UK foreign secy’s visit: Boosting trade, Indo-Pacific security to top agenda
Boosting trade and investment, including negotiations for an interim early harvest deal, and security cooperation across the Indo-Pacific are expected to top the agenda during UK foreign secretary Liz Truss’ maiden visit to India next week.
This will be the first visit to Asia by Truss since she replaced Dominic Raab as foreign secretary in mid-September, and only her second trip abroad following a visit to the US and Mexico. She is expected to review bilateral ties with her Indian counterpart S Jaishankar and meet top business leaders in New Delhi and Mumbai during her three-day visit.
With India and the UK recently sorting out a row over vaccine certification for travellers, both sides are looking forward to meaningful engagement on key issues, especially trade and investment and closer cooperation across the Indo-Pacific. With the two sides set to launch negotiations for a free trade agreement on November 1, the UK is especially keen on finalising an interim early harvest deal by March 2022.
People familiar with developments said on condition of anonymity that Truss is expected to make a strong pitch for closer economic ties as part of the UK’s efforts to forge new trade partnerships around the world in the wake of its exit from the European Union. Among the top business leaders, Truss is expected to meet during her visit is Ratan Tata, the people said.
In a reflection of the UK’s focus on the Indo-Pacific, Truss’ trip to Mumbai will be timed to coincide with the arrival of a carrier strike group led by HMS Queen Elizabeth, Britain’s largest warship, in the waters off India’s financial hub on October 21. The aircraft carrier is transiting the Indian Ocean on her maiden deployment and conducted exercises with the Indian Navy in May. The UK carrier strike group will carry out further exercises with the Indian Navy and air force this month.
Two executives working in separate industry associations said, requesting anonymity, said the Indian government has been in constant touch with the domestic industry to obtain its views for trade negotiations with the UK. To address concerns of all stakeholders, the commerce ministry sought comments from industry representatives in June, an official of an economic ministry said on condition of anonymity.
“FTAs cannot be one-sided. It is about give and take. Hence, the industry should be prepared for opening up in certain areas and competing with foreign entities. But the gains are immense for both India and the UK, and both partners are taking the views of industry leaders of the two sides for better understanding,” the official said.
Confederation of Indian Industry (CII) director general Chandrajit Banerjee said: “We understand the UK government had done initial consultations with its industry. In India, industry too was consulted on issues that are part of the early harvest deal as well as for the future comprehensive FTA. These include goods, services, investment and procurement.”
He added, “Our trade negotiating team is having regular consultations with industry. Since the target is to complete the early harvest deal by December end, senior officials have already engaged in negotiations. At the political level, the leaders are likely to meet on the sidelines of the G20 Summit and the WTO ministerial conference later this year.
“India is hoping to get preferential access for those products where we lost GSP. That includes textiles, apparel and other labour-intensive export-oriented products. Besides, in-services, we expect further easing of work visas for Indian professionals, both for intra-corporate transfers and contractual service providers.”
PhD Chambers of Commerce and Industry (PHDCCI) president Pradeep Multani said possible opportunities existed in negotiating higher thresholds to “reserve some sectors temporarily and to exclude some permanently”.
India should take an aggressive approach instead of a defensive one, as Indian businesses would have easier access to the UK market, he said. “It is fair to assume that ICT, financial services, food and beverages and pharmaceuticals will benefit the most from the trade and investment agreement, but this will only become evident as discussions proceed,” he said.
According to a spokesperson of FICCI, the two governments have been consulting industry associations in India and the UK. “These meetings have been ongoing since the announcement of the Enhanced Trade Partnership. Once negotiations start between the two countries, more meetings will be scheduled,” the spokesperson said, referring to the partnership launched by the Indian and UK prime ministers during a virtual summit in May.
“FICCI has submitted its recommendations to the commerce ministry covering industry expectations on goods and services,” the spokesperson added.
The British side is expected to demand the removal of tariffs of up to 150% on spirits, which will require more consultations with the industry before offering any concession as this could impact India’s trade negotiations with the European Union, an industry executive said, requesting anonymity.
In the field of services, the UK is expected to demand market access for its legal and auditing firms. This too requires more informed consultations with professional bodies before arriving at any decision, the executive added.
As part of the Enhanced Trade Partnership, Britain will open up its fisheries sector to more Indian players, facilitate opportunities for nurses, recognise Indian seafarers’ certificates and enter into a dialogue on a social security agreement.
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