London: The UK government on Thursday announced the launch of free trade agreement (FTA) negotiations with India, describing it as a “golden opportunity” to put British businesses at the “front of the queue” of the Indian economy.
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.
The first round of negotiations is expected to start next week, which the British government said would make it the UK’s quickest start of formal talks between negotiating teams following a launch.
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 GBP 28 billion a year by 2035 and increase wages by up to GBP 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 GBP 2 trillion economy and market of 1.4 billion consumers, including cutting tariffs on exports of British-made cars and Scotch whisky.
DIT analysis claims a trade agreement with India would benefit all parts of the United Kingdom, given that already around 30,000 people in the West Midlands were employed via Indian investment in 2019. The northern region of England could see a massive boost of up to GBP 300 million with opportunities for manufacturers of motor vehicles and parts.
The Indian government’s plans to install 175 GW of renewable energy capacity by 2022 are also seen as a major opportunity for the UK’s renewables industry, which hopes to benefit from a deal that slashes barriers such as import tariffs as high as 15 per cent on wind turbine parts.
The UK is pitching the India FTA as a major move since its exit from the European Union (EU), in support of free and fair trade in the Indo-Pacific. The launch of similar negotiations with Canada, Mexico and the Gulf are in the pipeline, besides membership of the GBP 8.4 trillion Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade bloc.