Repercussions in the long run: Brexit might not benefit India-UK trade ties

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  • India has identified a list of barriers to trade that, do not relate to tariff but, cause an inconvenience for India-UK trade.
  • India is unlikely to get the concessions it wants because these barriers are imposed by the EU and the UK is considering a “common rule book” with EU which won’t work the same way for India.
  • Experts say that the post-Brexit trade policy will be as disadvantageous for the UK as it will be for India and might turn out to be a “real blow” to UK’s financial and related professional services sector.

The UK government’s latest blueprint for
Brexit might derail plans of a free trade pact with India as the UK might be unable to make the kind of trade concessions that India seeks. And it is so because post Brexit, UK is planning closer ties than “required” with the European Union (EU). UK Prime Minister, Theresa May, has also faced a lot of criticism over this decision recently.

Post this decision, May’s Brexit minister and foreign secretary resigned in opposition stating that these ties with the EU will make trade deals with other countries more difficult, which might also turn out to be the case for India-UK trade.

According to a confidential joint UK-India Trade Review released to ‘Greenpeace Unearthed’, India may not get any post-Brexit trade benefits.

India has identified a list of barriers that do not relate to tariff at all but, nevertheless, cause an inconvenience when it comes to trade. The country wants the UK to reconsider these issues in the new Brexit trade deal. These barriers include limits on fungicides in Basmati rice, enforced food hygiene standards for milk and dairy products, and the use of hormone-disrupting chemicals across a range of non-food products.

Any such change desired by India is unlikely to occur because these rules are imposed by the EU and the new Brexit plan is considering a “common rule book” for EU and UK applicable for goods.

The Trade Review also covered life sciences and information technology. It formed the crux of the new UK-India trade partnership that was announced during PM Modi’s visit to the UK in April for the Commonwealth Heads of Government Meeting (CHOGM).

The Britain’s exit from EU is scheduled for 29 March of next year, however, the two haven’t decided on how trade relations between them are expected to turn out.

Dominic Raab, who is the current Brexit secretary, stressed that UK will strike the right balance between freeing itself up to the market and protecting the existing arrangements with the EU. However, the prospects of changes in the trade policy that might be favourable to India seem bleak.

According to experts, the post-Brexit trade policy will be as disadvantageous for the UK as it will be for India. It is also expected to be a “real blow” to UK’s financial and related professional services sector and it will also make UK less able to create jobs, generate tax and support growth across the wider economy.