The UK moved closer to securing a free trade deal with India as international trade minister Liz Truss agreed an enhanced trade partnership during a five-day visit to the country.
Truss and Piyush Goyal, India’s commerce and industry minister, signed an enhanced trade partnership (ETP) which marks a step on the road towards a potential comprehensive free trade agreement between the two nations.
The government released a joint statement with India earlier this week stating that the trade ministers had “committed themselves to make concrete progress on the trade and investment front to deliver quick gains for both countries, including joint timelines for further advances”.
The partnership will be formally launched during the visit of prime minister Boris Johnson to India later this year.
During her trip to India, Truss secured investment from Mumbai-headquartered steel giant Tata – already one of the UK’s biggest employers – to create 1,500 new high-skilled British technology sector jobs, the Telegraph reports.
Trade with India was worth £23 billion in 2019 and supports key industries such as technology and life sciences and around half a million jobs in each other’s economies. In 2019-20, the UK was the largest European market for India’s goods exports.
The UK government says that UK exports to India increased in value by nearly a fifth (19.3%) between 2017 and 2018, amounting to £8 billion in total. Of these, nearly 70% were goods, with total goods exports from the UK to India totalling £5.5 billion in 2018 (ONS, 2018).
The size of the country makes it an appealing market for the UK, with some commentators believing trade between the two countries could be much bigger.
Gaurav Singh, founding partner at venture capitalist firm JPIN VCATS, told the Express a deal could be worth £100bn.
“India is one of the world’s largest economies and presents huge potential as a key partner for trade and investment for the UK,” he said. “A trade deal with India could be [worth] as [much] as £50-100 billion, given India was a top two FDI [foreign direct investment] source for the UK and the UK has been a top six investor into India.”
India gained its independence from Britain in 1947, becoming a republic in 1950. It remains a key member of the Commonwealth.
Trade was formally established between the two countries back in 1600 when Elizabeth I gave the new East India Company a royal charter.