The commitment made by the two countries, at the 14th JETCO meet, is a step in the right direction, the culmination of which could see the birth of a much-awaited Free Trade Agreement.
India and the UK have a strong partnership, characterised by extensive political engagement and deep economic cooperation. Both take a shared interest in each other's prosperity, generating jobs, developing skills, and enhancing the competitiveness of the two economies. Over the years both the countries have made efforts to enhance trade and investments between them by bilateral government to government dialogues.
Bilateral cooperation between India and the UK is guided by institutionalised dialogues of India-UK Joint Economic and Trade Committee (JETCO), Economic and Financial Dialogue (EFD), and India-UK Financial partnership.
The India-UK JETCO was established on January 13, 2005 to develop a strategic economic relationship to enhance bilateral trade and investment relations between the two countries. Under the JETCO setting, the business cooperation is promoted through the formation of focused sectoral Joint Working Groups (JWGs) on trade to discuss and resolve trade-related issues.
The conclusion of the 14th Meeting of the JETCO saw a commitment to enhanced trade partnership. The UK leaving the EU by the end of this year, coupled with the disruption caused by the Corona Virus pandemic, required heightened cooperation between the two counties. The commitment at the meeting is a step in the right direction, the route to a Free Trade Agreement.
A week before the JETCO meeting at the India Global Week, the annual flagship event of India Inc. Group, the ministers from both countries showed their willingness and eagerness to work towards a trade treaty. While addressing a session at the event Indian Minister of Commerce, Industry and Railways, Piyush Goyal said, “Free trade agreement should be our goal, but we can do a Preferential Trade Agreement (PTA) in the immediate future.” He added that, “The choice is of the UK. I am open to having my officers sit down and talk to officers in the UK morning to evening. I can give them a 15-30 day window and not to get out of that room till they finalise at least an initial early harvest before we can look at a longer-term PTA.”
Addressing the global audience virtually at India Global Week 2020, Liz Truss, Secretary of State for International Trade, UK government, said post-Brexit it is time for the UK to open up to India. "On the trade front, we are not letting the grass grow under our feet," she added. She concluded her address with a look towards the future of UK-India relations and "keeping free trade agreement opportunities open."
This had laid the foundation for the 14th JETCO meeting to be rated as one of the most successful meetings between the countries since both sides approached the meeting with open minds and committed to close cooperation for the post-Covid economic revival and revitalisation of long-standing trade and economic linkages.
Both sides have identified trade priorities through a Joint Trade Review and shortlisted life sciences and healthcare, information communications technology (ICT), food and drink, chemicals, and services as the five priority areas to address non-tariff barriers to trade during the annual dialogue.
At the meeting, the Co-Chairs of Life Science and Health, ICT, and Food and Drink working group presented a series of recommendations for better market access which would boost UK-India trade and investment in each of these sectors. These recommendations were drawn from detailed reports produced by the working groups, which consolidate feedback from a wide range of businesses from across the UK and India.
The recommendations made by the working groups were welcomed by the ministers. They further resolved to cooperate in the health sector especially given the global havoc caused by the Covid-19 pandemic. There would be enhanced engagement in research & development (R&D) in the healthcare sector. The ministers also committed towards these working groups to intensify efforts, meeting frequently; conducting monthly meetings between ministers of state, and a high-level meeting this autumn in New Delhi.
At a time when India opted out of the Regional Comprehensive Economic Partnership (RCEP) deal and is all set for a comprehensive reset of its existing free trade agreements, it is interesting to see its commitment to an Early Harvest trade deal with the UK.