The one billion pound trade deal : A new era in the UK-India relations
A virtual meeting between Prime Ministers Boris Johnson and Narendra Modi occurred on the 4th of May 2021, where they agreed on a private sector investment of ￡1 billion. The ‘Enhanced Trade Partnership’ is expected to improve the existing trade relationship between India and the UK. The deal will also generate more than 6500 new jobs and boost the Indian and British economies. It has unlocked new trade opportunities for business across the two countries and aims at doubling the existing trade volume by 2030.
The deal comprises approximately ￡533 million of new investment from India into the UK market, focusing on some of the vital sectors such as technology and health. It also includes an investment of ￡240 million from India’s Serum Institute, which is directed toward vaccine research and development, clinical trials, vaccine manufacturing and sales. The investment is viewed as a crucial step in assisting both the countries as well as the rest of the world in battling the pandemic. The Enhanced Trade Partnership is bound to create better opportunities for British firms in Indian industries such as life sciences, food and beverages, and the service sector.
Serum Institute of India invests ￡240 million
Similarly, British firms have also announced new export deals worth over ￡446 million with India. The contract also includes exporting the ‘Versius’ surgical robotic systems by CMR Surgical to the Indian hospitals, aiding the surgeons in performing minor surgeries at ease.
The road map rolled out for 2030 will expand the UK-India partnership in areas such as health, climate change, higher education, shared security, and most importantly, enable in strengthening the economic tie between the two nations.
Highlights of the Enhanced Trade Partnership
- 39 new bilateral trade investments across various sectors
- Removal of export barriers on goods ranging from fruits to automobiles and medical supplies
- Lifting barriers in Indian legal services
- Enhanced trade opportunities across varied fields like pharmaceuticals, technology, food and beverages, and the service sector
- Recognition of higher education qualifications from the UK to encourage student flow
India and the UK already have a lasting trade relationship. Over 9,900 VAT-registered British businesses had exported goods to India in the year 2019. The Indian and British investments support more than 400,000 jobs. Over the years, the two countries have been the largest investors of each other’s economies.
The new deal will remove existing export barriers on a wide range of goods ranging from British apples and pears to medical supplies. It will also lift barriers in the Indian legal services, enabling lawyers from the UK to practise foreign law in India. In return, the UK agreed to increase access to its nursing and fisheries sectors. Moreover, the deal will also commit both the parties to deepen collaboration in the educational sector and the recognition of higher education qualification from the UK to increase knowledge distribution and student flows between the countries.
The Enhanced Trade Deal will also lift existing barriers in the higher education sector
In addition, the trade deal will pave way for the much anticipated UK-India free trade agreement in the near future. With a population of 1.4 billion, India is one of the largest markets in the world, and the Enhanced Trade Partnership will create immediate opportunities for British firms in the vast Indian market. Currently, the value of trade between the two countries is over ￡23 billion a year. According to Liz Truss, the two countries have agreed upon the British Trade Secretary – a bilateral free trade deal – by the end of 2021. The deal will involve discussions about reducing tariffs and new agreements on digital technologies.
Last week, PM Johnson addressed Indian business leaders from companies such as HCL and Infosys about the importance of a strong economic tie between India and the UK. Besides, the UK had delivered ￡6 million worth of medical aid last week to support India in response to its emergency appeal for help. Business leaders in the UK have also been offering vital resources to help India tackle the current scenario.
Indian investment deals announced
- Infosys- generating 1,000 IT jobs in the UK
- HCL Technologies- generating 1,000 jobs in the UK
- Mphasis- an investment of ￡35 million, creating 1,000 jobs in the UK
- Q-Rich Creations- an investment of ￡54 million, generation of 667 jobs in the UK
- Wipro- an investment of ￡16 million, creating 500 jobs in the UK
- 12Agro- an investment of ￡30 million, creating 465 jobs in the UK
- Mastek- creating 357 jobs in the UK
- Sterlite Technologies- an investment of ￡15 million, generation of 150 jobs in the UK
PM Johnson believes that the job opportunities will enable in accelerating the Indian and British economies and help the families recover from the impact of the pandemic. Experts predict that the deal will be a stepping stone for enhanced trade in the future and a driving force that will lead to more opportunities in the next ten years.
The new trade partnership will enable the countries to address the market access barriers and benefit companies and consumers alike. The UK strives to have a close relationship with India, which is one of the fast-growing economies in the world. The Enhanced Trade Partnership will be a major catalyst for growth and mutual development in the future.
Some important links
private sector investment of ￡1 Billion
https://www.gov.uk/government/news/prime-minister-announces-1-billion-of-new-uk-india-trade
lift existing export barriers
a bilateral free trade deal will be negotiated
Founder at Indo UK Business Consortium - IndoUKB2b
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