India is not the first tier country for post-Brexit free trade agreement (FTA)
and a lot more work would be required before Britain can start negotiating
such a deal with New Delhi, the UK government admitted on Tuesday.
In his submission to the ongoing ‘Global Britain and India’ inquiry being
conducted on post-Brexit India-UK ties by the House of Commons Foreign
Affairs Committee (FAC), UK Foreign Office Minister Mark Field flagged
some “high-value” trade disputes involving British companies in India as a
warning sign on the road ahead.
“It isn’t that India isn’t important, it’s just that India isn’t in that first tier,”
said Field, as he addressed questions from cross-party MPs on the influential
parliamentary committee.
“It is fair to say not all British companies have found it entirely easy to
operate in India. There have been a number of high-value trade disputes that
have required international arbitration. And, that has been a slight sense of
a warning sign,” he said, when asked to elaborate on the stumbling blocks to
an FTA.
Field, who is in charge of Asia in the UK’s Foreign and Commonwealth Office
(FCO), said that difficulties remain despite the “positive step” of India’s 53-
rank rise in the Ease of Doing Business rankings.
“There is in no a de-prioritisation of the Indian issue, there are other FTAs
which will probably be easier and smoother to manage, not least because
they have reached the end of an EU FTA, or other countries like Australia
and New Zealand, which are very much on the front foot to doing FTAs
quickly,” he noted.
In reference to the importance attached by India to the issue of visas and
immigration in relation to any post-Brexit trade agreement, the minister
claimed that the UK had a “good story” to tell on visas with some of the
largest number of skilled professionals coming from India.
“I think there is a better news story than sometimes meets the eye. There is
often a bit of a lag between the perception and reality of what is going on. But
if it [visas] is being ranked overwhelmingly at No. 1 [as a trade hurdle] by our
counterparts, then we do have to take it seriously,” he said.
Field was joined at the session on Tuesday by Fergus Auld, Head of South
Asia Department and India Coordinator at the FCO, who made a reference
to the lengthy FTA negotiations between India and the European Union (EU)
as a learning curve for future India-UK trade ties.
He said: “With India, the Department of International Trade (DIT) is looking
first at how to address other barriers to bilateral trade that would help build
towards a future trade relationship rather than going straight for an FTA.
“One experience that we have drawn is the lengthy negotiations between the
EU and India on an FTA have not yet concluded.”
The ‘Global Britain and India’ inquiry was launched by the FAC in July last
year as part of a wider Global Britain series in the context of Brexit. It has
been collating written and oral submissions from stakeholders on both sides
to establish what more needs to be done to strengthen trade ties with India
as the UK prepares to leave the EU, which will be compiled into a set of
recommendations for the government later this year.
The UK is due to leave the EU on March 29. Nearly three years after Britain
voted to leave the EU, its departure is uncertain. The UK government can ask
the EU to delay Brexit but all 27 EU leaders would need to give their
permission.
Prime Minister Theresa May’s plan to bring her Brexit deal back to
parliament for a third meaningful vote was thrown into chaos on Monday,
when the House of Commons Speaker, John Bercow, said parliamentary
convention meant it would be unacceptable for another vote to be held on an
unchanged deal.
Source: The Financial Express, India Wednesday, 20 March 2019