India and the UK are stepping up talks to remove non-tariff barriers and promote better market access as they work to assemble the South Asian nation’s first major free trade pact in a decade.
The two countries focused on a list of doable items that would help the UK showcase the benefits of leaving the European Union while allowing India to forge new bilateral ties after the Prime Minister’s government withdraws. Narendra Modi of a multilateral trade pact with Asia in 2019, according to people with knowledge of the subject in the capital, New Delhi.
They plan to finalize an interim deal by the end of the year that would allow UK medical devices and agricultural products such as apples, quinces and pears to access Indian markets, while expanding the scope of UK employment for Indian sailors and nurses, the people said, asking not to be identified as the issue is still under discussion.
Under pressure from exporters, India is in talks on early harvest deals with the UK, US and EU – some of its major trading partners – but so far only the Great Bretagne has expressed interest. And unlike many other India trade talks that have gone on for years without success, there is a good chance that a deal will be struck with the UK given the needs of both sides, the people said, noting that these negotiations have progressed much faster than others.
A spokesperson for the British High Commission in New Delhi did not immediately respond to an email and text. Calls and texts sent to the spokesperson for the Indian Ministry of Commerce went unanswered.
The original deal would be part of the larger free trade agreement that would reduce tariffs on a range of items, facilitate investment and provide access to services and goods with the aim of increasing bilateral trade. The UK and India want to double trade between their two countries by 2030, up from more than $ 15.4 billion in 2019-2020.
It would be India’s first major free trade agreement since 2011, when it signed a comprehensive deal with Malaysia, although a minor FTA was signed with Mauritius in February.
Turn inward
Despite defending free trade in global forums, the Modi government has turned in on itself in recent years, first announcing the review of all existing free trade agreements, fearing that they will fail. ‘result in more imports than exports, then increasing tariffs to support domestic industries. . Shortly after being elected to a second term with an overwhelming majority, the Modi government withdrew from the Regional Comprehensive Economic Partnership.
Since then, India has made efforts to revive bilateral trade relations with major export destinations such as the EU, US and Australia to make up for the expected loss, while trying to win over investors. looking for alternative destinations to China for their supply chains.
Earlier in May, Prime Minister Boris Johnson and Modi pledged a “quantum leap” in their relationship and launched a strengthened trade partnership to boost exports and solve market access problems.
The proposed deal, one of the high-priority deals Johnson hopes to secure – with Australia, New Zealand and the United States – is expected to resolve long-standing demands, including allowing UK law firms access to the Indian market and a security pact to ensure that qualified professionals in India do not have to pay certain taxes in the UK if paid nationally, the people said.
Yet contentious issues remain, including India’s high tariffs on alcohol and automobiles. UK wants tariffs removed, including 150% whiskey tax and 125% duty on imported cars, while India seeks ‘data safe nation’ status . Areas such as e-commerce, government procurement, financial and banking services still need to be phased out. discussed, people said.
Never miss a story! Stay connected and informed with Mint. Download our app now !!