Indian negotiators are in the driver's seat for signing the India-UK free trade agreement (FTA), according to Lord Meghnad Desai, a well-known British economist who recently left the UK's opposition Labour Party.
"We have to have bilateral trade with the UK because it foolishly walked out of the EU. It's not India's problem. It's a UK problem. Basically, India is in the driving seat. India is going to be the UK's solution. UK is not going to be India's solution," said Desai, who is Emeritus Professor of Economics at the London School of Economics and Political Science.
"You have to look at the UK-India FTA that way. We have more or less equal total GDP size, but we have got highly skilled labour which they [UK] want, and a huge market," the Padma Bhushan awardee told Business Today in an exclusive interview. The full interview will be out in BT's next issue.
Desai's remarks on the FTA comes in the midst of a growing controversy following the reservations on the question of immigration and open borders which were publicly expressed by the UK Home Secretary Suella Braverman. Just last week, Braverman, in an interview, expressed her fears that the FTA in its present form would lead to immigration of Indians to the UK, especially when the former already represented the largest group of visa overstayers in the UK.
Following Braverman's remarks, several reports appeared in the foreign press which suggested that it had not gone down well with India, with many Indian ministers reportedly being 'livid' over Braverman's remarks. The FTA negotiations, which was in many ways served as a keystone of former UK prime minister Boris Johnson's foreign policy, was supposed to conclude by Diwali this year, with India's prime minister, Narendra Modi's purported visit to London. Now, it seems, that visit and the deal is in considerable jeopardy.
In July, India and the UK had completed the fifth round of FTA negotiations.
The government, at that time, disclosed that "the technical experts from both sides came together for detailed draft treaty discussions in 85 separate sessions covering 15 policy areas," In fact, the government had also said that "Indian and UK officials will continue to work intensively throughout the summer towards a target to conclude the majority of talks on a comprehensive and balanced FTA by the end of October 2022."
"Indian skilled labour is very highly rated and India has enough of that. India can export and be all right. So, let us make sure that India gets the benefit to the maximum as a winning country, which can help the UK," said Desai, while adding jokingly: "we can play cricket better than they can. They cannot export cricket."
Currently, India's exports to the UK have grown from 7 per cent a decade ago to a little over 10 per cent of the total exports in terms of value. In the same period, India's imports increased from 5 per cent to 7 per cent.
The current FTA is targeted at doubling bilateral trade between India and the UK by 2030, with the government expressing hopes that the FTA with the UK would boost India's exports of textiles, leather, jewellery, and more.
Desai, who holds a Masters’s Degree from the University of Mumbai and is a PHD holder from the University of Pennsylvania, also highlighted areas where the UK excels at.
“The UK is very good at research, especially university research and development. Places like Imperial or Cambridge have made the education departments like corporations. If you are a researcher, say in astrophysics or medicine, you are encouraged to form a corporation. And your research is your patent. And you're going to make money, and the university doesn't mind," he said.
Also read: No longer working to Diwali deadline for India trade pact, says UK trade minister
Also read: How Suella Braverman has put India-UK free trade deal on the verge of collapse
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