NEW DELHI, Oct 25:
Rishi Sunak becoming the UK’s prime minister is likely to give much-needed momentum to ongoing negotiations for the proposed free trade agreement between India and Britain, trade experts say.
The countries have already missed the Diwali deadline for concluding the negotiations because of political developments in the UK.
According to the experts, political stability in the UK now would help fast-track the negotiations for the pact, which would give a boost to the bilateral trade and investments between the countries.
Sunak, 42, on Monday won the race to lead the Conservative Party and is now set to become Britain’s first prime minister of Indian origin.
“It is a very positive news for India. The development will definitely help in giving much-needed momentum to the talks,” Federation of Indian Export Organisations (FIEO) Vice Chairman Khalid Khan said.
However, Biswajit Dhar, Professor in the Jawaharlal Nehru University, said the new UK prime minister would like to first focus on domestic issues and set the economy in order.
“Trade deals do not happen when there is a crisis. They happen when the economy is performing well,” Dhar said.
Another trade expert added that both sides should not be in a hurry to conclude the talks.
“Let the things stabilise in the UK, then both the countries should resume the negotiations,” the expert said.
Last week, British Prime Minister Liz Truss resigned as the Conservative Party leader saying she can no longer deliver the mandate she was elected on in September.
Commerce Secretary Sunil Barthwal on October 20 said negotiations for the proposed trade pact between India and the UK are moving in the right direction, and both sides are expected to reach an agreement soon.
The countries are negotiating the pact to boost bilateral trade and investments. Both had aimed at concluding the talks by Diwali (October 24), but the negotiators missed the deadline.
In January, both countries formally launched talks for a free trade agreement. In such pacts, two countries either eliminate or significantly reduce customs duties on maximum number of goods traded between them, besides easing norms for promoting investments and services trade.
The UK is also a key investor in India. New Delhi attracted foreign direct investment of USD 1.64 billion in 2021-22. The figure was about USD 32 billion between April 2000 and March 2022. India’s main exports to the UK include ready-made garments and textiles, gems and jewellery, engineering goods, petroleum and petrochemical products, transport equipment and parts, spices, metal products, machinery and instruments, pharma and marine items.
Major imports include precious and semi-precious stones, ores and metal scraps, engineering goods, professional instruments, non-ferrous metals, chemicals and machinery.
In the services sector, the UK is one of the largest markets in Europe for Indian IT services. The bilateral trade increased to USD 17.5 billion in 2021-22 compared to USD 13.2 billion in 2020-21. India’s exports stood at USD 10.5 billion in 2021-22, while imports were USD 7 billion. (PTI)
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