By Bilawal Hammad
Your commercial awareness dose
Trade and investment are ubiquitous. It is an important component of the New World Economic Order. Trade and investment are the lynchpins of the 21st-century globalized world. Every nation, nowadays, aspires to be a signatory to FTAs (free trade agreements). The United Kingdom and India also possess this aspiration. The UK, since the BREXIT earlier this year, is in the process of rejuvenating its bilateral trading relationships with many countries.
Following the British exit from the European Union, UK now has to sign trade deals with all its trading partners bilaterally. India is the second-largest trading partner of the United Kingdom. Both UK and India want to get back things to normal, as far as bilateral trade is concerned, by signing preferential and free trade agreements.
India is the biggest democracy in the world and is also one of the strongest and the rising economies of the world. Trade between the UK and India was worth 24 billion Sterling Pounds last year. India is the second-biggest investor in the economy of the UK. Indians own 842 companies in the UK. These companies raise the revenue of 41 billion Sterling Pounds and there are 1,10,000 people employed in these companies. According to estimates, the revenue of these companies has grown by 87% in the last five years.
UK and India held a Joint Economic and Trade Committee (JETCO) meeting in July 2020. In the meeting, both sides agreed to enhance their trade relationship by signing PTA (Preferential Trade Agreements) immediately and Free Trade Agreements (FTA) soon. International Trade Secretary of UK Liz Truss and Commerce Minister of India Piyush Goyal led the talk in the JETCO meeting and vowed to enhance bilateral trade by reducing trade barriers. According to Commerce Minister of India, Piyush Goyal talks are underway to sign an early harvest Preferential Trade Agreement (PTA) followed by Free Trade Agreement (FTA). The UK’s New Global Tariff (UKGT) serves as a building block for the UK and India’s bilateral trade relations.
The UKGT (UK’s New Global Tariff) offers a reduction in tariff on India’s exports to the UK. The UK has secured a reduction in tariff from India for a fertilizer named Polyhalite. This fertilizer is environment friendly and will also increase per acre yield. So, India is a big market for this UK based fertilizer to be exported. So, such steps will further ameliorate trade relations between the UK and India. UK’s International Trade Secretary Liz Truss said in a JETCO meeting, “At this stage, we want to keep all the options on the table, including a Free Trade Agreement at some point in the future.”
The bilateral trade relations between the UK and India are at their pinnacle. But there are some issues and difficulties in the relationship between the UK and India. India is a serious violator of human rights. Indian Government policies in Indian occupied Kashmir (IOK) like brutal crackdowns, lockdowns, detentions, enforced disappearances, internet shutdown, and media censorship has embarrassed India internationally. Many Nations and International organizations have questioned these acts of India in Indian Occupied Kashmir (IOK).
UK’s foreign secretary Dominic Rabb said that the UK wants a post-Brexit trade deal with India but will hold it accountable for its human rights violations. While giving an interview to BBC Dominic Rabb said that although discussing human rights violations with India is difficult but we will do it because “we don’t duck difficult issues.” He also said that difficult issues are solved by political will and both the government of the UK and India have the political will to solve bilateral issues. In a crux, we can infer from the above discussion that the UK and India are soon to agree to a Free Trade Agreement (FTA). But there are outstanding issues to be solved amongst them before the FTA between them could be signed.
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