Trade

India in no rush to do a trade deal with post-Brexit Britain

LONDON — India may be a top U.K. target for a free-trade deal post Brexit but the Commonwealth economic powerhouse is in no hurry.

Two weeks before a high-profile gathering of Commonwealth leaders in London, where the U.K. and Indian prime ministers are due to meet, the countrys top official in the U.K. said a bilateral trade deal between the two countries is “not going to be done overnight.”

Speaking to POLITICO at the Indian High Commission in London, Yashvardhan Sinha also voiced concern that U.K. perceptions of his country were based on pre-independence nostalgia.

Brexiteers, including U.K. Trade Secretary Liam Fox, have long argued that one of the key benefits of leaving the European Union is the opportunity for new trade deals with burgeoning Commonwealth economies such as India. They claim Britains membership of the EU customs union, which creates common external tariffs, has prevented the U.K. from trading freely with the rest of the world.

Britains International Trade Secretary Liam Fox arrives at 10 Downing Street in London on January 9, 2018 | Daniel Leal-Olivas/AFP via Getty Images

Britains future trading prospects with the Commonwealth — a voluntary association of 53 sovereign nations that has its roots in the former British empire — will be in the spotlight at the Commonwealth Heads of Government (CHOGM) meeting, which starts on April 16.

Sinha confirmed there would be bilateral discussions between U.K. Prime Minister Theresa May and Indian Prime Minister Narendra Modi ahead of the summit, but warned that while India will look for easier access to the U.K. market in some areas post Brexit, wide consultations with various stakeholders about the scope of any trade deal would need to be held before negotiations can even begin.

“I dont think India is in a rush. I think India would like certainly, and Im sure the U.K. would too … to get the best deal possible,” he said.

Sticking points

High on the Indian wish list for a trade agreement is freer movement of people, Sinha reiterated.

“I think for us it is very important that if we need to step up our engagement we need to have that easier access, the ease of travel has to be looked into,” he said.

Indian High Commissioner Yashvardhan Kumar Sinha (R) and his wife Girija (L) sit in the Royal Box on Center Court at the All England Lawn Tennis Club in Wimbledon, London, on July 7, 2017 | Glyn Kirk/AFP via Getty Images

Immigration is politically problematic for the U.K. government, which is under pressure over its failure to meet the Tory net migration target of 100,000 people annually. Concern about immigration is widely credited as one of the driving forces of the Brexit vote in 2016.

However, Sinha said a distinction has to be made for those who traveled to the U.K. for a short period and left. He said 2016 figures show the vast majority of Indians who came to the U.K. had returned home.

By contrast, a “great deal” with the EU is “very important,” given the bloc as a whole is “one of our largest trading partners,” Sinha said, pointing out that access to the EU market is “very important” for Indian business giants in the U.K. such as the Tata Group. “[Trade deals] are all important,” he said.

For Sinha, Britains push for an even closer relationship with India must go hand in hand with a greater understanding of India in the wider U.K. population.

The high commissioner said he had been surprised to find “very dated or very incomplete” knowledge of India that is based on “nostalgia, the Raj, or their connections,” rather than its economic achievements over the last seven decades.

“I dont know whether it is what is taught in schools here … what is taught about India for instance, whether it is the old Raj-based history, or whether anything at all,” he said. “As a people we are so close and there is so much interaction, so we need to do something there in terms of reaching out to the youth, to important decision-makers in the country.”

“I think the progress that India has made, the success story … is something that we need to focus [on] much more here in the U.K.,” he added.

CORRECTION: This article has been updated to make it clear India does not link negotiating an EU trade deal to any negotiations with the U.K.

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