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Business News/ News / India/  ‘For UK, deeper trade ties with India are an absolute priority’

‘For UK, deeper trade ties with India are an absolute priority’

We are supporting reforms to the business environment in India through the sharing of the UK’s expertise on a range of areas, says Elizabeth Truss, UK’s secretary of state for international trade and president of the board of trade

Elizabeth Truss, UK’s secretary of state for international trade and president of the board of trade.Premium
Elizabeth Truss, UK’s secretary of state for international trade and president of the board of trade.

In the wake of Brexit, deeper trade relations with India are an absolute priority, says Elizabeth Truss, UK’s secretary of state for international trade and president of the board of trade. In India on a four-day visit for talks with her counterpart Piyush Goyal on an “enhanced trade partnership", Truss said in an interview that India and the UK had agreed to set up working groups to make progress towards removing priority market access barriers. On tax problems faced by Cairn Energy and Vodafone, Truss said she hoped that arbitral awards by international dispute settlement mechanisms will draw a line under them. Edited excerpts.

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What will be the impact of the UK-EU trade deal on the India-UK trade relations? In which sector do you think will there be more opportunity for Indian companies?

This agreement marked the start of the UK’s new chapter as an outward-looking global Britain. It ensures continuity for our trade with Europe and respects our sovereign right to deepen trade with dynamic partners around the world such as India. India is an incredibly important friend, ally and economic partner for the UK, and we want to take that partnership to an even deeper level. India is already an economic powerhouse and will rise to become the world’s second-biggest economy, so we really do see a bright future for India-UK relations.

Our trade relationship was worth £23 billion in 2019 and there are an incredible 383 Indian companies in the UK employing more than 82,000 people supporting jobs in every region and nation.

However, there is potential for so much more. I want to champion the industries of the future with India: advanced manufacturing, services, digital and data trade. These forward-leaning sectors will drive recovery and future prosperity by providing high-quality jobs for our people and supporting economic growth as we recover from this dreadful virus.

What non-trade and trade barriers are India and the UK seeking to address through the “enhanced trade partnership" agreed to by both sides?

We have taken great strides to remove barriers to trade already, with India recognizing the world-class standards of UK farmers by allowing Welsh lamb into its market for the first time.

We have agreed to establish a number of working groups and make progress towards removing priority market access barriers.

Meanwhile, we are supporting reforms to the business environment in India through the sharing of the UK’s expertise and experiences on a range of areas, including better regulation, trading across borders, and standards to make it easier for UK investors and exporters to do business in India.

India has proposed reforms in the post-Brexit immigration system in the UK. Will the UK government add India to the list of low-risk countries for movement of skilled workers?

We have recently introduced a single global immigration system, where individuals qualify for a visa based on the skills they can bring to the UK and not based on which country their passport is from. This new system offers more flexibility than the previous system for Indian nationals wishing to work in the UK. We have broadened the skills threshold, lowered salary requirements, suspended the cap and removed the resident labour market test. We are also introducing a graduate route this summer, which will enable Indian students to work for up to 2 years in the UK, or 3 for PhD students, without needing a sponsoring employer.

Our new system sends a message to the whole world that the UK is open for business and we want the top talent from around the world to contribute to our economy and society and help drive the UK forward, regardless of nationality.

India has been demanding the signing of a social security agreement with the UK. When can we see any progress on that front?

We are working with our Indian counterparts on a range of social and economic issues to promote the UK as a place to do business and trade. We are seeking to further improve our relationship. We value our international agreements with India and continue to work together to support our shared ambition for a stronger partnership.

Indian companies such as Jaguar Land Rover owned by the Tatas are likely to face increased trade barriers in accessing the EU market post the Brexit deal. What effort is the UK making to deal with such non-tariff barriers?

The UK remains a fantastic place to invest and do business in. Our agreement with the EU ensures there will be zero tariffs or quotas on trade between the bloc and the UK, where goods meet the relevant rules of origin, and includes provisions to facilitate trade and address non-tariff barriers for exports.

This deal includes modern and appropriate rules of origin, which mean that goods produced in either of our markets can qualify for zero tariff trade.

The rules of origin will allow manufacturers to use a significant level of input from abroad in British products, where appropriate, such as batteries in electric vehicles, but they prevent us having to accept imports from the EU at zero tariffs that are disproportionately produced elsewhere in the world.

India has proposed an early harvest agreement with the UK on select items of mutual interest. Is such a deal feasible?

We are considering all options in our bilateral negotiations that will ensure we can lower barriers to trade in a timely fashion, which will support our recovery and help pave the way to prosperity and help both nations recover from covid-19.

Many analysts believe signing a free trade agreement with India is not on top of the priority list of UK. What groundwork needs to be done before venturing into such negotiations?

Deeper trade relations with India are absolutely a priority and I am proud to be pushing on with our enhanced trade partnership.

Before then, we are focused on deepening our trading relationship with further removal of barriers to trade and investment, while fulfilling our commitment to achieving an enhanced trade partnership this year.

India and the UK have been collaborating on the covid-19 vaccine and have been seen as successful. What are the prospects for this partnership to grow in a post pandemic world?

The way India and the UK have supported each other in the fight against covid-19 has shown the power of our partnership and friendship.

We have been grateful to India for keeping supplies flowing to the UK of critical medicines and medical-grade personal protective equipment.

I am visiting the Serum Institute during my time in India, which is producing more than a billion doses of the UK-developed Oxford University-AstraZeneca vaccine. This will save lives across India and beyond its borders.

I am delighted that Wockhardt is helping produce these vaccines in North Wales. What’s more, this Indian pharmaceutical giant is extending its contract in a welcome move that will bring new jobs to the area.

From supplying each other with goods to collaborating over vaccines, our partnership can only get stronger from now on.

Do you see life sciences as an important area for UK companies to invest in India?

Life sciences are not only important in our handling of the pandemic, but for our economic future. The industry is a priority sector for both the UK and India, as evident from both sides committing to work together to remove barriers and increasing trade under the ministerial joint economic and trade committee meetings.

What are the prospects for investments in India in areas such as artificial intelligence and clean energy?

We are natural partners in pushing new frontiers in innovation, with our brightest minds working under the UK-India Tech Partnership on artificial intelligence, driverless cars and virtual reality.

Our nations are vibrant hubs for technology trade, with the UK home to the third-largest number of tech unicorns in the world and India hosting the third-largest number of tech startups. Together, we can help set new and better standards for modern trade in the 21st century.

Tax issues involving Cairn Energy and Vodafone had adversely impacted ties. Have both countries come out of this?

It’s not for me to comment on investor-state dispute settlement cases. I hope these arbitral awards will draw a line under these issues and note that Vodafone has maintained its wish to continue operating in India.


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Published: 08 Feb 2021, 07:23 AM IST
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