PM to visit India this week in bid to 'drive progress' in FTA talks and double trade by 2030

Tue 19 Apr 2022
Posted by: William Barns-Graham
Trade News

uk india trade

Boris Johnson is travelling India for talks with his counterpart Narendra Modi this week in a bid to accelerate trade talks between the two countries.

The government announced that the visit will “drive progress in the free trade agreement negotiations launched earlier this year”.

The meeting with Modi has previously been postponed twice due to Covid-19.

Trade ambition

According to the Independent, the UK hopes to double trade with India by 2030 by slashing tariffs for products such as cars, Scotch whisky and green tech.

Trade between the countries was worth £21.5bn last year and the government thinks a deal would increase the UK’s total trade by £28bn a year.

Whisky

Whisky brands are particularly keen on a deal as India is the world’s largest market for the drink and the second-largest Scotch export market by volume. However, India currently imposes 150% tariffs on the spirit.

Jean-Etienne Gourgues, chair of Chivas Brothers, told the Financial Times that the company wanted to “at least double the size of the market” if New Delhi

“And with the size of the population of the middle class, I’ve seen the appetite is extremely high. It should become one of the top markets,” he added.

Visa issue

With the third round of formal trade negotiations scheduled in New Delhi this month, trade minister Anne-Marie Trevelyan is also pushing for expanded access for City services firms wanting to operate in India, report City AM.

Any deal will not include more visas for Indians travelling to work in the UK, however. A source close to Trevelyan said: “the prospect of more Indian visas has not even been discussed in the first two rounds of negotiations”.

A senior DIT official said: “Trade and immigration are separate policy areas, and immigration is not routinely discussed in trade negotiations. We would only agree a deal that is in the UK’s interests and all trade negotiations, including on immigration, are subject to approval by cabinet.”

Indian reluctance

India has proved reluctant to sign trade deals in the past but has recently inked an agreement with the United Arab Emirates and an interim deal with Australia.

It also signed a Comprehensive Strategic Partnership with the UK to boost investment and jobs as part of a plan to double trade by 2030.

Russia problems

India’s relationship with Russia could be problematic, however, with Modi’s government so far refraining from criticising Moscow over the war in Ukraine, according to the Guardian.

India abstained last month in the United Nations vote condemning the Russian invasion and the countries have also increased trade in goods such as oil since the crisis began.