Resolving the issue of workers mobility would be “key” to a post-Brexit free trade agreement, said YK Sinha, High Commissioner to the UK.
Speaking at an event on opportunities for post-Brexit collaboration between the two countries, he said that while negotiating a bilateral trade agreement would potentially be easier than one with an entire bloc, for India it was essential to ensure that its professionals particularly in the financial services sector and the IT services sector were able to visit and return freely.
“For India mobility is key,” he said. “The EU and India have been negotiating a free trade agreement since 1997, but we didn’t make headway for various reasons,” he said.
“When you are negotiating with a large grouping there are other interests you have to keep in mind however when you are negotiating a bilateral deal, it makes it easier,” he said pointing to a joint working group that had been set up last year, which he said could act as a “fulcrum” for the FTA when formal discussions begin once Brexit is completed.
Enabling free movement of workers would benefit both Britain and India, he said.
“They contribute immensely to the economy they live in and when they go back they contribute immensely to India.”
The event organised by FICCI and the University of East Anglia is a latest in a number of discussions taking place around the potential for the relationship. Britain is eager to negotiate a free trade agreement with India. During a visit to India last November, UK Prime Minister Theresa May stressed her eagerness to secure such a deal.
“We are confronted with an uncertain situation,” Sinha said, “Whatever scenario emerges we need to be prepared and it’s important for us to see how we can leverage the situation to our advantage. Of course trade is good but we haven’t tapped its potential,” he said.
He pointed to a Commonwealth study published last year that estimated a 25 per cent boost to UK-India trade should a post-Brexit FTA be implemented.
While bilateral trade could see a boost, in the short term, the Brexit uncertainty was likely to hit Indian investment into the UK, said Didar Singh, Secretary-General of FICCI.
While Britain had been India’s main investment partner in Europe, that was when Britain was “part of a larger market. The uncertainty will cause a blip in the entire investment scenario… We have to understand that reality,” he said. “I look to see where the markets are… I look to see where the profitability is.”
Security issuesWith uncertainty hovering over the economic partnership, security and defense cooperation has the potential for becoming the dominant aspect of the bilateral relationship, said Rahul Roy-Chaudhury, head of the South Asia programme at the International Institute for Strategic Studies.
He noted that cooperation in this area had increased in recent years, with counter terrorism initiatives helping prevent terror attacks in India, and joint efforts to disrupt the financial and tactical support to the Lashkar-e-Taiba, and the signing of a civil nuclear cooperation agreement.
That strategic relationship could be strengthened greatly, he said, if Britain made public commitments on sharing cutting-edge military technology that Britain shared with top partners, and if there were more “actionable” exchanges of intelligence on money laundering, terrorist financing and other crimes.
Strengthening this could help Britain return to be one of India’s top five strategic partners, said Roy-Chaudhury, pointing to the US, Russia, France, Japan, Israel, Australia and the UAE as being the current top strategic partners.