On Friday, April 22, India and the UK added a strong value proposition to the comprehensive strategic partnership between the two countries with the establishment of a strategic technology dialogue aimed at supporting start-ups and the MSME sector in India in exploring new markets and globalization of innovations as well as UK support for a ‘self-reliant India’ in all areas of manufacturing, technology, design and development in the sector of the defense.
These new layers of engagement signal the intensification of bilateral engagements since the virtual summit that both sides welcomed during delegation-level talks between Prime Minister Narendra Modi and his British counterpart Boris Johnson on April 22, 2022.
Prime Minister Johnson’s visit in an important year as India commemorates the seventy-fifth anniversary of its independence and the two countries celebrate 75 years of bilateral relations, while historic in itself, is also a timely extensive reforms underway. in India, the infrastructure modernization plan and the National Infrastructure Pipeline as well as the increased investment in India by British companies and the positive contribution of the 1.6 million people of Indian origin living in the United Kingdom to all sectors of society and the economy that paved the way for a stronger mutual intention to deepen the strategic partnership.
According to UK Department for International Trade statistics released on April 14, 2022, total trade in goods and services (exports plus imports) between the UK and India was £21.5 billion over the past four quarters to the end of Q3 2021, an increase of 8.7% or £1.7 billion between the four quarters and the end of Q3 2020.
According to a 2020 CII-Grant Thornton report, there are 850 Indian companies operating in the UK, with combined revenues of almost £41.2 billion. The UK is the sixth largest foreign investor in India with a cumulative equity investment of $28.39 billion (April 2000 – June 2020), which accounts for about 6% of all FDI in India.
Building on this chemistry in a significant way, the intention of both parties is to target the conclusion of the majority of talks on a comprehensive and balanced free trade agreement by the end of October 2022, according to the joint statement released by the Department of External Affairs.
The FTA, whose negotiations were launched in January 2022 in New Delhi, has seen progress in two rounds of talks so far and is expected to make further progress in the third round of meetings next week between the negotiating teams.
An FTA between the world’s fifth and sixth largest economies is expected to boost economic growth, create new jobs in both countries and double bilateral trade by 2030. the United Arab Emirates and Australia recently, the strong resilience of the economies of India and the UK and the positive growth in bilateral trade showing the potential to double trade by 2030, as envisioned in the 2030 Roadmap.
However, a prompt resolution of all outstanding market access issues in a balanced manner – as both sides voted for – is necessary for the deal to go through. Both sides look forward to finalizing the mutual recognition of qualifications and a framework for nurses and continuing cooperation in outstanding areas related to social security schemes and legal services which will be essential for building the trade framework. services under the FTA. .
What would complement the FTA is the common goal of deepening India-UK cooperation in the World Trade Organization on mutual objectives and sustained engagement through the India-UK multilateral trade dialogue and other mechanisms.
A solid basis for an investment agreement in the FTA is offered by the growing investment flows between the two nations. According to industry sources, the increase in investment flows between the two countries, the progress made under the eleventh Economic and Financial Dialogue (EFD) and the intention to strengthen cooperation through the EFD, including by stepping up cooperation in the financial services, banking, insurance, fintech, green bonds, sustainable finance and capital markets sectors and promoting collaboration between regulators and stakeholders.
The JCB plant at Mhaswad Industrial Estate in Vadodara is one of the UK’s most recent investments in India and is considered a huge investment in earthmoving equipment with huge export potential. Prime Minister Johnson has hinted that he will produce a number of units which could also be exported to 110 countries.
The conclusion of the Global Innovation Partnership Implementation Agreements under which India and the UK will co-fund up to $100 million for the transfer and scale-up of “Made in India” innovations to third countries adds substance to India’s ties with the UK.
The India-UK GIP in the area of trilateral development cooperation is an important initiative that will further strengthen the India-UK bilateral development partnership with other countries. Under this framework, India and the UK will co-fund up to $100 million over 14 years to support the transfer and scale-up of inclusive climate-smart innovations from India to third countries. from Asia, Africa and the Indo-Pacific, accelerate the delivery of development goals and combat climate change in accordance with the resolutions taken at COP-26 held in Glasgow.
The UK has also committed $1 billion through British International Investment – its development finance institution – to climate-related projects in India over the period 2022-2026.
Following the success of the India-UK Green Growth Equity Fund anchored by the National Investment and Infrastructure Fund of India and the UK Foreign Commonwealth and Development Office in raising an additional $425 million to support green infrastructure projects in India, India and the UK will build on 10 years of successful collaboration in development capital investment partnerships between India and the UK.
Modi also welcomed the UK’s guarantee for a $1 billion loan from the World Bank to help India develop green infrastructure and invited the UK to be part of the Green Hydrogen Mission.
India and the UK are also well placed to transform defense and security cooperation into a key pillar of the strategic partnership towards the creation of a free, open and secure Indo-Pacific, as well as to support the India’s self-reliance mission.
With Modi and Johnson noting the importance of strong defense industrial collaboration for the manufacture of equipment, systems, spare parts, components, aggregates and other related products and key capabilities as part of of the Make-in-India program, the doors have been opened wider for co-development, indigenization, technology transfer and the creation of joint ventures to meet India’s defense needs.
The UK’s announcement of an “open general export licence” to facilitate technology engagement with India, the open opportunity for India to participate in the UK’s shipbuilding and aircraft programs United and the agreement to work bilaterally and with key partner countries to facilitate access to the highest level of technology to Indian industry are important steps in recognizing India’s interests.
Going forward, the two countries will continue, as mandated by the two leaders, to identify high-impact projects for time-bound implementation in each of the pillars of the roadmap and to steer bilateral relations towards a vision 2047 for shared security and prosperity. of their people and the planet.
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