The UK and India will launch a formal free trade deal later this year, with the UK government on Tuesday agreeing a preliminary package to boost bilateral trade and investment.
With its huge population and growing economy, India has been ranked high on the London trade agreement target list since Britain left the European Union last year.
Under the Brexit “Global Britain” strategy, Prime Minister Boris Johnson’s government is advancing its foreign policy priorities for the Asia-Pacific region, signing trade deals with countries including Japan and Singapore.
UK International Trade Secretary Liz Truss said India and the UK would begin negotiating an agreement “in the autumn” after the announcement of an initial “enhancement trade partnership” deal.
“We want to complete these negotiations as soon as possible,” he told Sky News during a round of broadcast interviews about a partnership package of 1 billion ($ 1.4 billion, 1.2 billion euros).
“Of course, the FTA (Free Trade Agreement) takes longer, it is the immediate benefit we can get for both countries, driving jobs here in the UK and India,” Truss said.
He added that the two countries were looking for an “early win” from the FTA to reduce trade barriers, noting that the UK wants to reduce or remove tariffs on India’s various exports from car to whiskey.
The comments come ahead of a virtual dialogue between Boris Johnson and Prime Minister Narendra Modi later on Tuesday.
Johnson postponed his official visit to India for the second time last month due to worsening coronovirus conditions.
The announcement of a partnership with India includes lower trade barriers for some of the UK’s exports, such as fruits and medical devices.
It also includes an investment in the UK by the vaccine manufacturer Serum Institute of India, which could eventually see more vaccination done in the UK.
Johnson’s office said it expects that there will be pre-negotiations with the FTA to create more than 6,500 jobs.
But there are indications that India may be reluctant to sign more comprehensive trade agreements, as PM Modi leads the “Made in India” and “Self-Reliant India” agendas.
Last year, PM Modi abruptly stopped joining the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between 15 Asia-Pacific nations, as New Delhi feared its agriculture, dairy and service sectors.
Former US President Donald Trump disliked India as a “tariff king” for his trade relations on imported goods despite his friendly relations with PM Modi.
Negotiations between India and the European Union on the Free Trade Agreement are due to resume later this month, eight years after 16 rounds of talks at the deadlock.
Trade talks are also scheduled to resume with Canada after a four-year hiatus.