UK-India full trade deal is in sight: London think tank – Times of India

UK-India full trade deal is in sight: London think tank – Times of India
Share This :

LONDON: A free trade agreement between the UK and India “is very much a possibility”, according to a new briefing paper by London think tank Institute of Economic Affairs (IEA) published ahead of the virtual call between PMs Narendra Modi and Boris Johnson on Monday.
The paper, authored by Indian-origin IEA academic fellow Shanker Singham, who served as trade adviser to the US government and is a member of the Bretton Woods Committee, also states that the UK and India are set to announce an enhanced trade partnership (ETP).
He said that whilst a trade deal would lead to a substantial increase in bilateral trade flows, it would have an even more significant role to play in terms of the geo-strategic dimension as India could be brought into an alignment of nations, including the US, UK and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) members, as a bulwark against the threat from China.
“China’s threat is in large measure based on its network of anti-competitive market distortions, its state-owned enterprises and the projection of its market distorting practices on the rest of the world. The India-UK relationship could play a significant role in the containment of these practices,” it states. “The potential for the UK to use the ETP, and even the launch of FTA negotiations to lock the Indian government into a broader coalition of willing partners could be a game-changer for the Indo-Pacific region.”
The UK, India and the existing CPTPP countries constitute around half of the global economy.
“Many countries have sought to do a trade deal with India, but these have proved notoriously difficult to close. It is possible that the UK has the key to unlock the Indian puzzle,” Singham writes.
He states an FTA would have commercial benefits to both countries. The UK would like to see Scotch whisky tariffs reduced and greater access for UK financial, legal and professional services in India. India wants the UK to be more accommodating of business and student visas, in particular for IT executives. If the UK lowers its tariff schedule further below the EU’s Common External Tariff and diverges from EU bans on products, then Indian agriculture could substantially benefit too, it adds.
But the report warns that FTAs are “irrelevant if the rule of law and contracts are flouted, or if anticompetitive market distortions are the order of the day”.
Citing the cases of Vodafone, Cairn Energy and Devas Multimedia Pvt Ltd, the report raises concerns that the Indian government is “systematically breaking bilateral investment treaties (BITs), ignoring court and arbitration rulings, cancelling contracts, expropriating private property and using state institutions to prosecute the very parties whose rights they should be protecting”.
Singham urges Johnson in his talks with Modi to push the Indian government to recognise and respect its existing commitments under bilateral investment treaties.
“Future British investors in India will expect the Indian government to abide by the BIT, including arbitration judgments. If this cannot be certain, then why would any investor feel confident about the provisions of a future FTA?” the report asks.

Source link

Share This :