India-UK FTA provides stability, predictability to business: Piyush Goyal in London

London: Commerce and Industry Minister Piyush Goyal on Wednesday highlighted the “stability and predictability” that the recently concluded India-UK Free Trade Agreement (FTA) brings for businesses in both countries.

During a session at the India Global Forum (IGF) UK-India Week titled ‘Agreement to Action in the UK-India FTA’ in London, the minister shared his optimism around the “good marriage” agreed between both countries which will lead to bilateral trade doubling in five years.

As the legal text of the FTA is finalised before a formal sign off, he said the focus until then was to “build business to business connects” and help people understand the “nuances and benefits that this deal can offer them”.

“A Free Trade Agreement brings stability and predictability to the relationship between two countries,” said Goyal.

“That gives confidence to business to start investing in each other's economy and I think this will also pave the way for greater investments in the two economies, add to our trade in goods and services… India and UK can partner in innovation to work together to bring more resilient supply chains, working with each other, complementing each other and adding value and profits to both countries,” he said.

The minister arrived in London earlier on Wednesday for bilateral talks with his UK counterpart Jonathan Reynolds on the next steps in the finalisation and implementation of the FTA.

In their first joint public intervention since the FTA negotiations concluded last month, Reynolds said he was “genuinely excited” about the prospects opened up with the FTA.

“I believe that India is one of the most exciting countries in the world, and actually one of the most important; with the problems we face globally, I can't see any way to fix those without India playing a leading role,” said Reynolds.

The UK Secretary of State recalled how the FTA was finally agreed between him and Goyal early in May during a walk around the Serpentine lake in Hyde Park in London, which the Commerce and Industry minister revealed as one of his favourite spots in the UK capital.

“We did the final bits of this on a little bit of paper, which I quite grandiosely called the Serpentine Accord… only one lap around the Serpentine was all we needed,” he shared, on a light-hearted note.

The personal rapport between the two ministers was apparent, as they reflected on the complementarities between the two economies and also addressed some misconceptions around the Double Contribution Convention (DCC) agreed as part of the FTA to prevent temporary foreign workers duplicating social security contributions in both countries.

“This is a business mobility provision which the UK has with every country in the world,” said Reynolds, addressing Opposition Conservative Party objections that it offered a "tax relief" to India.

Goyal highlighted how this provision had been a “non-negotiable” aspect of the FTA negotiations for almost three years when the talks began under the previous Tory government in January 2022.

He said: “This was made a non-negotiable part of our discussions to bring balance and equity to a trade deal between two economies.

“Therefore, I think it's very unfair to call this as a giveaway, or any of that. Secondly, these are people who are adding value to the UK economy when they come here… in all fairness, such temporary people who come to add value to the UK economy should not be made to pay double tax, or social security costs in India and in the UK.” As detailed by Reynolds in the House of Commons last week, the trade deal is estimated to increase bilateral trade in the long run by GBP 25.5 billion every year – from the current annual estimate of GBP 41 billion – as tariffs are slashed across key sectors on both sides.

“This trade agreement is a huge economic win for the UK — the biggest trade deal since Brexit and the best deal that India has ever offered,” Reynolds told Parliament.

On the Indian side, the Ministry of Commerce and Industry highlighted significant positive gains for employment in the country, offering a substantial improvement in the competitiveness of Indian goods in the UK vis-a-vis other countries as well as easing mobility for professionals.

The FTA, announced on May 6 with a target to double trade between the two economies to USD 120 billion by 2030, is now undergoing a process of legal text formalisation before it can come into force.

“Both leaders will review the progress made in the ongoing FTA negotiations and chart out a clear, time-bound roadmap for its finalisation and implementation," the commerce ministry said.

During his two-day UK visit, Goyal is also set to hold talks with Chancellor Rachel Reeves to discuss macroeconomic priorities, financial cooperation, and investment facilitation between the two countries. During talks with Culture Secretary Lisa Nandy, the focus will be on avenues of collaboration in creative industries and innovation-driven sectors.

The minister will be interacting with global business leaders, investors, and policy experts to deliberate on the “strategic contours of the India-UK economic corridor and the transformative impact of the proposed FTA”. He is also set to address a session on ‘UK-India Science, Technology and Innovation Collaboration’ at IGF London on Thursday.