Briefings UK-India FTA consultation response
UK-India FTA consultation response
This document sets out TJM's response to the UK Department for International Trade's consultation on a future UK-India Free Trade Agreement.
The UK and India are both undergoing periods of political change. Brexit means that the UK is adopting an independent trade policy for the first time in fifty years, and deliberately prioritising FTAs with new partners. The UK Government’s Integrated Review of foreign and defence policy has encouraged a pivot towards the Indo-Pacific region. A UK-India FTA therefore has a substantial geopolitical dimension and should not be understood as a purely economic gesture. The UK Government has also as yet, not clearly articulated its trade strategy, which makes judging the relative merits of any particular FTA challenging.
Meanwhile, India is undergoing its Atmanirbhar Bharat campaign, led by Prime Minister Modi’s Government, which can broadly be understood as a campaign for self-sufficiency and localism. The campaign has led to various reforms to support local industry and at times restrict foreign competition. At the same time, India has been rocked by farmers’ protests this year, following reforms to the collective bargaining system for agricultural produce. These examples indicate that India’s economic and trade policy will be driven by domestic politics, and that drastic changes to the system will sometimes be met with strong local opposition.
This context means that launching a UK-India trade agreement at this moment could prove to be poor timing: while the UK’s priority is the rapid signature of a large number of FTAs, India is undergoing a more domestic-focused economic campaign.
There are numerous hurdles to a UK-India FTA, as shown by the failed EU-India talks. Many of the issues, explored later in this response, will resurface in UK-India negotiations. Likewise, many of the concerns raised about the EU-India trade deal, related to sustainable development and the impact of the deal on India’s domestic economy, also apply to the UK-India context.
Issues that the UK must address in the context of negotiations with India include:
- Environmental and climate impacts
- Implications for sustainable development goals
- A proper process for public and parliamentary engagement with negotiations
- The potential gendered impacts of the deal, particularly in areas such as access to finance and public services
- Potential negative impacts for India's agricultural sector
- Potential negative impacts for India's small retailers
- Impacts for India's generic medicines industry that could drive up costs in India and in many other countries
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