Pawan Budhwar reflects on an event that took place in November 2018 where the Industry and Parliament Trust, in partnership with Aston University, Birmingham, hosted a Breakfast Meeting to consider “Global Britain: Accelerating UK-India Trade”. The meeting was held at the House of Commons and was chaired by Seema Malhotra, MP, Select Committee of House of Commons Exiting the European Union and sits on the Speakers Committee on Representation and Inclusion.
The discussion was attended by members from both the House of Commons and House of Lords, alongside representatives from a wide variety of sectors from business, industry and academia.
Despite the historical links between the United Kingdom and India, the level of trade has not reached its potential. A working group at the 11th meeting of JETCO – Joint Economic Trade Committee, a formal body was established in January 2005 which regularly reviews trade related matters between the two countries– met in 2016 identified and fast tracked the areas of life sciences, information & communication and food & drinks.
These were further modified during the 12th meeting to smart cities, tech and advanced manufacturing and engineering.
The 13th meeting of JETCO was cancelled due to a Brexit vote. A number of key bodies on both sides are facilitating trade. These include the FICCI, CII, UKIBC, CBI, and the DIT.
At present 800 Indian firms operate in the UK employing 105,000 with a revenue of £46.4 bn.
270 British firms operate in India, with UK being the 4th largest inward investor in India contributing to 7% of India Foreign Direct Investment (FDI).
The present government of India has pursued a number of major initiatives such as a uniform goods and services tax (GST) across the country, Insolvency and Bankruptcy Code (IBC, 2016). India’s ranking on ‘Ease of Doing Business’ in 2019 has come down to 77th (an improvement of 65 places in four years).
There are a number of other new and on-going initiatives between the two countries such as Newton-Bhaba, UKIERI, launch of Masala Bonds, smart-cities working group, advanced manufacturing & engineering working group, trade working group and the Manchester-India partnership supported by the Confederation of Indian Industry (CII). Also, the government of India launched the ‘Access India Programme’ (supported by UKIBC) in 2017, which offers workshops and input related to legal, financial, mentoring, and introductions.
Successful examples include those of Bharat Forge’s £10mn order to Tevva Motors, collaboration between Bharat Forge and MIRA Technology at Nuneaton, creation of key hubs such as Midlands-Maharastra (Pune) for infrastructure, automotive, and smart city; and the Karanatka – Northern Powerhouse for AI (Tech-UK) & Fin-tech.
Concerns and way forward
India needs manufacturing related trade and UK manufacturing is expensive for exports to India. At present, the UK Trade deals are pan-EU and parity is an issue, i.e., in food & drinks sector, EU wants more access to Indian markets. The discontinuation of post-study visa to Indian students is proving detrimental, resulting in a sharp drop in numbers. Indian skilled professionals on short visits to the UK must currently pay NI contributions without getting the benefits (e.g., there is no Totalisation Agreement – no pension and other benefits) and ending up in double taxation.
Potential avenues of growth
An ever-changing global landscape, including Brexit, means there are opportunities for the UK to set-up free trade agreements with India. Along with it, a further change in mindset if needed to realise the opportunities available on both sides. Both the outcomes of Brexit and present election in India will play a significant role in the further proactive engagement between the two countries.