With the European Union and the UK having concluded a post-Brexit trade pact, India should now aggressively pursue free trade agreements (FTAs) separately with both regions, according to experts.
While it is premature to assess the gains for India from the deal between the European Union (EU) and the UK, Indian goods would not greatly benefit from this deal, they said.
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However, India can explore opportunities in service sectors such as IT, architecture, research and development and engineering in both markets as the EU-UK deal does not cover services, they added.
“There is not much profit for Indian products, but we can make money in the services sector in both the UK and the EU market. We will make more money in the UK market as we are an English-speaking country.” said the director of the Federation of Indian Export Organizations (FIEO) General Ajay Sahai said.
He said there are no specific customs duty benefits for domestic goods from this agreement.
“We should now pursue FTA negotiations with both the EU and the UK. Indian competitors such as Vietnam have a greater advantage in sectors such as clothing and maritime goods,” Sahai said.
Sharing similar views, Biswajit Dhar, a professor of economics at Jawaharlal Nehru University, said India had a lot of contentious issues during FTA negotiations with the EU. However, after Brexit, the UK may have a different stance on these issues and now “India should resume FTA talks with both regions”.
He added that the possibility exists of concluding a favorable free trade pact with the UK.
FIEO President Sharad Kumar Saraf said India should now move “aggressively” in initiating FTA negotiations with both the EU and the UK.
“We have asked the government to sign a MoU (Memorandum of Understanding) regarding the deadline for concluding FTA talks with Britain during British Prime Minister Boris Johnson’s visit to India next month,” Saraf said.
Rakesh Mohan Joshi, a professor at the Indian Institute of Foreign Trade (IIFT), said that after the trade deal with the EU and the UK, India will have a better opportunity to meet the demands of both markets.
“But India has to plan accordingly,” he added.
The Chairman of the Apparel Export Promotion Council (AEPC) A Sakthivel said the FTA between India and the UK would help remove the customs duty drawbacks faced by domestic players in Britain.
Britain struck a historic deal with the European Union on Thursday, as both sides managed to conclude a post-Brexit free trade deal just days before the December 31 deadline.
Bilateral trade between India and the UK dropped to $ 15.5 billion in 2019-20 from $ 16.9 billion in 2018-19.
This story was published by a branch agency with no text changes.