The story so far : Last month, India and Britain launched trade talks in Delhi, with an aim to finalise a free trade agreement (FTA) as soon as possible. The proposed pact with Britain could help double bilateral trade by 2030, a Government statement said, after talks between Commerce and Industry Minister Piyush Goyal and U.K. Secretary of State for International Trade Anne-Marie Trevelyan.
What is an FTA?
An FTA is an agreement between two countries wherein it allows free flow of goods and services to and from both sides, removing all tariff barriers to boost trade with one another.
Which country does the U.K. have an FTA with?
The U.K.’s somewhat fettered wings to the European Union’s horizons have been fully undone, after Brexit happened, and Britain can now fly the world with full-flown wings, especially its trade. The first such flight was seen when the U.K. signed an FTA with Australia on December 17, 2021, eliminating almost 99% of tariff on both sides, allowing free flow of goods between the two countries. This will save nearly $10 billion for Australia in its exports of agricultural products to Britain and the U.K. will save several hundred million dollars in automobile, liquor and cosmetics exports. The pact further helps Britain access the Pacific Rim, an 11-nation trade conglomerate including Australia called the Comprehensive and Progressive Trans-Pacific Partnership.
What does it mean for India?
Likewise, Brexit also paved the way for Britain to freely and comprehensively negotiate a new free mega trade deal with India, talks for which are underway. The£1billioninvestment and commercial trade deal India signed with Britain on May 4 last year creating 6,500 jobs in the U.K. was a kick-starter to this, opening a new chapter in commerce between them.
As Lord Karan Bilimoria, President of the Confederation of British Industry, put it: “The free trade deal between India and the U.K. will usher in a new era in the annals of India-British trade cooperation. The renewed partnership will bring in enormous changes not only in trade, but enhanced cooperation in agriculture, education and health sectors.”
He also said, “India’s traditional stakes are high in Britain as British Indian companies cumulatively turned over more than £85 billion just last year even amid the pandemic. And India’s trade would see a quantum jump when the free trade pact is signed, from £23.3 billion when they inked an Enhanced Trade Deal last year to £50 billion post-FTA. The British inward investment into the subcontinent was nearly £21 billion in the last two decades making Britain as the largest western investor in India, and this will also see a substantial increase.”
With India set to becoming the world’s third largest economy by 2050, India not only becomes the U.K.’s most preferred partner, its 1.5 million diaspora in the isles would get a shot in the arm when the FTA is signed.
What is India seeking from the U.K.?
While the talks between Ms. Trevelyan and Mr. Goyal,under the aegis of the 15th U.K.-India Joint Economic and Trade Committee, centred around removing all trade bottlenecks, and green trade, India is also seeking cooperation from Britain to reduce its carbon footprint by 45% while steadfastly promoting green energy.Ms. Trevelyan sounded pretty optimistic: “This is just the start of a five-star year of U.K. trade, forging closer economic partnerships around the globe and negotiating deals that work for businesses, families and consumers in every part of the U.K.”
“FTA negotiations with India and the already-signed FTA with Australia,” as Lord Bilimoria detailed, “mark Britain’s deft Indo-Pacific tilt, beyond the absolute EU-bind.”
What are the sectors that will benefit?
With trade between India and the U.K. set to soar, there are substantial activities simultaneously taking place in other sectors, especially agriculture and education. The second Green Revolution, aimed at increasing food production in India to 400 million tonnes in the next 15 years, is led by plant ecology scientist and co-chair of the Global Food Security Strategic Research Initiative Prof. Howard Griffiths of Cambridge University under Transforming India’s Green Revolution by Research and Empowerment for Sustainable food Supplies (TIGR2ESS).
The TIGR2ESS, led by the chief investigator, Prof Griffiths, would strengthen alliance between Indian and British experts in social policy and science, hydrology and crop science based on the thesis of making modern agricultural practices reflect the needs of society acceptable to India today. The research programme, funded by Cambridge University to the tune of £9 million, will have diverse partners such asthe University of Cambridge (leader), Rothamsted Research, John Innes Centre, Centre for Global Equality, Universities of Essex and East Anglia, The British Dietetic Association and 19 higher education and research institutes in India including the National Institute of Agricultural Botany, Hyderabad and seven NGOs.
There are also animated parleys between these countries for more cooperation in education, and possibly, India would allow more U.K. universities to open their branches in the subcontinent after the FTA.
Lord Bilimoria, who also is Chancellor of Birmingham University, said, “The cooperation in education between India and the U.K. is already on for years as many exchange and collaborative programmes have taken place and some U.K. institutes have already set up their Indian campuses, but will reach its peak when the Indian government allows more U.K. universities to open their direct branches in India.”
Vijay Elangova is a senior journalist based in the U.K.