India and the United Kingdom have decided to wrap up key talks on trade issues by the end of 2021, expediting negotiations for a proposed free trade agreement (FTA) between both nations in the future.
Bilateral trade and investment ties were a major part of the talks between Prime Minister Narendra Modi and his British counterpart Boris Johnson during the digital summit held on May 5. The proposed FTA is a key part of the Enhanced Trade Partnership (ETP) launched by both nations that hope to galvanise bilateral business ties.
"We confirm our intent to finalise the pre-negotiation scoping phase for a Comprehensive Free Trade Agreement by the end of 2021. This will resolve market access issues, boost exports and strengthen our trade partnership across a comprehensive range of areas. Both sides will undertake respective scoping, consultations and domestic processes, with consideration of the opportunity arising from an Interim Agreement, to achieve the early gains of the ETP," a Joint Statement released by the Ministry of External Affairs after the meeting, said.
India has agreed to remove barriers to trade, a key British complaint, and has said that a balanced and beneficial market access package under the ETP will be created. This will cover diverse sectors such as agriculture, healthcare, education, legal services, seafarers, marine, healthcare and social security.
In the late hours of May 3, Johnson had announced new investments by Indian companies into the UK worth 533 million pounds, including a 240 million pounds investment by Serum Institute of India.
Going forward, the existing Joint Working Group on Trade will work on reducing or removing market access barriers faced by Indian and British businesses in both countries.
Closer dialogue on regulatory reform, tax administration, and trade facilitation and standards has been sought through the early conclusion of a new and refreshed UK-India Ease of Doing Business MoU. This will also encourage and institutionalise cooperation between relevant regulators, such as FSSAI and the UK regulator to facilitate exports and avoid trade disruptions due to non-compliance with standards by producers and exporters.
“Our countries are already close partners and friends, and today’s announcement of a 10-year roadmap working towards an FTA will take the bilateral relationship to the next level. In the immediate term, the focus will rightly be on removing market access barriers. Businesses in both countries are enthused by the opportunities to enter and expand across the UK-India economic corridor and the ETP, leading to an FTA, will make that more appealing and easier than ever,” UKIBC Group Chair Richard Heald said.
Closer ties on finance
After receiving a push from both prime ministers, the governments will also deliver the new UK-India strategic collaboration to accelerate the development of the Gujarat International Finance Tec-City, promoting greater links between it and the UK's financial services ecosystem.
More engagement on sustainable finance through a dedicated forum is set to ensure private sector fund flows into sustainable sectors in India supported by the industry-led India-UK Sustainable Finance Working Group. Deeper cooperation on infrastructure is also on the cards, through the new UK-India Partnership on Infrastructure Financing and Policy. This will support India’s ambitious plans for delivering large scale sustainable infrastructure under the National Infrastructure Pipeline.
Strengthening the UK-India Fintech Dialogue to enhance collaboration on financial services, London and New Delhi hope to facilitate faster flows of UK-India remittances. Building on the successful launch of RuPay cards in the UK, both nations will work on exploring options for enhancing cross-border payments between the UK and India.
Movement on migration
Both nations will also work on implementing the new comprehensive Migration and Mobility Partnership agreement signed between both nations. It will work towards easing movement of students and professionals as well as irregular migration keeping in view the UK’s new skills-based immigration policy. The deal is set to take effect by April 2022.
The UK has also commited to a joint dialogue with India, including relevant stakeholder participation, for mutual exchanges and sharing of information concerning the possibility of signing a Social Security Agreement.