Amid United Kingdom Prime Minister Boris Johnson's two-day visit to India, both nations are looking at a slew of deals to the tune of 1 billion pounds in new investments and exports, in sectors ranging from health to software engineering.
In an interview with CNBCTV-18, Bharat Joshi, Co-Chairman of Logistics Committee of CII and Vinod Giri, Director General of Confederation of All India Alcoholic Beverages, gave their views on where India and UK stand in their Foreign Trade Agreement (FTA) negotiations.
Johnson has said he hopes to complete a free trade deal with India by the end of this year. The country has been batting for a reduction in import duty for premium spirits, including scotch whisky.
Joshi said there are reasons of optimism on 2 or 3 of the challenging topics involving FTAs in India. He said the two recent FTAs -- the Australian and Emirati ones will be taken as great precedents in negotiations with the United Kingdom for its FTA with India.
Joshi said the Australian FTA did allow import of Australian wine. "The Emirati FTA actually does cover data and the digital economy as it is now called, so that will be heartening for many of us," he said, adding that regarding automobiles, they can try and find some silver linings in the FTA talks, which will surely be a win-win for both sides.
In the past, Boris Johnson has several times spoken about the need for India to reduce tarrifs on scotch whisky. Giri said the Indian industry is not against it or any reduction in duty. "What we look forward to is an FTA deal where both sides have something to gain and provides a level playing field. There should also be enough measures to prevent misuse of FTA concessions," he said.
Also, the UK's insistence that every whisky sold in UK should be 3 years mature is a big commercial challenge for India, he said. "In the India warmer climate we have an evaporation loss of 10 percent year-on-year. So that means if we mature for 3 years, then 30 percent of the whisky is lost. So that is something that we want them to seriously consider," he said.
Joshi said the United Kingdom is enormously important as a business destination for Indian companies, especially after Brexit. He said both nations have a shared heritage, and people-to-people contacts are second to none. Even the most popular vaccine to combat COVID-19 is essentially a joint Indo-British product, he said. "So i think there is plenty of evidence to support the cause that it is a very strong partnership and now it can takeoff," he said, adding that the potential that was capped could be uncapped. "While the FTA, not a prerequisite, but if it does go through, then I'm sure all bets are off. There is really no stopping where this partnership could reach," he said.
Joshi also said he thinks there are several areas where it is necessary for Indian businesses to get more market action to get tarrif barriers reduced. These include, healthcare, textiles, gems and jewellery, leather, chemicals, among others. "Almost anything that we export to the UK, we could be exporting a lot more. And a lot of what we are not exporting, we could commence exporting as well," he said.
Johnson's visit comes amid geopolitical tensions surrounding the Russia-Ukraine war and the criticism he is facing post the partygate case.
While he is in India, his government tried to put off a vote on a labour law -- whether the British Parliament's privelleges committee should investigate if the PM misled the Parliament over partygate. The vote is due later today.
In the next few days, the UK is also going to have by elections and elections to the local councils. "That could be an occasion when voters have their say on what they think of partygate. So really the domestic crisis for boris johnson does not go away and is on the top of the agenda," said Sanjay Suri, CNBCTV-18's Europe Editor.
He also said the investments are very important for the UK and so is the timing of their announcement. "Johnson is very keen to show that he has a very strong takeaway from the India visit. An india trade deal and more trade and business with India has been on top of the declared brexit agenda since the early days of the campaigning," Suri said.