Although trade between the United Kingdom and India is surely boosting the free trade agreement (ALE) between the two countries helping the results of the two countries, the greatest importance of this agreement is on three geo-economic and related strategic maneuvers.
First of all, it is that the successful completion of talks and how the negotiators have found a way to get out of a few roadblocks that had long upset it, will catalceia with the long -standing similar agreement that India had continued with the largest block in the European Union (EU).
Unlike the British talks that started about three years ago, India’s pursuit of an ALE with the EU served for almost two decades. In fact, the two parties had as much as that abandoned in 2013, which led to a nine -year lull, before the talks resumed in the summer of 2022.
The next round of talks in India-EU is scheduled for next week.
The British conclusion of the ALE even prompted the Minister of Finance Nirmala Sitharaman to look confident in Milan, Italy, where she expressed hope that the India FTA will be the next one. The Minister of Commerce, Piyush Goyal, even alluded to this when he ostensibly commented on the completion of the United Kingdom of AFT that the ALE only concerns goods and services, but also “basic interests while opening doors to the largest participation of India in chains of global value”.
Second, it is “the elephant in the room” for India and the EU – Trump America and the chaos that it sparked on the world trade scene with its price crises. The EU and India must both compensate for all that Trump is finally settling in, and what could be better than finding your own alternative partners sufficiently solid?
In the current state of things, the EU is the largest market export market in India, while Europe has visions of the massive domestic market in India enough compensation to compensate for any commercial googlies that Trump could be made.
“More importantly, the United Kingdom of the ALE signals the opening of India to the freeing free trade agreements, and at the moment of global uncertainty, it is the key,” said Rahul Ahluwalia, founder-director of Foundation for Economic Development, a reflection group on public policy based in Delhi.
In accordance with official EU figures, India is the largest EU trading partner, representing 12.2% of India trade, even more than the United States at 10.8% and China at 10.5%. Of course, it is a global commercial figure, because India exports more to the United States and imports far beyond a level of comfort in China.
A trade agreement, both the continental block and the Asian subcontinent Hope, could modify this dependence on superpowers (the United States for the EU and China for India) into a more equitable partnership of two fairly equal entities (economy and commercial size).
Third, and crucial for India, consists in putting its eggs in different baskets, or in other words, reducing dependence on some major business partners. Especially China with which India has long-standing border disputes, and the United States, which under Trump, have been extinguishing on prices and policies not only on business issues since it took over.
He also realizes that the days of the WTO and regulated trade on a global scale are almost finished, and it does not want to be caught off guard, in particular by considering two main pains – one, the fact that it is a net importer of expensive oil products, and the other, its excessive dependence on industrial raw materials on China.
This is also one of the reasons why India has been on an ALE channels in recent years. After concluding agreements with Australia, the United Arab Emirates and now the United Kingdom, the next ones are a plethora of negotiations at various negotiation stages. This goes from Oman and EFTA (Iceland, Norway, Liechtenstein and Switzerland) to Chile and Peru.
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