In this handout photo taken on August 25, 2019 by the Indian Ministry of External Affairs, Indian Prime Minister Narendra Modi shakes hands with British Prime Minister Boris Johnson on the sidelines of the annual G7 summit in Biarritz, south-west France Photograph:( AFP )
Key takeaways from the UK-India trade deal signed today
India and Britain are charting out a post-Brexit roadmap and today marked some initial success after both sides clinched a major investment deal worth nearly $1.4 billion. Both sides believe this is a precursor to a real deal - a Free Trade Agreement (FTA), talks for which will begin later this year.
A lot of companies will now make waves in the UK market - the Global Gene Group is planning to invest $81 million, Wipro is charting a $22 million project. Sterlite Technology is set to invest $20 million.
The Serum Institute of India is planning to invest $332 million (₹2400 crore). They plan to invest this money in three specific sectors - a sales office, clinical trials and research, and manufacturing facilities.
Serum Institute may or may not make vaccines in the UK. its chief, Adar Poonawalla, had asked the Indian government for additional funds, saying that he needed them to expand capacity. So the central government announced $400 million (₹3,000) crore in grants, as quoted by the finance minister of India. But Adar Poonawalla himself says shortages in India will continue until July. The institute says expansion doesn't happen overnight.
The trade deal has a lot more. Boris Johnson believes it will create 6,500 jobs, and he is also hoping to double bilateral trade by 2030. Right now, it stands at $32 billion.
Producers of British fruit and medicines now have easier access to the Indian market. In return, Indian multinationals have an easy investment path. What Britain really wants is India to drop its barriers and tariffs. For India, immigration is the big issue - New Delhi wants the UK to relax its immigration rules especially for Indian students who wish to work in the UK. But Boris Johnson's Brexit campaign centred around tougher immigration laws.
This deal has strategic implications as well. It was announced ahead of a virtual summit between Prime Minister Modi and Boris Johnson. The British prime minister was supposed to make the trip to India but that's when the second wave intensified, so the summit was converted into a virtual one.
India is a big part of Britain's post-Brexit future as Boris Johnson wants a bigger role in the Indo-Pacific and he pegs India as the key partner in the region.
What were the big takeaways?
Both leaders agreed to elevate bilateral ties to a comprehensive strategic partnership. The key focus area was the Indo-pacific as India and UK have agreed to fight for a free and open Indo-pacific. Their militaries will also be holding joint drills and collaborating on research and development.
On trade, they agreed on an enhanced trade partnership expected to lead to a free trade deal in the coming years. There was a special focus on green businesses, and climate friendly projects.