The UK-India FTA negotiators are certainly working at pace. Indian Commerce Minister Piyush Goyal and UK Secretary of State for International Trade Anne-Marie Trevelyan launched the negotiations on January 13, the first round of talks ran from January 17 to 28, and the second round starts on March 7.
This pace is important as the ministers set a broad agenda and ambitious timelines: a comprehensive deal by the end of 2022 and an interim deal in the first half of the year.
Businesses welcome both the timetable and the broad agenda, covering trade and investment in both goods and services, such as IP and customs procedures, as well as digital and telecommunications.
Businesses also welcome both governments' objective of a win-win deal. A win for Indian business and consumers, and a win for UK business and consumers.
After hearing Minister Goyal and Secretary of State Trevelyan when they launched the talks, and the continued buoyancy and optimism by both negotiating teams after round one, the goal feels achievable.
Businesses are supportive of an early harvest deal. This would lock in wins to deliver economic benefits immediately and would generate the confidence, momentum, and trust needed to overcome some of the trickier negotiating points.
Importantly though, businesses want it to be a staging post to a comprehensive deal that will enable the governments on both sides to hit their target of doubling trade to GBP 50 billion by 2030.
The governments are also ambitious, and entirely correct, in seeking an agreement that is "future-proofed". For instance, it is important to create the frameworks that allow digital services to flourish.
This deal is being negotiated in a completely different context to the pre-pandemic world, with hundreds of millions of people around the world working from home for much of the last two years.
Services like education, healthcare, retail, mobility and banking are increasingly delivered on digital platforms. Traditional ways of thinking are not all going to be relevant in the future.
So having an FTA that allows the businesses of tomorrow to flourish has got to be the right approach, particularly as both countries already excel in the IP-rich, digital-driven services.
Given this irreversible trend, it will be increasingly important that data can move freely and safely between the UK and India.
Likewise, a rigorous and aligned IP environment will help to give investors the confidence to establish and develop new technologies in both countries.
Investor confidence, across all sectors, will accelerate and expand job creation in India. The recent amendment to the retrospective tax Bill by the government was a positive step.
If both governments go further, and successfully negotiate an Investment Chapter, it would help to spur two-way investment flows.
UK companies understand and back Prime Minister Narendra Modi's self-reliant India mission. So, if the FTA increases investor protections and makes it easier and cheaper for companies to import goods and services from the UK, we will see increased investment in India, the creation of many thousands more jobs, and ever-more world-leading technology being transferred to and created in India.
As well as being ambitious, the governments are being commendably realistic.
There is recognition that there will be sensitive issues, and as Goyal indicated in his press conference in January, neither party will push the other too hard in these areas. Difficulties in agreeing on any points should not become deal breakers.
For instance, there is a misplaced narrative that visas and labour mobility could derail the negotiations. These negotiations are about so much more.
It was therefore encouraging to hear Goyal downplay visas as a major issue when he and Trevelyan were asked about it at their press conference. The Minister's response felt correct because issues related to the movement of talent from India to the UK have considerably diminished in recent years.
In 2020 the UK opened a new post-graduation route allowing Indian students to live and work in the UK for two years after graduation; the cap on the number of skilled worker visas issued each year was removed, and the minimum salary requirement was greatly reduced.
Additionally, the governments announced a special Young Professionals scheme last year to allow young Indian and British professionals to work and live in each other's country for two years.
This is the first time the UK has created such a scheme. It is also worth saying that Indian nationals currently receive more than 40 per cent of all UK skilled work visas - almost as much as the rest of the world combined.
It is therefore right that the negotiators look at other issues. Forward-looking issues that will open up the opportunities of the future - such as digital-driven services.
Issues that benefit consumers, such as greater alignment of food and drink standards and the reduction of tariffs to reduce prices.
And issues that give investors - the job creators - greater protection and incentives to expand their operations across India and the UK.
I get a strong sense that both governments want to focus on the tremendous opportunities that exist. On where there is complementarity, on the win-wins.
Business is very much on the same page and will continue to play an intimate supporting role to ensure this is achieved.
India and the UK are already close partners. Successful FTA negotiations will bind the two countries even closer.
(The author is Executive Chair, UK India Business Council.)
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today