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Better Commercial Relation Is The First Step For A UK-India Free Trade Pact

    4 May , 2021         Fdiindia

Better Commercial Relation Is The First Step For A UK-India Free Trade Pact

The events of 2020 and early 2021, BREXIT and COVID-19, have undoubtedly thrown up barriers, forcing us to step 'outside the box' of our job processes and activities. They are, though, prompting them to look for innovative ways to re-energize alliances and streamline supply chains.

Despite the current COVID-related activities, where UK-India cooperation is once again growing to the occasion, there is a real chance to look forward and catalyse new avenues of improving the UK's bilateral economic ties with our major partners around the globe. India is at the top of this chart, not least because both India and the United Kingdom are rediscovering the enormous capacity of collaborating to address shared challenges.

In this sense, a renewed emphasis on the achievement of a substantive Free Trade Agreement (FTA) between India and the UK should be a goal, alongside help during the current COVID boom. 

India is the UK's second-largest FDI investor, and the UK remains one of the largest G20 investors in India, with a total investment of approximately GBP 21 billion, resulting in the development of an economy of 2 million more citizens inside or based on their indigenous supply chains. All of this is actually sustained by a mix of Ease of Doing Business (EoDB) reforms and World Trade Organization (WTO) laws.

Surely, this parallel and current interest in each other's peoples and economies would serve as a solid basis for establishing a rules-based framework of economic ties between India and the UK in the coming years, resulting in mutually beneficial prosperity.

In terms of B2B and B2C operations, a lot has also been accomplished. The renewed focus on improving G2G relationships with the overall target of achieving an FTA is especially promising. 

Today's FTAs are 'living papers,' adapting to the quickly evolving economic circumstances. Prime Minister Narendra Modi set a target for India to become a $5 trillion economy in the near future after re-election in 2019.

His 'Make in India' and 'Atmanirbhar Bharat' key policies aim to build a thriving, homegrown economy with more domestic and sustainable supply chains in sectors like production, global supply chains, IT, waste management, healthcare, and infrastructure (self-reliant India). Simultaneously, the UK is concentrating on strengthening its existing ties and investments with India, and encouraging Indian investment in the UK.

It's encouraging to see that people's priorities are increasingly aligned. This shared ambition bodes well for potential popular areas of digital technology growth in India and the UK, especially in key areas like health-tech and education-tech. India and the United Kingdom are also among the world's climate-change leaders. With the UK hosting COP26 in November 2021 and heavily invested in renewable energies and other solutions, there is plenty of space for collaboration.

There is a lot to do at the same moment. According to the UKIBC's Doing Business in India survey, 'legal and regulatory hurdles' such as 'foreign exchange controls,' 'goods and services levy,' 'production duties,' 'alignment with international standards,' and 'company incorporation' are the most frequently chosen obstacles to doing business in India by UK companies.

The Joint Trade Review, the Enhanced Trade Cooperation, and, eventually, the Free Trade Agreement are all critical components of a solid, lively, and long-term relationship with India. They are components of an iterative mechanism that can draw on and improve existing partnerships. Company participation in each other's economies and expanded G2G dialogue are being guided by the needs and aspirations of both India and the United Kingdom.

COP26; CHOGM; G7/D10 - as well as the forthcoming UK-India dialogue, which is poised to deliver many prospects for bilateral trade development and cooperation between both our countries - will both take place in 2021. Though the immediate attention should be on COVID-related issues, 2021 would definitely usher in a new age of economic collaboration between India and the United Kingdom.