New Delhi: With 14 of the 26 chapters in the India-UK free trade agreement (FTA) already finalised, the next round of talks will focus on three chapters and especially the prospect of a bilateral investment treaty, according to Kevin McCole, managing director of the UK India Business Council (UKIBC) — a non-profit body that works with governments and firms to promote trade and business ties between the two countries.
In an exclusive interview with ThePrint Monday, McCole said, “[UK investors] will be considering what protection they have in India as investors or what legal recourse is there? If there’s no bilateral investment treaty, then that becomes a factor in the decision-making that happens at the board level.”
He argued that it would also be in India’s interest to put such a treaty in place.
The India-UK FTA, for which five rounds of talks have taken place, was earlier slated to be concluded by Diwali this year. Reports indicate that the Indian government is now looking to finalise the agreement by March 2023.
Without confirming whether the UK is following this new timeline, McCole said London “would not want to compromise quality for speed”.
Also Read: How India-Australia FTA is set to boost trade that’s already at a record high
‘Sunak-Modi relationship at nascent stage’
McCole has previously written about the importance of former UK PM Boris Johnson and Prime Minister Narendra Modi being “long-standing friends”. He was asked how this compares to Modi’s relationship with the current UK prime minister, Rishi Sunak.
“There was a real chemistry between Mr Modi and Mr Johnson which would have played an important role in the end-game,” said McCole.
“The personal relationship (between Modi and Sunak) is at a nascent stage but the relationship between the two countries isn’t. There’s also the 2030 roadmap that both governments remain committed to,” he said, adding that Sunak’s “family background” helps in understanding a country and economy like India.
The 2030 Roadmap for India-UK future relations — for which the FTA will be a major step — was adopted by Modi and Johnson in May 2021. It’s a broad-based vision that aims to re-energise trade between the countries, as well as boost investment, technological collaboration, defence cooperation and more.
Now, with the UK political leadership “settled and in a position to engage with the sharp bit of the political negotiation”, McCole said that we can expect to see ministers and politicians on both sides start to make the “compromises” needed to strike a free trade deal.
Also Read: India, Gulf Cooperation Council to resume free trade talks covering food, energy security
Benefits for Indian textiles
According to McCole, Indian textiles, pharmaceuticals, food and drink, leather products, and handicrafts could stand to benefit from an FTA with the UK.
If Indian textiles entering the UK get zero duty — down from the current 9.6 per cent — it could help in competing against countries like Bangladesh and Pakistan, he added.
Siddhartha Rajagopal, executive director of India’s Cotton Textiles Export Promotion Council (Texprocil), told ThePrint that Indian textiles entering the UK are currently playing “catch-up” with other competitors.
“If Indian textiles get zero duty in the UK, it wouldn’t just be a boon but a necessity. Currently, textiles from Pakistan, Bangladesh and other countries are at zero duty in the UK so in a sense, we are playing catch-up,” he said.
Indian pharma exports, IP provisions controversy
In the India-UAE Comprehensive Economic Partnership Agreement (CEPA), implemented earlier this year, the UAE agreed to facilitate regulatory approval for Indian pharmaceuticals within 90 days, specifically those approved in developed countries like the US, EU and Canada.
Asked if the UK is also willing to fast-track regulatory approval for Indian pharmaceuticals, McCole said, “I understand that some Indian pharma businesses have got FDA approval from the US but don’t have approval from the UK regulators so they are looking for an improvement on that side. The Indian industry has asked for that to be on the negotiating table but I don’t know where discussions on this currently stand.”
He added that it’s a significant ask, given that a quarter of the medicines that the British National Health Service buys come from India.
“That’s a pretty good market share already,” he remarked.
Intellectual property is one aspect of the FTA that has come under scrutiny. On 2 November, after a draft of the FTA document was leaked, international NGO Doctors Without Borders criticised the IP chapter, calling the provisions “harmful” and expressing fears that it could hurt the global supply of generic medicines.
When asked about this, McCole said, “I don’t think the document that was leaked was where the negotiations currently are.”
“The Government of India said they didn’t recognise that document. I don’t know where the leak came from and I don’t know who benefits from it,” he added.
(Edited by Theres Sudeep)
Also Read: Mean or nice? It’s time for India to decide what kind of economic policy it wants to follow