Headache of ‘ill-thought out’ EU barriers may spur end of tariffs on much-loved fruit

UK and India launch free trade agreement talks

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While India and the EU have yet to strike a trade deal, one between the south Asian nation and the UK could see a massive boost to trade for both countries, according to new analysis. David Campbell Bannerman, a former MEP, described the prospect of a free trade agreement with India as “a major post Brexit opportunity we should seize”.

According to EU data, the bloc is India’s second largest destination for goods, while India is the EU’s third largest trading partner.

Despite agreeing to resume trade talks in May last year, previous negotiations between 2007 and 2013 failed.

On January 13, the UK announced it had launched negotiations with India for a free trade agreement.

At the time, Boris Johnson said: “A trade deal with India’s booming economy offers huge benefits for British businesses, workers and consumers.

“As we take our historic partnership with India to the next level, the UK’s independent trade policy is creating jobs, increasing wages and driving innovation across the country.”

According to analysis by Facts4EU, the UK currently exports more goods than services to India – 54 percent to 46 percent respectively.

This, it said, suggests there is “huge potential” for the exports of UK services.

The Department for International Trade has previously suggested that as India’s middle class grows, the demand for services will do so to, a trend which is “likely to benefit UK businesses”.

India has been described, however, as “protectionist”, and current tariffs on services and luxury items has deterred greater trade between the two nations

Facts4EU commented: “Business services, especially legal, insurance, accounting and management consulting services could be a natural for the UK and the City of London, especially as India and the UK share the same common law legal basis.”

The UK’s average tariff on Indian goods is around 4.2 percent, but India’s is 14.6 percent.

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Facts4EU said that this gave “much opportunity to balance out tariffs or cut to zero per cent”.

In addition to this, there is a 150 percent tariff on Scotch whisky and luxury cars entering India. With the UK less of a threat to India’s car manufacturing base as Germany, tariffs on British luxury car brands could be cut to zero.

Facts4EU added: “In defence, with the common threat of China building a massive military, India and the UK could be natural partners in developing common warships, military aircraft, tanks and troop vehicles.”

India is likely to want to see the end to tariffs on Basmati rice and mangoes, “reducing costs for our favourite curry restaurants and supermarkets”.

The “ill-thought-through” EU ban on mangoes was lifted in 2015 after British intervention and improvements to plant health controls.

At the time, Sir James Bevan, then-British High Commissioner to India, said: “The British Government worked hard to have the ban lifted. […] We are pleased to have played an important role in bringing the ban to an end.”

Indian textiles could be another target for a tariff-busting free trade agreement.

Speaking to Facts4EU, Mr Bannerman, a Tory politician and later UKIP deputy leader who was born in Mumbai, said: “The benefits of a UK-India Free Trade Agreement – as long term historically linked partners, with close and meaningful language, legal and cultural links, and with similar-sized economies today – are potentially substantial and highly beneficial, perhaps even transformative.

“The ability of the UK to hitch its star to what will become the second largest economy in the world in future, and work together via [the Comprehensive and Progressive Agreement for Trans-Pacific Partnership] is a major post Brexit opportunity we should seize.”

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