Trade Analysis

India Keen On Trade; Tech Tie-Ups With EU, UK Possible

Published: March 2, 2023
Author: DIGITAL MEDIA EXECUTIVE

According to two people familiar with the development, India’s successful free-trade agreements with the United Arab Emirates and Australia in the last two months have encouraged the country and the European Union to plan three rounds of talks this year to conceptualise a basic framework under which the partners will negotiate a comprehensive deal to increase bilateral trade to more than $220 billion in five years. The development is significant because India-EU trade negotiations have been halted since 2013 over the movement of Indian professionals and high Indian tariffs on European farm produce. In addition to the talks with the EU, the UK is eager to expedite bilateral trade negotiations with India, and separate formal discussions with it may take place this year added, requesting anonymity. They stated that the UK is eager to conclude a trade agreement following its exit from the EU.

According to one of the sources, the EU recently expressed its intent to a team of Indian government officials led by Commerce Secretary B.V.R Subrahmanyam. “The EU has agreed to start formal negotiations soon after it will conceptualise a basic framework to proceed on this matter with New Delhi. It could take three rounds of discussions, which could conclude this year,” this person added.

Officials from the Commerce Ministry did not respond to an email inquiry. After signing the India-Australia Economic Cooperation and Trade Agreement (ECTA) on April 2, commerce minister Piyush Goyal stated that New Delhi is working on FTAs with the United Kingdom, Canada, and Japan Israel, the Gulf Cooperation Council, and the European Union.

“Both FTAs – the UAE and Australia – were concluded by respecting mutual sensitivities in a trusting environment. “A successful FTA with a developed country [Australia] has energised both the EU and the UK, particularly as India has emerged as a reliable partner and a significant factor in the global supply chain,” the second person said.

According to the first source, the India-EU FTA is expected to more than double bilateral trade between the two partners from the current $110 billion. Subrahmanyam recently visited Europe and met with key officials from both the EU and the United Kingdom. During his visit to Brussels last week, he also met with EU Director General for Trade Sabine Weyand and Executive Vice President Valdis Dombrovskis. The second person stated that it is possible.

This person explained that the India-UK FTA could happen before the EU deal because both New Delhi and London may not insist on a two-stage trade deal; this is because the UK wants to conclude a full free trade agreement (FTA) without resorting to an interim deal. The current value of bilateral trade between India and the United Kingdom is $ 50 billion (both goods and services).

Negotiations on the FTA are expected to begin before the end of the year, with the British side preferring that the talks result in a comprehensive pact, he said. Since leaving the European Union, the United Kingdom has signed trade treaties with 69 countries and the EU. Deals with 63 countries, on the other hand, are “rollover” arrangements. in comparison to those it had when it was an EU member.

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