New trade secretary Kemi Badenoch has warned that any UK-India trade deal is unlikely to vastly increase access to the Indian market for City services firms.
Badenoch today confirmed she was sticking to Boris Johnson’s deadline of striking a deal with India by Diwali, 24 October, but watered down expectations about how comprehensive it will be.
India has a very protectionist stance when it comes to overseas services firms, with foreign lawyers unable to operate in the Commonwealth country.
Closing a deal with India, the world’s sixth largest economy, is seen as a major prize for the UK post-Brexit, however Prime Minister Narendra Modi has not made trade agreements a priority during his eight-year reign.
However, there are indications he is now willing to increase bilateral trade after signing a relatively minor trade and economic co-operation deal with Australia.
City A.M. reported earlier this year that there were concerns within the Department of International Trade (DIT) that the short deadline for the trade deal will lead to a thin deal.
Speaking at a fringe event at Tory party conference today, Badenoch said: “Doing a trade deal is not a simple and easy thing. What we want to do is something that benefits both countries.
“It may not be everything the services sectors want. We’re not doing a unilateral or free-for-all deal. But just because we have a free trade agreement, doesn’t mean we can’t do even more later.”
Other priorities for the UK in negotiations include trying to get India to drop its 150 per cent tariffs on Scotch whisky and other trade barriers on goods like British-made machinery.
India will likely want greater access to visas for any concessions on tariff reductions and services liberalisation – something that the Home Office has ruled out.
Former CBI President, and founder of Cobra beer, Lord Karan Bilimoria today called for the UK to also forge closer security ties with India.
“Trade and security go hand-in-hand,” he said.
“We have the Quad in the Indo-Pacific between the US, Japan, Australia and India. I suggested last year … we should have Quad-plus, with the UK being a member of the Quad and then we encircle the whole world.”