India, UK look for possibility of FTA after Brexit

India, UK look for possibility of FTA after Brexit

India said a formal discussion on possibility of a trade pact can only start post-Brexit.

The Dollar Business Bureau

With Britain formally leaving the 27-nation trading bloc of European Union (EU), India and UK may look for a possibility of a free trade agreement (FTA).

The FTA’s possibility came up during talks between Arun Jaitley, India’s Finance Minister and Philip Hammond, UK Chancellor of the Exchequer at the 9th UK-India Economic and Financial Dialogue wherein the UK pitched for enhanced trade ties with India.

India said that a formal discussion on the possibility of a bilateral trade pact can only start after concluding of the Brexit, which is likely to take around two years.

Last month, the UK Parliament cleared the Brexit Bill, which paved the way for Britain exiting the EU.

Jaitley said India has stated in its communication to the British government that after the Brexit it will see for more open trade and trade pacts.

“Obviously this can be formally discussed after Brexit takes place but it is probably going to imply a far wider and a far higher engagement between the two countries. What shape it is going to take can only be formalised post-Brexit negotiation,” Jaitley conveyed to the journalists.

Hammond said that the two countries have a considerable trade and investment ties and the UK is the biggest G-20 investor in India in the past 10 years, whereas India is the third biggest investor in the UK.

“We have continued to consolidate past success and to identify new areas where we can work together over the next couple of years, preparing for the point where Britain leaves the EU and is able to engage with Indian colleagues in a deep discussion about a future FTA between the UK and India,” he said.

The UK is one of the key trading partners of India. In fiscal 2014-15, UK was 18th among the major 25 trading partners of India.

According to the data of Department of Commerce, the bilateral merchandise trade between the two nations during the fiscal 2014-15 was $14.33 billion, witnessing a decline of 9.39% as compared to the previous fiscal.