New Delhi: As negotiations for a Broad-Based Bilateral Trade and Investment Agreement with the European Union is heading nowhere, India should press for a separate Free Trade Agreement with Britain, impetus for which should be given right away during Prime Minister Mr Narendra Modi’s ongoing visit to UK, ASSOCHAM said today.
“The protracted negotiations with the EU on the trade opening pact are causing India a great opportunity cost…With global slowdown hitting our exports, India needs easier market access in major markets without much delay. So, why not have an independent Free Trade Agreement (FTA) with the UK,” ASSOCHAM Secretary General D S Rawat said.
In any case, given its bumpy internal dynamics with the EU which pull in different directions, UK should also seek an independent trade pact with India. If at all, it has some legal issues within EU, it should be able to resolve the same at its own end.
The FTA with the UK need not be done at the cost of the one being negotiated with the European Union. “Given a complex nature of the EU structure and its vast internal issues, there is no likelihood of reaching a deal with the 27-nation bloc in the near future. However, it would be much easier to negotiate and finalise a deal with Britain which also needs a vast Indian market for reviving its economy. The situation is ripe for a great trade deal,” the chamber said in its paper, coinciding with the visit of the Prime Minister Mr Modi to Britain.
Though UK is among India’s top 24 trading partners, with the 18th rank, it used to occupy the number one position for long even after India’s independence. Given the vibrancy of the British economy and a growth potential in India, the two can work together for mutual benefit in the areas of high technology, financial services, education, health, Information Technology, textiles, transportation, urban infrastructure and defence.
To draw a parallel, India has an all encompassing FTA with the ASEAN while at the same time, it has separate deals with the member countries like Singapore. The two can go on similar tracks.
The ASSOCHAM paper stressed the need for a boost to trade engagement with the UK in the wake of recent drop in volume and value. The two-way merchandise trade has fallen from USD 15.82 billion in 2013-14 to USD 14.33 billion, marking a decrease of 9.39 percent.
India’s main exports to the UK are garments and textiles, machinery and instruments, petroleum products, footwear and leather, manufactures of metals, gems and jewellery, engineering goods, transport equipment and parts, spices, drugs & pharmaceuticals and marine products. The main imports from the UK to India are machinery and equipment, ores and metal scraps, precious and semi-precious stones, silver, metalifers, aircrafts and parts, beverages and spirits, machinery, engineering goods, and other professional instruments other than electronics, non-ferrous metals, and chemicals. (ANI)