UK launches public consultation process to prepare for trade talks with India
The British government wasted little time preparing for trade negotiations with India. It launched a 14-week public consultation process to gather views from businesses and key stakeholders. Formal trade negotiations are expected to start in the fall.
The UK is seeking a Free Trade Agreement (FTA) with India to harness its $ 2.6 trillion economy and a market of 1.4 billion consumers. As part of the FTA, he wants the removal of direct and indirect barriers to business and trade with India, including the reduction of tariffs on whiskey (up to 150%) and manufacturing automobiles. British (up to 125%).
UK International Trade Secretary Liz Truss said: ‘We want an agreement that pushes new frontiers in industries of the future and helps us build a greener, more innovative and more service-oriented economy that will create jobs. better paid across the country.
UK Minister for International Trade Ranil Jayawardena said: “India is one of the fastest growing economies in the world and we share a lot in common, so we are natural partners… A trade deal remove barriers, which will allow UK businesses to sell their wares in India – and get more investment, better jobs, higher wages, more choice and lower prices here with us.
Beginning of the public consultation process
The 14-week public consultation process (you can download the trade consultation document here), announced on May 25, seeks to expand the network as much as possible with the inputs sought by consumers and businesses in various sectors.
Their views, concerns and market access considerations will enable the UK to strike a lasting deal facilitating closer cooperation in high-tech industries, such as science, technology and services, as well as that the creation of jobs with high added value in the country.
The bottom line, however, is that the UK wants easier access to its goods and services for India’s large middle-income population and digital consumers, ie reduction of tariffs and indirect barriers.
In addition, the UK government wants its service companies to be able to operate in the Indian market, a demand that will not be easily met if India does not enjoy reciprocal benefits.
(We cover specific areas of note for UK exporters and industries looking at the Indian market here: How UK businesses can take advantage of the UK-India Enhanced Business Partnership Agreement in 2021)
UK-India Trade Agreement Timeline
Before formal trade negotiations begin, the two countries must complete a pre-negotiation scoping phase, which involves a period of engagement with businesses and the public.
The public consultation process ends on August 31 and includes a questionnaire that will collect information from participants about their experiences and priorities when doing business with India. Formal trade negotiations are expected to begin later this year, around the fall.
This follows the Enhanced Trade Partnership (ETP), first mentioned in February and agreed three months later in a virtual meeting between Prime Minister Boris Johnson and Prime Minister Narendra Modi on May 4, where they launched a “2030 roadmap”. The road map provides a framework for fostering trade relations between the UK and India.
Last July, at the 14th meeting of the United Kingdom-India Joint Economic and Trade Committee (JETCO), stakeholders agreed to prioritize five key areas, namely life sciences, technology information and communication (ICT), food and drink, chemicals and services to combat non – tariff barriers to trade. In terms of a planned timetable, countries first had to work out an improved trade agreement, followed by comprehensive negotiations for a free trade agreement.
State of trade between UK and India, investment
India is the UK’s sixth non-EU trading partner after the US, China, Japan, Switzerland and Norway. Bilateral trade in goods and services in 2019 was around US $ 15.7 billion and US $ 18.9 billion, respectively, and is gaining in economic importance. Although India enjoys a trade surplus with the United Kingdom, the latter’s exports to India are growing steadily. The fastest expansion has been in services. Thanks to the trade deal, India and the UK plan to double their trade by 2030. If the deal goes through, it will be India’s first major free trade deal since 2011, date he signed an FTA with Malaysia. A minor FTA was also concluded with Mauritius in February this year.
Britain’s business opportunities in India will improve as the latter continues to liberalize its foreign direct investment (FDI) policy.
Both countries have made significant investments in their respective economies, although there is room for further growth. Data released by the UK Department for International Trade in 2019 indicated India was the UK’s second-largest investor, having invested in 120 projects and created nearly 5,429 jobs.
Meanwhile, the UK is the second fastest growing G20 investor in India over the past 10 years.
FDI flows from the UK to India increased from US $ 898 million in 2015-2016 to US $ 1.42 billion in 2019-2020, according to consultancy firm Grant Thornton. Broken down, 572 UK companies in India, with combined revenue of INR 3.39 trillion ($ 46.73 billion), directly employed 416,121 people.
Dezan Shira & Associates is a UK consultancy firm advising foreign investors on entering the Asian market. Founded in 1992, the firm employs several hundred professionals and has offices in New Delhi, Mumbai and Bangalore. Please contact the firm at [email protected] help. Our guide “Doing Business in India 2021” can be downloaded for free. here.
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