Businesses optimistic ahead of UK-India FTA negotiations
Tuesday 31st August 2021: UK India Business Council has today presented its pre-FTA submission to the UK’s Department for International Trade, marking the culmination of a 14-week business consultation that included 18 roundtable discussions. The submission makes a comprehensive series of recommendations, on behalf of business, to the UK Government in advance of UK-India FTA negotiations set to begin in late 2021.
The UKIBC’s submission captures inputs from around 200 companies – from SMEs to MNCs – from all parts of the UK, representing a wide range of sectors including digital and data, food and drink, life sciences and healthcare, insurance and financial services, higher education, defence and aerospace, and energy. In sharing their views and experiences, businesses have been optimistic about what an FTA could mean for trade and investment in the UK-India corridor.
Among the UKIBC’s recommendations are that the Governments’ FTA negotiations should focus on:
- reducing tariffs, including on alcoholic spirits and medical devices;
- reducing non-tariff barriers to goods trade, such as by aligning standards, simplifying burdensome and costly customs procedures, ensuring tax parity between UK and Indian businesses, and securing mutual recognition of qualifications in higher education and the professional services; and
- measures to enable the growth in the innovative, tech-rich, and digitally-driven future focussed industries, such as IP protection and alignment of data protection rules.
The UKIBC also recommend that the Governments seek to sign a series of interim or mini Agreements that will, over time, form a fully Comprehensive FTA. This approach of reaching an “early harvest agreement” would capitalise on the excellent momentum already created by the Governments, it would lock-in wins and deliver economic benefits on an ongoing basis, and it would build the trust, confidence and momentum that will be required to overcome more difficult issues.
UKIBC Chair Richard Heald said: “The announcement and signing of the Enhanced Trade Partnership between India and the UK in May of this year represented the culmination of much effort and engagement between the two Governments. The launch of the process into a Free Trade Agreement (FTA) between the two nations is moving on apace as evidenced by the end of the consultation period today. The UKIBC has been pleased to have worked with the DIT to facilitate inputs form multiple companies and stakeholders across the UK. In doing so all contributors have been encouraged by the mutual ambitions of both Governments. I have been particularly encouraged by Minister Piyush Goyal’s and Secretary of State Rt Hon Liz Truss’s emphasis on “future focussed industries” as being key to a sustainable new engagement. The signs are deeply encouraging for greater UK-India alignment which is truly future proof.
UK businesses are keener than ever to support India’s growth story and urge both Governments to continue to work to improving Ease of Doing Business in and between both our countries in parallel with the vital FTA negotiations.
The UKIBC looks forward to facilitating the continued support of our members, clients and networks to both Governments throughout the FTA process with the aim of strengthening trade and bringing more jobs and prosperity to both countries.”
UKIBC Managing Director Kevin McCole said: “Given how committed UK businesses are to India, it was no surprise to see so many contribute so much to the consultation. It’s really clear that companies want to do more business in and with India, and the recommendations we have made on their behalf will result in more jobs and more consumer choice at lower prices in India. This FTA will be a win-win. The recommendations are practical, covering tariffs, standards, and measures that will grow trade in the tech- and IP-rich services where the UK and India are already global leaders and where there is scope to do so much more.”
The UK-India relationship has been reinvigorated in recent months thanks in large part to a new Enhanced Trade Partnership announced by Prime Minister Boris Johnson and Prime Minister Narendra Modi on 4th May 2021. The ‘ETP’ includes the ambition to double trade by 2030 and it was at the virtual bilateral in May that both Governments committed to negotiate an FTA later this year.
The UKIBC has long advocated a UK-India FTA. We believe it is both the right ambition and is eminently achievable. Our countries traded GBP 24 billion worth of goods and services in 2019 and have since cooperated on numerous occasions during the COVID-19 crisis to support each other in times of need. Both the UK and Indian economies are anticipated to grow significantly in 2021 and 2022, and as the 5th and 6th largest economies in the world already, the ETP and the FTA are potential game-changers for businesses and consumers – doubling trade to GBP50 billion per year by 2030.
The UKIBC will continue to work closely with the Department for International Trade and with the Indian Government as negotiations begin later this year and will continue to feed the voice of our members and clients throughout the FTA process.
