Boris Johnson resigned on 7th July 2022. This raised the possibility that discussions on the UK-India Free Trade Agreement, which were in full momentum, might be impacted.
A Free Trade Agreement is typically concluded as a result of a number of formal rounds of discussions between the two governments. The July 2022 round of discussions took place on 27th July and joint outcome statements from these discussions signposted the intent to continue the discussions with a view to concluding in October 2022.
With new Prime Minister Liz Truss appointed on 6 September 2022, it is theoretically possible that this timeline may yet be impacted. That said, it’s equally likely that Liz Truss’ team will be looking for early wins, hopefully not compromising the quality of the agreement.
The UK-India Free Trade Agreement
Talks surrounding the free trade agreement had started in January of this year. This agreement was meant to boost investments as well as bilateral trade between the two countries. When such agreements are in play, both countries can either eliminate dues altogether, or they can reduce the duties on customs when it comes to the maximum goods that can be traded between them. We also expect to see non-tariff changes designed to reduce the friction in trade and investment flows between the two countries. In addition to this, norms are eased when it comes to promoting investments as well as service trade.
Seamless, a part of the Sannam S4 group, can help businesses based in the UK, explore, enter and expand into India. From helping meet local compliance laws to ensuring that operational duties are met, Seamless can help UK businesses expand globally.
Imports and Exports Between The UK and India
One of the countries that can be considered a key investor as far as India is concerned, is the UK. In 2021-22, New Delhi alone attracted foreign direct investment of at least $1.64 billion. India also exports items to the UK. These mainly include textiles as well as garments that are ready made. Jewelry as well as gems are also exported, as are goods used in engineering.
Other products that India exports include petrochemical products as well as petroleum. Spices, machinery, metal products and even marine items are also exported by India. Imports from the UK tend to include stones that are precious as well as semi-precious, goods used in engineering, as well as metals that are non-ferrous. When it comes to the service sector in the UK, it is one of the largest anywhere in Europe, when it comes to IT services from India.
Data provided by the Department for International Relations in the UK shows that the total trade when it comes to goods and services between these two countries amounts to around £24.3 billion. UK’s exports to India can be valued at around £8.4 billion. Its imports, on the other hand, go up to around £15.9 billion.
The road map set by Johnson-Modi aimed to double these figures by around 2030. Experts are of the opinion that the free trade agreement could push these figures up even more.
Boris Johnson and India
In his term spanning nearly three years, Boris Johnson has been able to leave behind foreign policies that are very friendly towards India. To him, India has been a country that has taken priority. The focus that Johnson gave on India can be seen to be in line with the steps taken to free the UK from European dependency. According to Anand Memon, a professor at the King’s College London, Brexit and Boris Johnson’s legacy regarding it, is what has forced the UK to become more active again in politics.
Prime Minister Liz Truss is also a member of the Conservative party. And it will be her duty to improve upon the work done by Johnson and to strengthen the ties between UK and India. If your business is considering taking advantage of the FTA to expand into India, then Seamless can help you.
With Seamless, you have a partner on the ground that you can trust. From hiring locally to meeting local compliance laws, Seamless can walk you through the process of expanding your business into a new country. Irrespective of what the results of the FTA turn out to be, with Seamless by your side, your entry into the Indian market will likely be a successful one.
“The Free trade agreement is a win-win for both the countries for British industry, opening up a huge Indian market and for the Indians access to British high tech services and green technology.” Ashok Swarup, Sannam S4 Group India Chairman.