministers meeting in Sorrento, Italy, to discuss “final preparations” for the launch of UK-India FTA negotiations.
While no date for the launch of negotiations has yet been finalised, Downing Street indicated that they are set to kick off before the end of this year.
The UK has said it wants a deal that slashes barriers to doing business and trading with India. There had been talk of a so-called early harvest or interim trade deal ahead of a full-fledged FTA, but indications are that both sides might aim directly for an FTA by next year.