A fortnight after Britain voted to exit the European Union (EU), U.K. Business Secretary Sajid Javid on Friday held talks with Commerce & Industry Minister Nirmala Sitharaman on the possibility of inking a separate UK-India Free Trade Agreement (FTA).
Asked specifically if there was a discussion on the possibility of a separate bilateral FTA with the U.K., Commerce and Industry Minister Nirmala Sitharaman said: “ Naturally…once the process of informal discussions starts then we get into discussions in detail. They will all fall into a formal framework...whether it is a preferential or a free trade agreement that will be a mutually discussed matter.”
On the nature of future talks with the EU on the proposed India-EU, Ms. Sitharaman said: “With the EU of course, it shall continue but it will be recalibrated now that U.K. is out of EU, so we shall be doing both.”
Talks constructive
Javid said his discussion with Ms. Sitharaman “was very positive and constructive. India and U.K. already have a very strong trade and investment relations and we are looking at how we can go further and look forward to working with her.”
Asked whether there were any discussions on Tata Steel, Sitharaman said, “No. I have not discussed about Tata Steel at all with the U.K. minister,” she said adding that only bilateral trade and investment related issues figured in the talks.
“My talks with him and his visit have been on informally but pro-actively engaging on trade related matters post-Brexit and on that, I got the impression that the UK minister is very keen that we start the informal process and we are quite happy to engage with the U.K. post-Brexit,” she said.
“Trade with U.K. is substantial. Indian investments in UK are one of the biggest. A lot of jobs created in the U.K. are by Indian investors. Similarly on services, we have great potential. I have agreed to have our chief negotiator and invited his chief negotiator to speak to each other, so that we informally know from where we are going to start,” she said.
Trade ties Earlier during the day, the U.K. government in a statement said Javid, in meetings with Indian Finance Minister Arun Jaitley and Ms. Sitharaman, will “outline his vision for what a future trade relationship between the U.K. and India might look like outside the EU.”
“I am in India today to launch these initial trade discussions. There is a strong bilateral trade relationship between our two countries and I am determined that we build on this,” Javid said in the statement. “The Business Secretary is expected to make clear that he would like the U.K. and India to have a trade agreement in place as soon as possible after the U.K. leaves the EU.”
It said: “Alongside visiting Delhi, the Business Secretary will also be in Mumbai where he will meet senior Tata Group board members to discuss the ongoing sale of their U.K. steelmaking assets.” The UK is keen that Tatas should suspend the sale of Tata Steel UK. The group wanted to sell its steel business in UK owing to fall in steel prices, cheap imports of the commodity from China and rising energy costs. Tatas move would have hit around 11,000 jobs.
Tata Steel Javid met Tata Steel senior management chairman Cyrus Mistry ahead of the company’s board meeting on Friday and held discussions regarding fate of Tata Steel’s UK assets, put on sale.
Javid’s meeting with Tata management was crucial amid the reports that Tata Steel may “pause” its plans to sell off most of the troubled UK units, including the Port Talbot steelworks in Wales.
“Just finished meeting with Tata Steel in Mumbai. Now off to Delhi for talks on UK/India trade," Javid said in a tweet.
Tata Steel officials confirmed Javid’s meeting with Tata Steel senior management and said that talks included on the issue of the company's proposed sale of its steel assets in Britain but refused to share further details as the board meeting was slated later in the day.
“Alongside visiting Delhi, the Business Secretary will also be in Mumbai where he will meet senior Tata Group board members to discuss the ongoing sale of their UK steelmaking assets,” Department for Business, Innovation & Skills, UK Trade & Investment said in a separate statement.
Foreign direct investment inflows from Britain to India between April 2000 and March 2016 were worth $23.1 billion.
Largest G20 investor In FY’16, India’s exports to the EU were $35.35 billion, while India’s exports to Britain were $9.35 billion. The U.K. government statement said the U.K. is the largest G20 investor in India, while India invests more in the U.K. than the rest of the European Union combined. India has also emerged as the third largest source of FDI for the U.K.
Commerce secretary Rita Teaotia had on June 24 said ‘Brexit’ will not have any immediate impact on India’s trade and investment with the U.K. and the EU, but the proposed India-EU Free Trade Agreement (FTA) will see some “modifications and moderations.”
She added that Britain’s exit from the EU will certainly affect India’s interests on those tariff lines where concessions were being considered in the proposed India-EU FTA on account of Britain. India will undertake a study of those Britain-related tariff lines that are part of India-EU FTA talks, Teaotia said. She also said the implications of Brexit will happen only after 2018 when the terms and conditions regarding Britain’s exit from the EU are likely to be finalised.
