India is a huge – but elusive – trade prize for Boris Johnson

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21.04.2022 - 15:51

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theguardian.com:

Of all the deals that Boris Johnson could sign with countries outside the EU to lift UK trade, one with India is the among the biggest prizes.

After landing in the country on Thursday morning, the prime minister must be hoping his two-day trip – taking in his Indian counterpart Narendra Modi’s home state of Gujurat and then New Delhi – will add impetus to talks already under way to reach a free trade agreement (FTA) between the two countries.

India is a small dot on the imports and exports graph at the moment. It is the UK’s 15th-largest trading partner, according to figures covering the year to the end of last September, and accounts for just 1.7% of total UK trade.

An FTA can take many forms, but would usually lift most tariffs on goods and services exports between the nations and provide a pathway to harmonising rules and regulations that can slow or prevent cross-border transactions.

At the moment the UK suffers from a negative trade balance for both goods and services. The chart showing the longer-term trend points to the slide in trade that Johnson needs to reverse.

In the years before the pandemic, between 2010 and 2019, the UK’s exports to India dropped by 3%. This contrasts with the many countries that made huge inroads over that time, including the US, which increased exports by 79%, Canada (62%) and France (58%).

“We are the only country of the G7 to actually see a decline in exports to one of the world’s largest and fastest growing economies,” says Gareth Thomas, a shadow trade minister. He argues that it is not enough to “buy the story” of the possibilities on offer to UK businesses from a nation of 1.4 billion people and a growing number of middle-class consumers.

“The government continues to hope that a few warm