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Laying the Groundwork for an IndiaUK Trade Deal

India Global Business Staff

The Shadow Secretary of State for International Trade lays out the strengths and challenges that India and Uk must be aware of in order to build a stronger bilateral relationship. The UK and India share a unique history with trade relations going back many hundreds of years. Today, I believe it is a relationship that will have much greater strategic as well as economic significance as India responds to the regional challenge of the rise of China and resurgence of Russia. India has to chart her relationships with her northern neighbours all the while setting out and her own need to establish herself as an equal global superpower. Britain can be helpful in enabling India to do that, whilst in the United Kingdom we seek to chart our own new path in the wake of the referendum vote to withdraw from the European Union. The special relationship between our two countries extends to far more than just trade, however, it is trade that inherently binds us and that will ultimately define what our future relationship might look like. The eyes of the world are closely fixed on India and the place that the country will take on the world stage and her emerging dominance in next- generation technology industries. India has challenged the conventional world view on emerging market economies and has taken a strong lead in the implementation of green technologies including the International Solar Alliance and a commitment to the provision of clean affordable energy for all its people. India has positioned itself as a global voice on climate action. India and the UK's special relationship is augmented by our respective memberships of the Commonwealth and the long rich cultural history which has seen many British business customs and legal traditions adopted in India as well as many Indian customs and traditions incorporated here in the UK. It is this shared history and mutual Commonwealth membership that were used by many of those who campaigned for us to leave the European Union. Before the referendum vote they proclaimed a special message to the Indian diaspora that an end to free movement of people in the EU would be used to open up the UK to greater immigration from the Commonwealth. Now that Britain is leaving the EU, there must be a renewed focus on our trade relationship with India. Nostalgia and history alone do not constitute a sufficient basis for a modern trade relationship between our nations and both countries now need to take a hard look at the benefits and potential downsides of a bilateral free trade agreement. The UK needs to set out what opportunities it has identified alongside India to grow and nurture a collaborative future industry. We need to recognise that our historic trading relationships have been the result of successful relationship-building between our peoples and the capacity to move goods and to o er services across our borders. But substantial barriers still remain. It is no longer possible for the UK ministers to appeal to a shared history or common social and cultural institutions and think these can be a substitute for a clear economic o er in a trade deal that represents a win-win for both sides. . In a globalised world, the dynamic of future trading relationships will inevitably pivot around deeper strategic alliances and the movement of people that commerce and trade has always involved. e basis for securing preferential future trade terms with India begins in that recognition of essential equality. Indeed, it begins in recognising that India is now an emerging global superpower whose primary interests are regional in Southeast Asia and who needs a deal with the UK less than we need one with her. e UK has been a leader in global trade punching above its weight for three centuries. Our success has been based not only upon military might; it has sprung from world-leading universities and a strong science base; it has been nurtured by embedded legal institutions which guarantee swift and impartial redress in commercial contract disputes, and it has blossomed through a period of manufacturing innovation that gave the world the first industrial revolution. But our exports now are predominantly service-based and this changes the dynamic of trade, particularly with countries such as India. India wants access to our educational institutions and it has much to gain from our professional services, but it has a political imperative to protect its agricultural base and dare not choke o its emerging middle class by opening up its financial services and retail sectors in the way the UK would like. India is, understandably, keen to develop its own market economy and domestic skill sets rather than to rely on knowledge, goods and services imported from overseas. Modi's government wants to facilitate Indian citizens moving freely to provide services-particularly in the IT sector, building on Mode 4 of the WTO's General Agreement on Trade in Services. India is the third-largest destination in value terms for foreign direct investment from the UK. But the UK is also the third-largest destination for FDI from India. e two-way ow of investment and capital is intrinsic to our capacity to augment and progress our trade relationships but we have to be willing to recognise how much of this has been predicated on our capacity to attract and retain talent from India as well as the significant contribution that British Indian entrepreneurs and investors have made to developing our own market and in creating businesses that drive that trade between our two nations. So many British SMEs are owned or managed by people who came to the UK to seek a better life for themselves and their families-many of these will grow to become the international corporations of our future and we recognise the need to ensure that our trade policy nurtures and grows these businesses ensuring that they have maximum support to export and invest here and overseas. We need to let these business owners know that we value their contribution and welcome their growth. it is time for British politicians from all parties to face reality and to take o the rose-tinted glasses and start looking to Britain's future relationships and not our past. We must strategically plan not only our own place in the world but also what place our friends and allies will have and how we can work together to ensure that we share the skills, talent and successes to build commercial ties and trading agreements that can fulfil the aspirations of all our people. Barry Gardiner is the Shadow Secretary of State for International Trade.

The above is a synopsis of one of the chapters from 'Winning Partnership: India-UK Relations Beyond Brexit', edited by India Inc. Founder & CEO Manoj Ladwa.

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