A free trade agreement between the UK and India would increase trade between the countries by 25 per cent, new research undertaken by the Commonwealth shows. If implemented post-Brexit, UK’s exports to India would increase by 50 per cent, from $5.2 billion to $7.8 billion, according to the research estimates. Exports of UK products such as cars, beverages and spirits are expected to rise. The Commonwealth also predicts a 12 per cent annual increase in India’s exports to the UK.
The new paper, “Brexit: Opportunities for India”, was presented in New Delhi, where the Commonwealth brought Indian and UK industry representatives together to explore opportunities under a post-Brexit bilateral trade deal.
At the event’s opening, Rita Teotia, the Government of India’s commerce secretary, said: “Brexit has induced a degree of uncertainty. We have already chosen to engage, look at the opportunities and to deepen our relationship and to explore the opportunities that both countries offer to each other.”
She continued: “If we look at the health sector, increasingly India provides both on the goods side and on the services side, win-win situations for its partner countries. The UK has a very very robust and very strong national health service. Using our world class pharmaceutical generics industry, there is a possibility of leveraging this and making it a useful asset for the UK to be able to procure these medicines for their system”.
The seminar was attended by more than 100 stakeholders and organised by the Commonwealth Secretariat and the Government of India in collaboration with the Centre for WTO Studies (Ministry of Commerce and Industry), Federation of Indian Chambers of Commerce and Industry (FICCI) and Federation of Small and Medium Enterprises (FISME). The panellists included Advisory board members of the Commonwealth Enterprise and Investment Council and a leading industrialist of UK.
Dr Rashmi Banga, adviser and head of trade competitiveness at the Commonwealth Secretariat, said: “If India has an FTA with the UK post-Brexit they are both going to gain – it’s going to be a win-win situation. This new research identifies the specific opportunities of a bilateral agreement for India and the UK to boost trade in goods as well as services, benefiting both their national economies."
Thirteen new products have been identified which India can increase export to UK, including textiles and clothing, footwear, turbojets and transmission shafts, compression-ignition internal combustion piston engines and taps, cocks and valves. The value of India’s exports of these products to the UK is currently around $404 million, which could be increased to $2.1 billion, an increase of $1.7 billion. Trade in commercial services, construction services and financial services will also experience a boost.
To turn this potential trade into reality, the Secretariat has opened the membership of India-Commonwealth Association for Indian industry. This association provides a sustainable common platform for the members of Commonwealth to trade, form joint ventures, exchange technology and knowledge and harmonise existing standards.
Dr Banga continued: “The Secretariat is doing a lot of work for our member states on export diversification, trying to identify what kind of products or intermediate inputs they can export to link to global value chains. So in this context there was a request from the Ministry of Commerce and Industry in India. Now a lot of other countries are requesting the same, because when Brexit happens – all countries will have to re-engage with the UK.”