After British Prime Minister Liz Truss announced her resignation, commerce and industry minister Piyush Goyal on Thursday said that while the proposed India-UK free trade agreement (FTA) will be on track, New Delhi will “wait and watch” the ongoing political developments in Britain.
Prime Minister Liz Truss stepped down from the post of Conservative Party leader after just six weeks after her fiscal plan triggered a massive financial market blowout, pushed up living costs and enraged much of her own party leaders.
Truss’s resignation ignited concerns related to the ongoing FTA negotiations as she had, in May last year, signed off on the India-UK Enhanced Trade Partnership (ETP) for the former prime minister Boris Johnson-led government and was determined to pursue the FTA negotiations to meet the year-end deadline as part of UK’s major post-Brexit achievement.
“We will have to wait and see…what happens, whether they have a quick change of the leadership, whether it goes to the whole process…So let us see who comes into the government and what their views are. It’s only after that we will be able to formulate a strategy vis a vis the UK,” Goyal was quoted as saying at CII’s national exports summit.
Goyal, however, assured that politicians and businesses across the board in the UK are aware that it is “very” important for them also to do an FTA (free trade agreement) with India. “So my own sense is that whoever comes into the government will be wanting to engage with us,” he added.
‘FTAs with UK, Canada & EU Well on Track’
He called for the trade pact to be fair, equitable and balanced and called for it to be a “win-win for both sides”. He asserted that there is “no deal, unless both are satisfied,” and said the FTAs with UK, Canada and EU are well on track.
“So we will have to wait and watch. But I would believe that our FTAs with the UK, Canada, EU, one or two more we may announce soon, all that is well on track,” Goyal said.
The commerce minister, however, admitted that the USD 2 trillion exports target for goods and services by 2027 “looks challenging” and said it is likely that it can be achieved by 2030.
Citing issues regarding Covid-19, Ukraine conflict and the economic fallout causing inflation, energy crisis and supply disruptions, Goyal said, “If the situation becomes favourable to India and if the industry exert a lot of effort, I will be the happiest person if we can do it by 2027 but sadly we have lost the time during Covid and are losing the momentum because of the conflict between Ukraine and Russia, which has caused so many economic stresses worldwide — inflation, supply chain disruptions, energy issues.”
India-UK FTA Preferably by Diwali, But Definitely This Year: Truss
Truss had described India as a “big, major opportunity” and said the UK and India are “in a sweet spot of the trade dynamics that are building up.” “We are looking at a comprehensive trade agreement that covers everything, from financial services to legal services to digital and data, as well as goods and agriculture. We think there is strong possibility for us to get an early agreement, where we lower tariffs on both sides and start to see more goods flowing between our two countries,” she said soon after signing the ETP.
During her campaign run for the top post in Britain, Truss had said that she was committed herself to getting the India-UK FTA done, preferably by Diwali the deadline set by predecessor Boris Johnson but “definitely by the end of the year.”
Former PM Boris Johnson during his two-day visit to India in April told his Indian counterpart, Narendra Modi, of setting an ambitious target to sign the free trade agreement by Diwali.
Truss had raised demands for the need for enhanced defence and security cooperation with the Indo-Pacific region in order to meet her “network of liberty” goals as a counter-balance to the aggression of Russia and China. She also promised to ensure the UK’s visa regime continues to attract the “best and brightest” from India.
Migrants Remark Controversy
Former UK home secretary Suella Braverman kicked up a storm last week after her comments criticising migrants led to ministers raising concerns that the flagship trade deal with India was on the “verge of collapse”. The home secretary had said the “largest group of people who overstay are Indian migrants”. She had said she had “reservations” about the trade deal as she felt it will increase migration to the UK, and that Indians represented the largest group of visa overstayers.
In a bid to control the damage, Truss had said Britain still wanted to agree to a free trade deal with India by Diwali. The British prime minister’s spokesperson confirmed the statement later and said, “Yes, we are working on this high ambition free trade deal that would put the UK at the front of the queue to supply India’s growing middle class.”
The remarks by Indian-origin interior minister, who quit on Wednesday citing concerns over the direction of Prime Minister Truss’s government, left many minister and officials shocked leading experts to note that the India-UK “relationship has taken a step back” as a result of the remarks and if Truss wanted to save the deal, she must “disassociate” herself from Braverman’s remarks.
India and Britain launched negotiations in January this year for a pact that aims to double bilateral trade to $100 billion by 2030.
(With inputs from PTI, Reuters)