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India, UK begin formal free trade talks

Anne-Marie Trevelyan, UK's Secretary of State for International Trade, is in New Delhi and will meet with her Indian counterpart Piyush Goyal. India and Britain are launching talks on pursuing a free trade deal that is expected to boost bilateral trade by billions, making it among the most ambitious negotiations to take place after Brexit. (File Photo: AP)Premium
Anne-Marie Trevelyan, UK's Secretary of State for International Trade, is in New Delhi and will meet with her Indian counterpart Piyush Goyal. India and Britain are launching talks on pursuing a free trade deal that is expected to boost bilateral trade by billions, making it among the most ambitious negotiations to take place after Brexit. (File Photo: AP)

  • The UK has strengths in areas like high-end machinery and technology and India can offer opportunities to UK businesses to grow their share in India and take a larger pie of existing imports

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NEW DELHI : India and the United Kingdom on Thursday kicked off formal negotiations for a free trade agreement (FTA) to double the current bilateral trade of $50 billion in ten years.

At the launch of the negotiations, India's trade minister Piyush Goyal said the idea wa to seal an early deal and ruled out any sensitive issue becoming a deal breaker as both sides are focused on capturing the immense possibilities of mutual benefit the agreement would offer.

Goyal said the country stands to gain greater market access for Indian textiles, leather goods and marine products.

“Textiles, leather goods, footwear and marine products are areas where a large number of jobs are created in India and the UK is currently importing these items in a big way from across the world. So, without causing any detriment to their local industry, India can look to get a bigger share of the pie," Goyal explained at a media briefing.

The UK has strengths in areas like high-end machinery and technology and India can offer opportunities to UK businesses to grow their share in India and take a larger pie of our existing imports, Goyal said “It is a win-win situation for two complementary economies. 

He added that the terms of reference of the proposed FTA have been finalised and formally endorsed by both the countries on Thursday to start negotiations.

UK’s international trade secretary Anne-Marie Trevelyan said the UK aims to double trade between the two countries by the end of this decade supporting jobs, businesses and communities in both the countries.

Both the sides will consider the option of an interim deal that generates early benefits for both.

Commerce secretary B.V.R Subrahmanyam told to reporters that both India and the UK are highly complementary economies, still, the Indian side would carefully watch the negotiations on subjects such as agriculture and dairy sector given the need to protect the interest of subsistence farmers. 

Information technology and other business services including consulting are areas where Indian services sector is likely to benefit from the deal. Over the last few months, India and the UK have been scaling up cooperation in the services sector.

“A trade deal with India’s booming economy offers huge benefits for British businesses, workers and consumers. As we take our historic partnership with India to the next level, the UK’s independent trade policy is creating jobs, increasing wages and driving innovation across the country," a statement from the British government said quoting Prime Minister Boris Johnson.

By 2050, India will be the world’s third largest economy with a middle class of almost 250 million shoppers and we want to unlock this huge new market for British manufacturers across numerous industries from food and drink to services and automotive, Trevelyan said in the UK statement.

Removing duties by the Indian side alone is expected to increase UK's exports to India by up to £6.8 billion. Important UK exports like Scotch whisky and cars currently face enormous duties of 150% and 125% respectively, the statement said. There are nearly 600 UK companies in India employing more than 320,000 people and international investment from Indian companies already supports 95,000 jobs across the UK, it said.

Goyal said both sides were looking forward to a very strong partnership of mutually beneficial trade agreement with balanced concessions and market access in a wide range of sectors.

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